AUO — Audit Report / Information 2021

Dec 28, 2021

Stock Code:2409

AU OPTRONICS CORP.

Parent Company Only Financial Statements

With Independent Auditors’ Report For the Years Ended December 31, 2021 and 2020

The independent auditors’ report and the accompanying parent company only financial statements are the English translation of the Chinese version prepared and used in the Republic of China. If there is any conflict between, or any difference in the interpretation of the English and Chinese language independent auditors’ report and the parent company only financial statements shall prevail.

Independent Auditors’ Report

To the Board of Directors of AU Optronics Corp.:

Opinion

We have audited the parent company only financial statements of AU Optronics Corp. (“the Company”), which comprise the balance sheets as of December 31, 2021 and 2020, the statements of comprehensive income, statements of changes in equity, and statements of cash flows for the years ended December 31, 2021 and 2020, and notes to the parent company only financial statements including a summary of significant accounting policies.

In our opinion, the accompanying parent company only financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2021 and 2020, and its financial performance and its cash flows for each of the years then ended, in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers.

Basis for Opinion

We conducted our audit in accordance with the Regulations Governing Auditing and Certification of Financial Statements by Certified Public Accountants and the auditing standards generally accepted in the Republic of China. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Parent Company Only Financial Statements section of our report. We are independent of the Company in accordance with the Certified Public Accountants Code of Professional Ethics in Republic of China (“the Code”), and we have fulfilled our other ethical responsibilities in accordance with the Code. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our opinion.

Key Audit Matters

Key audit matters are those matters that, in our professional judgment, were of most significance in our audit of the parent company only financial statements of the current period. These matters were addressed in the context of our audit of the parent company only financial statements as a whole, and in forming our opinion thereon, and we do not provide a separate opinion on these matters. We have determined the matters described below to be the key audit matters to be communicated in our report.

1. Impairment of long-term non-financial assets (including goodwill)

Refer to Note 4(16) “ Impairment – non-financial assets” , Note 5(1) and Note 5(2) “ Critical accounting judgments and key sources of estimation and assumption uncertainty” , Note 6(8) “ Property, plant and equipment”, Note 6(9) “Lease arrangements” and Note 6(11) “Intangible assets” to the parent company only financial statements.

Description of key audit matter:

The Company operates in an industry with high investment costs, has goodwill through the acquisition of subsidiaries, and may experience volatility in response to changes in the external market; hence, it is important to assess the impairment of its long-term non-financial assets (including goodwill). The impairment assessment includes identifying cash-generating units, determining a valuation model, determining significant assumptions, and computing recoverable amounts. With the complexity of the impairment assessment process and the involvement of significant management judgment regarding assumptions used, this is one of the key areas our audit focused on.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included understanding and testing the Company’s controls surrounding the impairment assessment and testing process; assessing whether there are impairment indications for the identified cash-generating units of the Company and its related assets; understanding and assessing the appropriateness of the valuation model used by the management in the impairment assessment and the significant assumptions used to determine related assets’ future cash flows projection, useful lives, and weighted-average cost of capital; retrospectively reviewing the accuracy of assumptions used in prior-period estimates and performing a sensitivity analysis of key assumptions and results; in addition to the above audit procedures, appointing specialists to evaluate the appropriateness of the weighted-average cost of capital used and related assumptions; performing an inquiry of the management and identifying any event after the balance sheet date if able to affect the results of the impairment assessment; and assessing the adequacy of the Company’ s disclosures of its policy on impairment of noncurrent non-financial assets and other related disclosures.

2. Revenue recognition

Refer to Note 4(19) “Revenue from contracts with customers” and Note 6(18) “Revenue from contracts with customers” to the parent company only financial statements.

Description of key audit matter:

Revenue is recognized when the control over a product has been transferred to the customer as specified in each individual contract with customers. The Company recognizes revenue depending on the various sales terms in each individual contract with customers to ensure the performance obligation has been satisfied by transferring control over a product to a customer. In addition, the Company operates in an industry in which revenue is considered to be complex in determining the timing of revenue recognition. Consequently, this is one of the key areas our audit focused on.

How the matter was addressed in our audit:

In relation to the key audit matter above, our principal audit procedures included understanding and testing the Company’s controls surrounding revenue recognition; assessing whether appropriate revenue recognition policies are applied through comparison with accounting standards and understanding the Company’s main revenue types, its related sales agreements, and sales terms; on a sample basis, inspecting contracts with customers or customers’ orders and assessing whether the accounting treatment of the related contracts (including sales terms) is applied appropriately; performing a test of details of sales revenue and understanding the rationale for any identified significant sales fluctuations and any significant reversals of revenue through sales discounts and sales returns which incurred within a certain period before or after the balance sheet date; and assessing the adequacy of the Company’ s disclosures of its revenue recognition policy and other related disclosures.

Responsibilities of Management and Those Charged with Governance for the Parent Company Only Financial Statements

Management is responsible for the preparation and fair presentation of the parent company only financial statements in accordance with Regulations Governing the Preparation of Financial Reports by Securities Issuers and for such internal control as management determines is necessary to enable the preparation of parent company only financial statements that are free from material misstatement, whether due to fraud or error.

In preparing the parent company only financial statements, management is responsible for assessing the Company’s ability to continue as a going concern, disclosing, as applicable, matters related to going concern and using the going concern basis of accounting unless management either intends to liquidate the Company or to cease operations, or has no realistic alternative but to do so.

Those charged with governance (inclusive of the Audit Committee) are responsible for overseeing the Company’s financial reporting process.

Auditors’ Responsibilities for the Audit of the Parent Company Only Financial Statements

Our objectives are to obtain reasonable assurance about whether the parent company only financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinion. Reasonable assurance is a high level of assurance, but is not a guarantee that an audit conducted in accordance with the auditing standards generally accepted in the Republic of China will always detect a material misstatement when it exists. Misstatements can arise from fraud or error and are considered material if, individually or in the aggregate, they could reasonably be expected to influence the economic decisions of users taken on the basis of these parent company only financial statements.

As part of an audit in accordance with auditing standards generally accepted in the Republic of China, we exercised professional judgment and maintained professional skepticism throughout the audit. We also:

1. Identified and assessed the risks of material misstatement of the parent company only financial statements, whether due to fraud or error, design and perform audit procedures responsive to those risks, and obtain audit evidence that is sufficient and appropriate to provide a basis for our opinion. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control.

2. Obtained an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Company’s internal control.

3. Evaluated the appropriateness of accounting policies used and the reasonableness of accounting estimates and related disclosures made by management.

4. Concluded on the appropriateness of management’s use of the going concern basis of accounting and, based on the audit evidence obtained, whether a material uncertainty exists related to events or conditions that may cast significant doubt on the Company’s ability to continue as a going concern. If we conclude that a material uncertainty exists, we are required to draw attention in our auditors’ report to the related disclosures in the parent company only financial statements or, if such disclosures are inadequate, to modify our opinion. Our conclusions are based on the audit evidence obtained up to the date of our auditors’ report. However, future events or conditions may cause the Company to cease to continue as a going concern.

5. Evaluated the overall presentation, structure and content of the parent company only financial statements, including the disclosures, and whether the parent company only financial statements represent the underlying transactions and events in a manner that achieves fair presentation.

6. Obtained sufficient and appropriate audit evidence regarding the financial information of the entities or business activities within the Company to express an opinion on the parent company only financial statements. We are responsible for the direction, supervision and performance of the group audit. We remain solely responsible for our audit opinion.

We communicated with those charged with governance regarding, among other matters, the planned scope and timing of the audit and significant audit findings, including any significant deficiencies in internal control that we identified during our audit.

We also provided those charged with governance with a statement that we have complied with relevant ethical requirements regarding independence, and communicated with them all relationships and other matters that may reasonably be thought to bear on our independence, and where applicable, related safeguards.

From the matters communicated with those charged with governance, we determined those matters that were of most significance in the audit of the parent company only financial statements of the current period and are therefore the key audit matters. We describe these matters in our auditors’ report unless law or regulation precludes public disclosure about the matter or when, in extremely rare circumstances, we determine that a matter should not be communicated in our report because the adverse consequences of doing so would reasonably be expected to outweigh the public interest benefits of such communication.

The engagement partners on the audit resulting in this independent auditors’ report are Yu, Chi Lung and Yu, Wan Yuan.

KPMG

Hsinchu, Taiwan (Republic of China) February 10, 2022

Notes to Readers

The accompanying parent company only financial statements are intended only to present the financial position, financial performance, and cash flows in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers. The standards, procedures and practices to audit such parent company only financial statements are those generally accepted and applied in the Republic of China.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) AU OPTRONICS CORP.

Balance Sheets

December 31, 2021 and 2020

(Expressed in thousands of New Taiwan dollars)

Assets Current assets: 1100 Cash and cash equivalents (Note 6(1)) 1110 Financial assets at fair value through profit or loss－current (Note 6(2)) 1136 Financial assets at amortized cost－current (Note 6(4)) 1170 Accounts receivable, net (Note 6(5)) 1180 Accounts receivable from related parties, net (Notes 6(5)&7) 1210 Other receivables from related parties (Note 7) 1220 Current tax assets 130X Inventories (Note 6(6)) 1476 Other current financial assets (Notes 6(8)&(18)) 1479 Other current assets (Note 6(12)) Noncurrent assets: 1517 Financial assets at fair value through other comprehensive income－ noncurrent (Note 6(3)) 1550 Investments in equity-accounted investees (Notes 6(7)&7) 1600 Property, plant and equipment (Notes 6(8),7&8) 1755 Right-of-use assets (Note 6(9)) 1760 Investment property (Note 6(10)) 1780 Intangible assets (Note 6(11)) 1840 Deferred tax assets (Note 6(22)) 1900 Other noncurrent assets (Notes 6(12),(15)&8) Total Assets	December 31, 2021 Amount % $ 35,620,938 9 130,434 - 10,000,000 3 48,983,659 13 7,475,344 2 2,071,262 1 28,430 - 21,691,552 6 1,771,363 - 1,881,797 - 129,654,779 34 65,989 - 110,187,644 29 117,565,260 30 8,325,689 2 465,868 - 10,688,986 3 5,528,979 1 3,120,341 1 255,948,756 66 $ 385,603,535 100	December 31, 2020 Amount % 54,969,325 15 21,361 - - - 41,585,707 11 2,258,704 1 1,021,418 - 43,395 - 18,984,776 5 221,461 - 1,938,708 1 121,044,855 33 - - 85,868,028 24 129,554,205 36 8,790,075 2 465,868 - 11,806,450 3 5,250,159 2 1,220,936 - 242,955,721 67 364,000,576 100 Liabilities and Equity Current liabilities: 2120 Financial liabilities at fair value through profit or loss－current (Note 6(2)) 2170 Accounts payable 2180 Accounts payable to related parties (Note 7) 2213 Equipment and construction payable (Note 7) 2220 Other payables to related parties (Note 7) 2230 Current tax liabilities 2250 Provisions－current (Note 6(14)) 2280 Lease liabilities－current (Note 6(9)) 2399 Other current liabilities (Notes 6(18)&(19)) 2322 Current installments of long-term borrowings (Notes 6(13)&8) Noncurrent liabilities: 2527 Contract liabilities－noncurrent (Note 6(18)) 2540 Long-term borrowings, excluding current installments (Notes 6(13)&8) 2550 Provisions－noncurrent (Note 6(14)) 2570 Deferred tax liabilities (Note 6(22)) 2580 Lease liabilities－noncurrent (Note 6(9)) 2600 Other noncurrent liabilities Total liabilities Equity(Note 6(16)): 3100 Common stock 3200 Capital surplus 3300 Retained earnings 3400 Other components of equity 3500 Treasury shares Total equity Total Liabilities and Equity		December 31, 2021	December 31, 2021		December 31, 2020 Amount % 135,420 - 24,457,428 7 29,923,778 8 2,201,328 1 645,371 - - - 662,250 - 390,595 - 14,523,627 4 11,184,508 3 84,124,305 23 - - 84,455,010 23 779,500 - 2,334,898 1 8,542,357 3 959,815 - 97,071,580 27 181,195,885 50 96,242,451 26 60,587,684 17 30,258,282 8 (3,270,303) (1) (1,013,423) - 182,804,691 50 364,000,576 100
				Amount	%
				39,294 25,563,063 33,402,582 2,037,379 285,903 62,580 777,282 378,273 28,097,647 12,267,653
				102,911,656
				8,739,846 28,379,592 679,907 3,331,803 8,153,713 1,619,978
				50,904,839
				153,816,495

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) AU OPTRONICS CORP.

Statements of Comprehensive Income

For the years ended December 31, 2021 and 2020

(Expressed in thousands of New Taiwan dollars, except for Earnings per share)

4110 Revenue 4190 Less: sales return and discount Net revenue(Notes 6(18)&7) 5000 Cost of sales(Notes 6(6),(9),(15),(19),(20)&7) Gross profit Operating expenses(Notes 6(9),(15),(17),(19),(20)&7): 6100 Selling and distribution expenses 6200 General and administrative expenses 6300 Research and development expenses Total operating expenses Profit from operations Non-operating income and expenses: 7100 Interest income (Note 6(21)) 7010 Other income (Notes 6(3),(21)&7) 7020 Other gains and losses (Notes 6(7),(8),(9),(21)&7) 7050 Finance costs (Notes 6(8),(9)&(21)) 7060 Share of profit of equity-accounted investees (Note 6(7)) Total non-operating income and expenses 7900 Profit before income tax 7950 Less: income tax expense (benefit)(Note 6(22)) 8200 Profit for the year 8300 Other comprehensive income(Notes 6(3),(7),(15),(16)&(22)): 8310 Items that will never be reclassified to profit or loss 8311 Remeasurement of defined benefit obligations 8316 Unrealized gain on equity investments at fair value through other comprehensive income (loss) 8330 Equity-accounted investees – share of other comprehensive income 8349 Related tax 8360 Items that are or may be reclassified subsequently to profit or loss 8361 Foreign operations – foreign currency translation differences 8380 Equity-accounted investees – share of other comprehensive income 8399 Related tax 8300 Other comprehensive income (loss), net of tax 8500 Total comprehensive income for the year Earnings per share(NT$, Note 6(23)) 9750 Basic earnings per share 9850 Diluted earnings per share	2021 Amount % $333,453,625 101 2,223,070 1 331,230,555 100 260,307,149 79 70,923,406 21 3,540,549 1 6,357,095 2 10,093,084 3 19,990,728 6 50,932,678 15 159,594 - 565,952 - (206,835) - (1,447,159) - 12,431,269 4 11,502,821 4 62,435,499 19 1,104,871 - 61,330,628 19 21,693 - (25,518) - 236,236 - (4,664) - 227,747 - (1,765,440) (1) 523,293 - 328,538 - (913,609) (1) (685,862) (1) $ 60,644,766 18 $ 6.44 $ 6.26	2020 Amount % 256,851,362 100 762,017 - 256,089,345 100 240,070,378 94 16,018,967 6 2,702,022 1 4,139,655 2 8,054,215 3 14,895,892 6 1,123,075 - 158,965 - 895,740 - (182,115) - (1,771,273) - 2,272,193 1 1,373,510 1 2,496,585 1 (879,739) - 3,376,324 1 140,218 - 2,564,513 1 113,167 - (28,043) - 2,789,855 1 (3,049,722) (1) 2,961,666 1 11,518 - (76,538) - 2,713,317 1 6,089,641 2 0.36 0.35

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) AU OPTRONICS CORP.

Statements of Changes in Equity

For the years ended December 31, 2021 and 2020

(Expressed in thousands of New Taiwan dollars)

Balance at January 1, 2020 Appropriation of earnings: Special reserve Profit for the year Other comprehensive income (loss), net of tax Total comprehensive income (loss) for the year Changes in deemed contributions from shareholders Adjustments for changes in investees’ equity Disposal of equity investments measured at fair value through other comprehensive income Balance at December 31, 2020 Appropriation of earnings: Legal reserve Special reserve Cash dividends distributed to shareholders Profit for the year Other comprehensive income (loss), net of tax Total comprehensive income (loss) for the year Changes in deemed contributions from shareholders Adjustments for changes in investees’ equity Share-based payments Disposal of equity investments measured at fair value through other comprehensive income Balance at December 31, 2021	Capital Stock Common Stock $ 96,242,451 - - - - - - - 96,242,451 - - - - - - - - - - $ 96,242,451	Capital Surplus 60,544,474 - - - - 1,073 42,137 - 60,587,684 - - - - - - 449 (1,356,246) 825,114 - 60,057,001		Retained Earnings	Retained Earnings	Subtotal 22,903,722 - 3,376,324 113,073 3,489,397 - - 3,865,163 30,258,282 - - (2,850,967) 61,330,628 8,223 61,338,851 - (8,101,518) - 25,350 80,669,998	Other	Components of Equity Unrealized Gains (Losses) on Financial Assets at Fair Value through Other Comprehensive Income Subtotal 1,124,598 (2,005,384) - - - - 2,676,782 2,600,244 2,676,782 2,600,244 - - - - (3,865,163) (3,865,163) (63,783) (3,270,303) - - - - - - - - 219,524 (694,085) 219,524 (694,085) - - - (753,444) - - (25,350) (25,350) 130,391 (4,743,182)	Treasury Shares (1,013,423) - - - - - - - (1,013,423) - - - - - - - - 574,195 - (439,228)	Total Equity 176,671,840 - 3,376,324 2,713,317 6,089,641 1,073 42,137 - 182,804,691 - - (2,850,967) 61,330,628 (685,862) 60,644,766 449 (10,211,208) 1,399,309 - 231,787,040
							Cumulative Translation Differences (3,129,982) - - (76,538) (76,538) - - - (3,206,520) - - - - (913,609) (913,609) - (753,444) - - (4,873,573)	Unrealized Gains (Losses) on Financial Assets at Fair Value through Other Comprehensive Income 1,124,598 - - 2,676,782 2,676,782 - - (3,865,163) (63,783) - - - - 219,524 219,524 - - - (25,350) 130,391
			Legal Reserve 7,691,688 - - - - - - - 7,691,688 735,456 - - - - - - - - - 8,427,144	Special Reserve 847,770 1,157,614 - - - - - - 2,005,384 - 1,264,919 - - - - - - - - 3,270,303	Unappropriated Earnings 14,364,264 (1,157,614) 3,376,324 113,073 3,489,397 - - 3,865,163 20,561,210 (735,456) (1,264,919) (2,850,967) 61,330,628 8,223 61,338,851 - (8,101,518) - 25,350 68,972,551

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) AU OPTRONICS CORP.

Statements of Cash Flows

For the years ended December 31, 2021 and 2020

(Expressed in thousands of New Taiwan dollars)

2021 Cash flows from operating activities: Profit before income tax $ 62,435,499 Adjustments for: - depreciation 22,394,148 - amortization 170,775 - losses (gains) on financial instruments at fair value through profit or loss (205,199) - interest expense 1,371,931 - interest income (159,594) - dividend income (2,598) - compensation costs of share-based payments 793,463 - share of profit of equity-accounted investees (12,431,269) - gains on disposals of property, plant and equipment, net (782,257) - gains on disposals of investments, net (496,461) - impairment losses on assets 1,017,725 - unrealized foreign currency exchange losses (gains) (7,139) - others 75,227 Changes in operating assets and liabilities: - accounts receivable (11,734,364) - receivables from related parties (399,806) - inventories (2,973,563) - net defined benefit assets (12,299) - other operating assets (2,308,415) - contract liabilities 11,503,416 - accounts payable 1,041,259 - payables to related parties 3,119,336 - provisions 72,305 - other operating liabilities 11,802,579 Cash generated from operations 84,284,699 Interest received 159,574 Dividends received 813,819 Interest paid (1,416,424) Income taxes refunded (paid) 14,958 Net cash provided by operating activities 83,856,626

2020 2,496,585 23,787,296 245,311 125,758 1,699,576 (158,965) (251,423) - (2,272,193) (21,322) - 36,788 119,736 39,307 (14,422,629) (329,567) (1,728,515) (549,716) 1,265,569 187,100 (94,420) 4,838,219 (21,862) 468,077 15,458,710 158,679 371,371 (1,702,459) (15,087) 14,271,214

(Continued)

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) AU OPTRONICS CORP.

Statements of Cash Flows (Continued)

For the years ended December 31, 2021 and 2020

(Expressed in thousands of New Taiwan dollars)

Cash flows from investing activities: Acquisitions of financial assets at amortized cost Disposals of financial assets at amortized cost Acquisitions of financial assets at fair value through other comprehensive income Acquisitions of equity-accounted investees Proceeds from return of capital deduction Acquisitions of property, plant and equipment Disposals of property, plant and equipment Decrease (increase) in refundable deposits Decrease (increase) in other receivables from related parties Net cash outflow arising from spin-off Net cash used in investing activities Cash flows from financing activities: Proceeds from long-term borrowings Repayments of long-term borrowings Payment of lease liabilities Guarantee deposits received (refunded) Cash dividends Treasury shares sold to employees Others Net cash provided by (used in) financing activities Effect of exchange rate change on cash and cash equivalents Net increase (decrease) in cash and cash equivalents Cash and cash equivalents at January 1 Cash and cash equivalents at December 31

See accompanying notes to parent company only financial statements.

(English Translation of Parent Company Only Financial Statements Originally Issued in Chinese) AU OPTRONICS CORP.

Notes to the Parent Company Only Financial Statements

For the years ended December 31, 2021 and 2020

(Expressed in thousands of New Taiwan dollars, unless otherwise indicated)

1. Organization

AU Optronics Corp. (“ AUO” or “ the Company”) was founded on August 12, 1996 and is located in Hsinchu Science Park, the Republic of China (“ ROC” ). AUO’ s main activities are the research, development, production and sale of thin film transistor liquid crystal displays (“TFT-LCDs”) and other flat panel displays used in a wide variety of applications. AUO also engages in the production and sale of solar modules and systems. AUO’ s common shares have been publicly listed on the Taiwan Stock Exchange since September 2000, and its American Depositary Shares (“ADSs”) have been listed on the New York Stock Exchange (“NYSE”) since May 2002. On and from October 1, 2019, AUO’s ADSs has delisted from the NYSE and begun trading on the over-the-counter (“OTC”) market. Further on January 27, 2021, AUO’s ADSs and underlying ordinary shares was officially cancelled from the registration of the United States Securities and Exchange Commission and its reporting obligations under the U.S. Securities Exchange Act was terminated.

On September 1, 2001, October 1, 2006 and October 1, 2016, Unipac Optoelectronics Corp. (“Unipac”), Quanta Display Inc. (“ QDI” ) and Taiwan CFI Co., Ltd. (“ CFI” ) were merged with and into AUO, respectively. AUO is the surviving Company, whereas Unipac, QDI and CFI were dissolved.

In order to advance AUO’s value transformation strategy, to accelerate the extension of the value chain and enhance the overall operating performance, upon the resolution of the shareholders’ meeting held on June 17, 2020, AUO demerged and transferred the business of the General Display and the Public Information Display, including assets, liabilities and the operations, to its wholly-owned subsidiary, AUO Display Plus Corporation (“ADP”). ADP issued new shares to AUO as the consideration. The effective date of the demerger was set on January 1, 2021. The Company split the net operating assets amounted to $368,555 thousand in exchange for 36,856 thousand shares, with par value of NT$10 per share,of common shares of ADP. The carrying amounts of those assets and liabilities split off were as follows:

Assets:
Cash and cash equivalents	$	1,316,465
Accounts receivable, net		4,325,057
Accounts receivable from related parties, net		273,706
Inventories		266,788
Other current assets		265
Property, plant and equipment		11,382
Deferred tax assets		23,763
Liabilities:
Accounts payable to related parties		(5,630,385)
Provisions－current		(42,279)
Other current liabilities		(139,775)
Deferred tax liabilities		(24,088)
Provisions－noncurrent		(12,344)
	$	368,555

(Continued)

2

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

2. The Authorization of Financial Statements

These parent company only financial statements were approved and authorized for issue by the Board of Directors of AUO on February 10, 2022.

3. Application of New and Revised Standards, Amendments and Interpretations:

• (1) Impact of adoption of new, revised or amended standards and interpretations endorsed by the Financial Supervisory Commission, ROC (“FSC”)

The Company has adopted the amendments to the International Financial Reporting Standards, International Accounting Standards, IFRIC Interpretations, and SIC Interpretations (collectively, “IFRSs”) with effective date from January 1, 2021. The adoption does not have a material impact on the Company’s parent company only financial statements.

• (2) Impact of the IFRSs that have been endorsed by the FSC but not yet in effect

The Company assessed that the adoption of the following new amendments, effective for annual period beginning on January 1, 2022, would not have a material impact on its parent company only financial statements.

• ●Annual Improvements to IFRSs 2018–2020 Cycle

• ●Amendments to IFRS 3, Reference to the Conceptual Framework

• －

• ●Amendments to IAS 16, Property, Plant and Equipment Proceeds before Intended Use

• －

• ●Amendments to IAS 37, Onerous Contracts Cost of Fulfilling a Contract

• (3) The IFRSs issued by International Accounting Standards Board (“IASB”) but not yet endorsed by the FSC

Standards and interpretations issued by the IASB but not yet endorsed by the FSC are listed below:

• ●Amendments to IFRS 10 and IAS 28, Sale or Contribution of Assets Between an Investor and its Associate or Joint Venture

• ●IFRS 17, Insurance Contracts and amendments to IFRS 17

• ●Amendments to IAS 1, Classification of Liabilities as Current or Noncurrent

• ●Amendments to IAS 1, Disclosure of Accounting Policies

• ●Amendments to IAS 8, Definition of Accounting Estimates

• ●Amendments to IAS 12, Deferred Tax related to Assets and Liabilities arising from a Single Transaction

As of the date that the accompanying parent company only financial statements were issued, the Company continues in assessing the impact on its financial position and results of operations as a result of the application of abovementioned standards and interpretations except for IFRS 17, Insurance Contracts and the amendments to IFRS 17 that are not relevant to the Company. The related impact will be disclosed when the assessment is complete.

(Continued)

3

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

4. Summary of Significant Accounting Policies

The significant accounting policies applied in the preparation of these parent company only financial statements are set out as below. The significant accounting policies have been applied consistently to all periods presented in these parent company only financial statements.

(1) Statement of compliance

The parent company only financial statements have been prepared in accordance with the Regulations Governing the Preparation of Financial Reports by Securities Issuers (hereinafter referred to as “the Regulations”).

• (2) Basis of preparation

• a. Basis of measurement

The parent company only financial statements have been prepared on the historical cost basis except for the following material items in the balance sheets:

• (i) Financial instruments at fair value through profit or loss (including derivative financial instruments) (Note 6(2));

• (ii) Financial assets at fair value through other comprehensive income (Note 6(3));

• (iii) Defined benefit asset (liability) is recognized as the fair value of the plan assets less the present value of the defined benefit obligation (Note 6(15)).

• b.

• Functional and presentation currency

The functional currency of the Company is determined based on the primary economic environment in which the entity operates. The parent company only financial statements are presented in New Taiwan Dollar (“NTD”), which is also the Company’s functional currency. All financial information presented in NTD has been rounded to the nearest thousand, unless otherwise noted.

• (3) Foreign currency transactions and operations

• a. Transactions in foreign currencies are translated to the functional currencies of the Company at exchange rates at the dates of the transactions. Monetary assets and liabilities denominated in foreign currencies at the reporting date are retranslated to the functional currency at the exchange rate at that date and the resulting exchange differences are included in profit or loss for the year. Non-monetary assets and liabilities denominated in foreign currencies that are measured at fair value are retranslated to the functional currency at the exchange rate at the date when the fair value was determined. The resulting exchange differences are included in profit or loss for the year except for those arising from the retranslation of non-monetary items in respect of which gains and losses are recognized directly in other comprehensive income, in which case, the exchange differences are also recognized directly in other comprehensive income. Non-monetary items in foreign currencies that are measured at historical cost are translated using the exchange rate at the date of the transaction.

(Continued)

4

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

Exchange differences arising from the effective portion of changes in the fair value of derivatives that are designated and qualified as cash flow hedges are recognized in other comprehensive income.

• b. For the purpose of presenting parent company only financial statements, the assets and liabilities of the Company’s foreign operations are translated into NTD using the exchange rates at each reporting date. Income and expenses of foreign operations are translated at the average exchange rates for the period unless the exchange rates fluctuate significantly during the period; in that case, the exchange rates at the dates of the transactions are used. Foreign currency differences are recognized in other comprehensive income and accumulated in equity.

• (4) Classification of current and non-current assets and liabilities

An asset is classified as current when:

• a. The asset expected to realize, or intends to sell or consume, in its normal operating cycle;

• b. The asset primarily held for the purpose of trading;

• c. The asset expected to realize within twelve months after the reporting date; or

• d. Cash and cash equivalent excluding the asset restricted to be exchanged or used to settle a liability for at least twelve months after the reporting date.

All other assets are classified as non-current.

A liability is classified as current when:

• a. The liability expected to settle in its normal operating cycle;

• b. The liability primarily held for the purpose of trading;

• c. The liability is due to be settled within twelve months after the reporting date; or

• d. The Company does not have an unconditional right to defer settlement of the liability for at least twelve months after the reporting date. Terms of a liability that could, at the option of the counterparty, result in its settlement by the issue of equity instruments, do not affect its classification.

All other liabilities are classified as non-current.

• (5) Cash and cash equivalents

Cash comprises cash balances and demand deposits. Cash equivalents comprise short-term highly liquid investments that are readily convertible into known amount of cash and are subject to an insignificant risk of changes in their fair value. Time deposits with short-term maturity but not for investments and other purposes and are qualified with the aforementioned criteria are classified as cash equivalent.

(Continued)

5

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

(6) Financial instruments

• a. Financial assets

• (i) Classification of financial assets

The Company classifies financial assets into the following categories: financial assets at amortized cost, financial assets at fair value through other comprehensive income and financial assets at fair value through profit or loss. When, and only when, the Company changes its business model for managing financial assets it shall reclassify all affected financial assets.

• (a) Financial assets at amortized cost

A financial asset is measured at amortized cost if it meets both of the following conditions and is not designated as measured at fair value through profit or loss:

• i. it is held within a business model whose objective is to hold financial assets to collect contractual cash flows; and

• ii. its contractual terms give rise on specified dates to cash flows that are solely payments of principal and interest on the principal amount outstanding.

Such financial assets are initially recognized at fair value, plus any directly attributable transaction costs. Subsequently, these assets are measured at amortized cost using the effective interest method, less any impairment losses. Interest income, foreign exchange gains and losses, and recognition (reversal) of impairment losses, are recognized in profit or loss.

• (b) Financial assets at fair value through other comprehensive income

On initial recognition, the Company is able to make an irrevocable election to present subsequent changes in the fair value of investments in equity instruments that is not held for trading in other comprehensive income. This election is made on an instrument-by-instrument basis.

Such financial assets are initially recognized at fair value, plus any directly attributable transaction costs. Subsequent to initial recognition, they are measured at fair value and changes therein are recognized in other comprehensive income and － accumulated in equity unrealized gains (losses) on financial assets at fair value through other comprehensive income, except for dividends deriving from equity investments which are recognized in profit or loss unless the dividend clearly represents a recovery of part of the cost of the investment. When an investment is derecognized, the cumulative gain or loss in equity will not be reclassified to profit or loss, instead, is reclassified to retained earnings.

Dividends on investments in equity instruments are recognized on the date that the Company’s right to receive the dividends is established.

(Continued)

6

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

• (c) Financial assets at fair value through profit or loss

All financial assets not classified as at amortized cost or at fair value through other comprehensive income as described above are measured at fair value through profit or loss. This includes all derivative financial assets.

Such financial assets are initially recognized at fair value, and attributable transaction costs are recognized in profit or loss as incurred. Subsequent to initial recognition, they are measured at fair value and changes therein are recognized in profit or loss.

(ii) Impairment of financial assets

The Company recognizes loss allowances for expected credit losses on financial assets at amortized cost, including cash and cash equivalents, receivables, refundable deposits and other financial assets, etc., and contract assets. Loss allowances for financial assets are deducted from the gross carrying amount of the assets. The recognition or reversal of the loss allowance is recognized in profit or loss.

The expected credit loss is the weighted average of credit losses with the respective risks of a default occurring on the financial instrument as the weights.

The Company measures the loss allowance for a financial instrument at an amount equal to lifetime expected credit losses, except for the financial instrument that is determined to have low credit risk at the reporting date and the credit risk thereof has not increased significantly since initial recognition, which is measured at an amount equal to the 12month expected credit losses. For trade receivables and contract assets, the Company measures their loss allowances at an amount equal to lifetime expected credit losses.

When determining whether the credit risk of a financial asset has increased significantly since initial recognition, the Company considers reasonable and supportable information that is relevant. This includes both qualitative and quantitative information and analysis, based on the Company’s historical experience and credit assessment as well as forwardlooking information.

In the circumstance that a financial asset is past due or the borrower is unlikely to pay its credit obligations to the Company in full, the Company considers the credit risk on that financial asset has significantly increased, or further, to be in default.

At each reporting date, the Company assesses whether financial assets at amortized cost are credit-impaired. A financial asset is “credit-impaired” when one or more events that have a detrimental impact on the estimated future cash flows of the financial asset have occurred.

• (iii) De-recognition of financial assets

The Company derecognizes financial assets when the contractual rights to the cash flows from the asset expire, or when the Company transfers substantially all the risks and rewards of ownership of the financial assets to another entity.

(Continued)

7

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

b. Financial liabilities

• (i) Classification of financial liabilities

The Company classifies financial liabilities into the following categories: financial liabilities at fair value through profit or loss and other financial liabilities.

• (a) Financial liabilities at fair value through profit or loss

The Company designates financial liabilities as held for trading for the purpose of hedging exposure to foreign exchange risk arising from operating and financing activities. When a financial liability is not effective as a hedge, the Company accounts for it as a financial liability at fair value through profit or loss.

The Company designates financial liabilities, other than the one mentioned above, as at fair value through profit or loss at initial recognition. Attributable transaction costs are recognized in profit or loss as incurred. Financial liabilities in this category are subsequently measured at fair value and changes therein, which takes into account any interest expense, are recognized in profit or loss.

(b) Other financial liabilities

Financial liabilities not classified as held for trading, or not designated as at fair value through profit or loss (including loans and borrowings, trade and other payables), are measured at fair value, plus any directly attributable transaction cost at the time of initial recognition. Subsequent to initial recognition, they are measured at amortized cost calculated using the effective interest method, except for insignificant recognition of interest expense from short-term borrowings and payables. Interest expense not capitalized as an asset cost is recognized in profit or loss.

• (ii) De-recognition of financial liabilities

The Company derecognizes financial liabilities when the contractual obligation has been discharged, cancelled or expired. The difference between the carrying amount and the consideration paid or payable, including any non-cash assets transferred or liabilities assumed is recognized in profit or loss.

• c.

• Offsetting of financial assets and liabilities

The Company presents financial assets and liabilities on a net basis in the balance sheet when the Company has the legally enforceable rights to offset, and intends to settle such financial assets and liabilities on a net basis or to realize the assets and settle the liabilities simultaneously.

(Continued)

8

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

(7) Inventories

The cost of inventories includes all necessary expenditures and charges for bringing the inventory to a stable, useable and marketable condition and location. The production overhead is allocated to finished goods and work in progress based on the normal capacity of the production facilities. Subsequently, inventories are measured at the lower of cost and net realizable value. Cost is determined using the weighted-average method. Net realizable value is calculated based on the estimated selling price less all estimated costs of completion and the estimated costs necessary to make the sale.

(8) Investments in associates and joint ventures

Associates are those entities in which the Company and its subsidiaries have the power to exercise significant influence, but not control or joint control, over their financial and operating policies.

Joint venture is a joint arrangement whereby the Company and other parties agreed to share the control of the arrangement, and have rights to the net assets of the arrangement. Unanimous consent from the parties sharing control is required when making decisions for the relevant activities of the arrangement.

Investments in associates or joint ventures are accounted for using the equity method and are recognized initially at cost. The parent company only financial statements include the Company’s share of the profit or loss and other comprehensive income of associates or joint ventures, after adjustments are made to align their accounting policies with those of the Company. When an associate or a joint venture incurs changes in its equity not derived from profit or loss and other comprehensive income, the Company recognizes all the equity changes in proportion to its ownership interest in the associate or joint venture as capital surplus provided that the ownership interest in the associate or joint venture remains unchanged.

The difference between acquisition cost and fair value of associates’ or joint ventures’ identifiable assets and liabilities as of the acquisition date is accounted for as goodwill. Goodwill is included in the original investment cost of acquired associates or joint ventures and is not amortized. If the fair value of identified assets and liabilities is in excess of acquisition cost, the remaining excess over acquisition cost is recognized as a gain in profit or loss.

The Company discontinues the use of the equity method from the date when its investment ceases to be an associate or a joint venture, and then measures the retained interests at fair value at that date. The difference between the carrying amount of the investment at the date the equity method was discontinued and the fair value of the retained interests along with any proceeds from disposing of a part interest in the associate or joint venture is recognized in profit or loss. Moreover, the Company accounts for all amounts previously recognized in other comprehensive income in relation to that investment on the same basis as would be required if the investee had directly disposed of the related assets or liabilities.

(Continued)

9

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

When the Company subscribes for additional shares in an associate or a joint venture at a percentage different from its existing ownership percentage, the resulting carrying amount of the investment differs from the amount of the Company’s proportionate interest in the net assets of the associate or joint venture. The Company records such a difference as an adjustment to investments with the corresponding amount charged or credited to capital surplus. If the capital surplus arising from investment accounted for under the equity method in associates or joint ventures is insufficient to offset with the said corresponding amount, the differences will be charged or credited to retained earnings.

If the Company’s ownership interest in an associate or a joint venture is reduced due to disposal of or disproportionate subscription to the shares, but the Company continues to apply the equity method, the Company shall reclassify to profit or loss the proportion of the gain or loss that had previously been recognized in other comprehensive income relating to that reduction in ownership interest on the same basis as would be required if the investee had directly disposed of the related assets or liabilities.

At the end of each reporting period, if there is any indication of impairment, the entire carrying amount of the investment including goodwill is tested for impairment as a single asset, by comparing its recoverable amount with its carrying amount. An impairment loss recognized forms part of the carrying amount of the investment in associates or joint ventures. Accordingly, any reversal of that impairment loss is recognized to the extent that the recoverable amount of the investment subsequently increases.

Profits and losses resulting from the transactions between the Company and associates or joint ventures are recognized in the Company’ s parent company only financial statements only to the extent of interests in the associate or joint venture that are not related to the Company.

When the Company’ s share of losses exceeds its interest in an associate or a joint venture, the carrying amount of that interest, including any long-term investments that form part thereof, is reduced to zero, and the recognition of further losses is discontinued except to the extent that the Company has a legal or constructive obligation, or has made payments on behalf of the investee.

(9) Investment in subsidiaries

The investees which are controlled by the Company are measured under equity method in preparing the parent company only financial statement. The profit or loss, other comprehensive income and equity in the parent company only financial statement are equal to the profit or loss, other comprehensive income and equity attributable to the shareholders of parent in the consolidated financial statement. The Company prepares the consolidated financial statement quarterly comprising of AUO and its subsidiaries.

Changes in the Company’s ownership interests in subsidiaries that do not result in the Company losing of control over the subsidiary are accounted for as equity transaction.

(Continued)

10

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

(10) Spin-off

The Company demerged and transferred assets, liabilities and the operations to its subsidiary in exchange of the shares issued by the subsidiary. The cost of acquiring the subsidiary is based on the net carrying amount of the Company’s assets and liabilities split off. In the meanwhile, there was no gain or loss needed to be recognized.

In accordance with the FAQ issued by Accounting Research and Development Foundation dated January 30, 2019, the Company chose not to restate the parent company only and consolidated financial statements for the comparative period for such organizational restructuring.

(11) Investment property

Investment property is the property held either to earn rental income or for capital appreciation or for both, but not for sale in the ordinary course of business, use in the production or supply of goods or services or for administrative purposes. Investment property is measured at cost on initial recognition. Subsequent to initial recognition, investment properties are measured using the cost model. Depreciation is charged and recognized in non-operating income and expenses based on the depreciable amount. Depreciation methods, useful lives and residual values are in accordance with the policy of property, plant and equipment. Cost includes expenditure that is directly attributable to the acquisition of the investment property.

An investment property is reclassified to property, plant and equipment at its carrying amount when the use of the investment property changes.

• (12) Property, plant and equipment

• a. Recognition and measurement

Items of property, plant and equipment are measured at cost less accumulated depreciation and accumulated impairment losses. Cost includes expenditure that is directly attributed to the acquisition of the asset, any cost directly attributable to bringing the asset to the location and condition necessary for it to be capable of operating in the manner intended by management, the initial estimate of the costs of dismantling and removing the item and restoring the site on which it is located, and any borrowing cost that is eligible for capitalization. The cost of the software is capitalized as part of the equipment if the purchase of the software is necessary for the equipment to be capable of operating.

When part of an item of property, plant and equipment with a cost that is significant in relation to the total cost of the item and the useful life or the depreciation method of the significant part is different from another significant part of that same item, it is accounted for as a separate item (significant component) of property, plant and equipment.

The gain or loss arising from the derecognition of an item of property, plant and equipment is determined as the difference between the net disposal proceeds, if any, and the carrying amount of the item, and is recognized in profit or loss.

(Continued)

11

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

• b. Subsequent costs

Subsequent expenditure is capitalized only when it is probable that the future economic benefits associated with the expenditure will flow to the Company and the cost of the item can be measured reliably. Ongoing repairs and maintenance expenses are recognized in profit or loss as incurred.

c. Depreciation

Depreciation is determined by depreciable amount allocated over the estimated useful lives of the respective assets, considering significant components of an individual asset on a straightline basis. If a component has a useful life that is different from the remainder of that asset, that component is depreciated separately. Depreciation charge is recognized in profit or loss.

Leased assets are depreciated over their useful lives if it is reasonably certain that the Company will obtain ownership by the end of the lease term. Otherwise, leased assets are depreciated over the shorter of the lease term and their useful lives.

Except for land, which is not depreciated, the estimated useful lives of the assets are as follows:

• (i) Buildings: 20~50 years

• (ii) Machinery and equipment: 3~9 years

• (iii) Other equipment: 3~6 years

Depreciation methods, useful lives, and residual values are reviewed at each annual reporting date and, if necessary, adjusted as appropriate. Any changes therein are accounted for as changes in accounting estimates.

• d. Reclassification to investment property

A property is reclassified to investment property at its carrying amount when the use of the property changes from owner-occupied to investment purpose.

• (13) Leases

• a. Identifying a lease

A contract is, or contains, a lease when all the following conditions are satisfied:

• (i) the contract involves the use of an identified asset, and the supplier does not have a substantive right to substitute the asset; and

• (ii) the Company has the right to obtain substantially all of the economic benefits from use of the identified asset throughout the period of use; and

• (iii) the Company has the right to direct the use of the identified asset throughout the period of use.

(Continued)

12

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

b. As a lessee

Payments for leases of low-value assets and short-term leases are recognized as expenses on a straight-line basis during the lease term for which the recognition exemption is applied. Except for leases described above, a right-of-use asset and a lease liability shall be recognized for all other leases at the lease commencement date.

The Company recognizes a right-of-use asset and a lease liability at the lease commencement date. The lease liability is initially measured at the present value of the lease payments (including fixed payments and variable lease payments that depend on an index or a rate), discounted using the lessee’ s incremental borrowing rate. The right-of-use asset is initially measured at cost, which comprises the initial amount of the lease liability, adjusted for any lease payments made at or before the commencement date, less any lease incentives received, plus any initial direct costs incurred and an estimate of costs to be incurred in restoring the underlying asset.

The right-of-use asset is subsequently depreciated using the straight-line method over the shorter of the useful life of the right-of-use asset or the lease term. The lease liability is subsequently measured at amortized cost using the effective interest method. It is remeasured (i) if there is a change in the lease term; (ii) if there is a change in future lease payments arising from a change in an index or a rate; (iii) if there is a change in the amounts expected to be payable under a residual value guarantee; or (iv) if the Company changes its assessment of whether it will exercise a purchase, extension or termination option. When the lease liability is remeasured in the circumstances aforementioned, a corresponding adjustment is made to the carrying amount of the right-of-use asset. However, if the carrying amount of the right-of-use asset is reduced to zero, any remaining amount of the remeasurement is recognized in profit or loss.

Moreover, the lease liability is remeasured when lease modifications occur that decrease the scope of the lease. The Company accounts for the remeasurement of the lease liability by decreasing the carrying amount of the right-of-use asset to reflect the partial or full termination of the lease, and recognizes in profit or loss any gain or loss relating to the partial or full termination of the lease.

As a practical expedient, the Company elects not to assess whether all rent concessions that meets all the following conditions are lease modifications or not:

• (i) the rent concessions occurring as a direct consequence of the COVID-19 pandemic;

• (ii) the change in lease payments that resulted in revised consideration for the lease that is substantially the same as, or less than, the consideration for the lease immediately preceding the change;

• (iii) any reduction in lease payments that affects only those payments originally due on, or before, June 30, 2021; and

• (iv) there is no substantive change in other terms and conditions of the lease.

(Continued)

13

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

Under the practical expedient, the effect of the change in the lease liability is reflected in profit or loss in the period in which the event or condition that triggers the rent concession occurs.

• c.

• As a lessor

Lease income from an operating lease is recognized in profit or loss on a straight-line basis over the lease term. Initial direct costs incurred in negotiating and arranging an operating lease are added to the carrying amount of the asset leased to others and recognized as an expense on a straight-line basis over the lease term.

• (14) Intangible assets

• a. Goodwill

Goodwill is recognized when the purchase price exceeds the fair value of identifiable net assets acquired in a business combination. Goodwill is measured at cost less accumulated impairment losses.

Equity-method goodwill is included in the carrying amounts of the equity investments. The impairment losses for the goodwill within the equity-accounted investees are accounted for as deductions of carrying amounts of investments in equity-accounted investees.

• b. Research and development

During the research phase, activities are carried out to obtain and understand new scientific or technical knowledge. Expenditures during this phase are recognized in profit or loss as incurred.

Expenditure arising from development is capitalized as an intangible asset when the Company demonstrates all of the following:

• (i) the technical feasibility of completing the intangible asset so that it will be available for use or sale;

• (ii) its intention to complete the intangible asset and use or sell it;

• (iii) its ability to use or sell the intangible asset;

• (iv) the probability that the intangible asset will generate probable future economic benefits;

• (v) the availability of adequate technical, financial and other resources to complete the development and to use or sell the intangible asset; and

• (vi) its ability to measure reliably the expenditure attributable to the intangible asset during its development.

Development expenditure which fails to meet the criteria for recognition as an intangible asset is reflected in profit or loss when incurred. Capitalized development expenditure is measured at cost less accumulated amortization and any accumulated impairment losses.

(Continued)

14

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

• c. Other intangible assets

Other intangible assets acquired are measured at cost less accumulated amortization and any accumulated impairment losses.

• d. Subsequent expenditure

Subsequent expenditure is capitalized only when it increases the future economic benefits embodied in the specific asset to which it relates. All other expenditure, including expenditure on internally generated goodwill and brands, is recognized in profit or loss as incurred.

• e. Amortization

The depreciable amount of an intangible asset is the cost less its residual value. Other than goodwill and intangible assets with indefinite useful life, an intangible asset with a finite useful life is amortized over 3 to 20 years using the straight-line method from the date that the asset is made available for use. The amortization charge is recognized in profit or loss.

The residual value, amortization period, and amortization method are reviewed at least annually at each annual reporting date, and any changes therein are accounted for as changes in accounting estimates.

• (15) Noncurrent assets held for sale

Noncurrent assets are classified as held for sale when their carrying amounts are expected to be recovered primarily through sale rather than through continuing use. Such noncurrent assets must be available for immediate sale in their present condition and the sale is highly probable within one year. When classified as held for sale, the assets are measured at the lower of their carrying amount and fair value less costs to sell. Impairment losses on initial classification as held for sale and subsequent gains or losses on re-measurement are recognized in profit or loss. However, subsequent gains are not recognized in excess of the cumulative impairment loss that has been recognized.

When property, plant and equipment are classified as held for sale, they are no longer depreciated

• (16) Impairment – non-financial assets

Other than inventories, deferred tax assets and noncurrent assets held for sale, the carrying amounts of the Company’s investment property measured at cost and other long-term non-financial assets (property, plant and equipment, right-of-use assets and other intangible assets with finite useful lives), are reviewed at the reporting date to determine whether there is any indication of impairment. When there is an indication of impairment exists for the aforementioned assets, the recoverable amount of the asset is estimated. If it is not possible to estimate the recoverable amount of an individual asset, the Company estimates the recoverable amount of the cash-generating unit (“CGU”) to which the asset has been allocated to.

In performing an impairment test for other long-term non-financial assets, the estimated recoverable amount is evaluated in terms of an asset or a CGU. Any excess of the carrying amount of the asset or its related CGU over its recoverable amount is recognized as an impairment loss. The recoverable amount of an asset or a CGU is the higher of its fair value less costs of disposal and its value in use.

(Continued)

15

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

If there is evidence that the accumulated impairment loss of an asset other than goodwill and intangible assets with indefinite useful lives in prior years no longer exists or has decreased, the amount previously recognized as an impairment loss is reversed, and the carrying amount of the asset or CGU is increased to the revised estimate of its recoverable amount. The increased carrying amount shall not exceed the carrying amount that would have been determined (net of depreciation or amortization) had no impairment loss been recognized for the asset in prior years.

For goodwill and intangible assets with indefinite useful lives or that are not yet available for use, are required to be tested for impairment at least annually. Any excess of the carrying amount of the asset over its recoverable amount is recognized as an impairment loss.

For the purpose of impairment test, goodwill acquired in a business combination is allocated to CGUs that are expected to benefit from the synergies of the combination. If the recoverable amount of a CGU is less than its carrying amount, the difference is allocated first to reduce the carrying amount of any goodwill allocated to the unit, then the carrying amounts of the other assets in the unit on a pro rata basis. The impairment loss recognized on goodwill is not reversed in a subsequent period.

• (17) Provisions

A provision is recognized when the Company has a present obligation arising from a past event, it is probable that the Company will be required to make an outflow of resources embodying economic benefits to settle the obligation, and the amount of the obligation can be estimated reliably. Provisions are determined by discounting the expected future cash flows at a pre-tax rate that reflects the current market assessments of the time value of money and the risks specific to the liability. The unwinding of the discount is recognized as interest expense.

a. Warranties

A provision for warranties is recognized when the underlying products or services are sold. The provision is weighting factors based on historical experience of warranty claims rate and other possible outcomes against their associated probabilities.

b.

Decommissioning obligation

The Company is subject to decommissioning obligations related to certain items of property, plant and equipment. Such decommissioning obligations are primarily attributable to clean-up costs, including deconstruction, transportation, and recover costs. The unwinding of the discount based on original discount rate is recognized in profit or loss as interest expense over the periods with corresponding increase in the carrying amounts of the accrued decommissioning costs. The carrying amount of the accruals at the end of the assets’ useful lives is the same as the estimated decommissioning costs.

(Continued)

16

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

c. Litigation

Management periodically assesses the obligation of all litigation and claims and relative legal costs. Provision for loss contingencies arising from claims, assessments, litigation, fines, and penalties and other sources are recognized when it is probable the present obligation as a result of a past event will result in an outflow of resources and the amount can be reasonably estimated.

Provisions recognized are the best estimates of the expenditure for settling the present obligation at each reporting date.

(18) Treasury shares

Where the Company repurchases its common stock that has been issued, the consideration paid, including all directly attributable costs is recorded as treasury share and deducted from equity. When treasury share is reissued, the excess of sales proceeds over cost is accounted for as capital surplus – treasury shares. If the sales proceeds are less than cost, the deficiency is accounted for as a reduction of capital surplus arising from similar types of treasury shares. If such capital surplus is insufficient to cover the deficiency, the remainder is recorded as a reduction of retained earnings. The carrying amount of treasury share is calculated using the weighted-average cost of different types of repurchase.

If treasury share is retired, the weighted-average cost of the retired treasury share is written off against the par value and the capital surplus premium, if any, of the stock retired on a pro rata basis. If the weighted-average cost written off exceeds the sum of the par value and the capital surplus premium, the difference is accounted for as a reduction of capital surplus – treasury shares, or a reduction of retained earnings for any deficiency where capital surplus – treasury shares is insufficient to cover the difference. If the weighted-average cost written off is less than the sum of the par value and the capital surplus premium, if any, of the stock retired, the difference is accounted for as an increase in capital surplus – treasury shares.

(19) Revenue from contracts with customers

Revenue is measured based on the consideration that the Company expects to be entitled in the transfer of goods or services to a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The following is a description of the Company’s major revenues:

a. Sales of goods

Revenue is recognized when the control over a product has been transferred to the customer. The transfer of control refers to the product has been delivered to and accepted by the customer without remaining performance obligations from the Company. Delivery occurs when the product has been shipped to the specified location and the risk of loss over the product has been transferred to the customer, as well as when the product has been accepted by the customer according to the terms of sales contract, or when the Company has objective evidence that all criteria for acceptance have been satisfied.

(Continued)

17

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

For certain contracts with volume discounts offer to customers, revenue is recognized on a net basis of contract price less estimated volume discounts, and only to the extent that it is highly probable that a significant reversal will not occur. The amount of volume discounts is estimated based on the expected value with reference to the historical experience, and is recorded as refund liability (presented under other current liabilities).

Trade receivable is recognized when the Company is entitled for unconditional right to receive payment upon delivery of goods to customers. The consideration received in advance from the customer according to the sales contract but without delivery of goods is recognized as a contract liability, for which revenue is recognized when the control over the goods is transferred to the customer.

The Company provides standard warranties for goods sold and has obligation to refund payments for defective goods, in which the Company has recognized provisions for warranties to fulfill the obligation. Refer to Note 4(17) for further details.

b. Construction contracts

For construction contracts, revenue is recognized progressively based on the progress towards complete satisfaction of contract activities, and only to the extent that it is highly probable that a significant reversal in the amount of cumulative revenue recognized will not occur.

If the Company cannot reasonably measure its progress towards complete satisfaction of performance obligations in accordance with the construction contracts, revenue is recognized only to the extent of contract costs incurred that it is expected to be recoverable.

The consideration is paid by the customer according to the agreed payment terms. The excess of the amount that has been recognized as revenue over the amount that the Company has issued a bill is recognized as a contract asset. When the entitlement to the payment becomes unconditional, the contract asset is transferred to receivables.

A contract liability is recognized for an advance consideration that the Company has billed to customers arising from construction contracts. When the construction is completed and accepted by the customers, the contract liability is transferred to revenue.

If there are changes in circumstances, the estimates of revenue, cost and the progress towards complete satisfaction of contract will be amended. Any changes therein are recognized in profit or loss during the period in which the changes and amendments are made.

The Company provides standard warranties for construction contracts and has recognized provisions for warranties to fulfill the obligation. Refer to Note 4(17) for further details.

c.

Financing components

The Company expects that the length of time when the Company transfers the goods or services to the customer and when the customer pays for those goods or services will be less than one year. Therefore, the amount of consideration is not adjusted for the time value of money.

(Continued)

18

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

(20) Employee benefits

• a. Defined contribution plans

Obligations for contributions to defined contribution pension plans are recognized as an employee benefit expense in profit or loss in the periods during which services are rendered by employees.

b. Defined benefit plans

The Company’ s net obligation in respect of defined benefit pension plans is calculated separately for each benefit plan by estimating the amount of future benefit that employees have earned in the current and prior periods, discounting that amount and deducting the fair value of any plan assets. Discount rate is determined by reference to the yield rate of Taiwan government bonds at the reporting date. The calculation of defined benefit obligations is performed annually by a qualified actuary using the Projected Unit Credit Cost Method.

Remeasurements of the net defined benefit liability (asset) which comprise actuarial gains and losses, the return on plan assets (excluding interest) and the effect of the asset ceiling (if any, excluding interest), are recognized in other comprehensive income in the period in which they occur, and which then are reflected in retained earnings and will not be reclassified to profit or loss.

When the benefits of a plan are changed or when a plan is curtailed, the resulting change in benefit that relates to past service or the gain or loss on curtailment is recognized immediately in profit or loss. The Company recognizes gains and losses on the settlement of a defined benefit plan when the settlement occurs.

c. Short-term employee benefits

Short-term employee benefit obligations, which are due to be settled within twelve months are measured on an undiscounted basis and are expensed as the related service is provided.

The expected cost of cash bonus or profit-sharing plans, which is anticipated to be paid within one year, are recognized as a liability when the Company has a present legal or constructive obligation to pay this amount as a result of past service provided by the employee, and the obligation can be estimated reliably.

• (21) Share based payment arrangements

The compensation cost of employee share based payment arrangements for which subsidiaries grant to their employees is measured based on the fair value at the date on which they are granted. The compensation cost is recognized, together with a corresponding increase in equity, over the periods in which the employees become unconditionally entitled to the awards in the consolidated financial statements.

(Continued)

19

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

The compensation is recognized as a liability in the parent company only financial statements when the Company has the obligation to settle the aforementioned share-based payment transactions. Subsequent to initial recognition, the liability is measured at fair value of the underlying shares on each reporting date and settlement date, and changes therein are recognized in profit or loss. The amount of the compensation cost recognized as an expense is adjusted to reflect the number of awards whose related service and non-market performance conditions are expected to be met, such that the amount ultimately recognized as an expense is based on the number of awards that meet the related service and non market performance conditions at the vesting date.

• (22) Income taxes

Income tax expense comprises current and deferred taxes.

• a. Current taxes

Current taxes comprise the expected tax payable or receivable on the taxable income or losses for the year and any adjustments to tax payable or receivable in respect of previous years. It is measured using the statutory tax rate or the actual legislative tax rate at the reporting date.

In accordance with the ROC Income Tax Act, undistributed earnings from the companies located in the Republic of China, if any, is subject to an additional surtax. The surtax on unappropriated earnings is expensed in the year the shareholders approved the distributions which is the year subsequent to the year the earnings arise.

b. Deferred taxes

Deferred taxes are recognized in respect of temporary differences between the carrying amounts of assets and liabilities for financial reporting purposes and the amounts used for income tax purposes. Deferred tax liabilities are recognized for temporary difference of future taxable income. Deferred tax assets are recognized for unused tax losses, unused tax credits and deductible temporary differences to the extent that it is probable that future taxable profits will be available against which they can be utilized.

Deferred tax assets are reviewed at annual reporting date, by considering global economic environment, industry environment, statutory tax deduction years and projected future taxable income, and reduced to the extent that it is no longer probable that future taxable profits will be available to allow all or part of the deferred tax asset to be recovered. Deferred tax assets which originally not recognized is also reviewed at annual reporting date and recognized to the extent that it is probable that future taxable profits will be available to allow all or part of the deferred tax asset to be recovered.

Deferred taxes liabilities for taxable temporary differences related to investments in subsidiaries, associates and joint arrangements are recognized, unless the Company is able to control the timing of the reversal of the taxable temporary differences and it is probable that they will not reverse in the foreseeable future.

Deferred tax is measured at the tax rates that are expected to be applied to temporary differences when the reverse, using the statutory tax rate or the actual legislative tax rate on the reporting date. Deferred tax assets and liabilities are offset only if certain criteria are met.

(Continued)

20

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

Current taxes and deferred taxes are recognized in profit or loss except to the extent that it relates to items recognized directly in equity or other comprehensive income.

• (23) Earnings per share

Basic earnings per share is computed by dividing profit or loss attributable to the shareholders of the Company by the weighted-average number of common shares outstanding during the period. In computing diluted earnings per share, profit or loss attributable to the shareholders of the Company and the weighted-average number of common shares outstanding during the period are adjusted for the effects of dilutive potential common stock, assuming dilutive share equivalents had been issued.The Company’ s potential dilutive common stock comprise the estimate of employee compensation.

The weighted-average outstanding shares are retroactively adjusted for the effects of stock dividends transferred from retained earnings or capital surplus to common stock.

• (24) Operating segments

The Company has provided the operating segments disclosure in the consolidated financial statements. Thus, disclosure of the segment information in the parent company only financial statements is waived.

5. Critical Accounting Judgments and Key Sources of Estimations and Assumptions Uncertainty

The preparation of the parent company only financial statements in conformity with the Regulations requires management to make judgments, estimates and assumptions that affect the application of the accounting policies and the reported amount of assets, liabilities, income and expenses. Actual results may differ from these estimates.

Estimates and underlying assumptions are reviewed by management on an ongoing basis. Revisions to accounting estimates are recognized in the period in which the estimates are revised and in any future periods affected.

Information about critical judgments, estimates and assumptions in applying accounting policies that have the significant effect on the amounts recognized in the parent company only financial statements is included in the following notes:

(1) Impairment of long-term non-financial assets, other than goodwill

In the process of evaluating the potential impairment of tangible and intangible assets other than goodwill, the Company is required to make subjective judgments in determining the independent cash flows, useful lives, expected future income and expenses related to the specific asset groups with the consideration of the usage mode of asset and the nature of industry. Any changes in these estimates based on changed economic conditions or business strategies could result in significant impairment charges or reversal in future years.

(Continued)

21

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

(2) Impairment of goodwill

The assessment of impairment of goodwill requires the Company to make subjective judgment to determine the identified CGUs, allocate the goodwill to relevant CGUs and estimate the recoverable amount of relevant CGUs.

(3) Recognition of deferred tax assets

Deferred tax assets are recognized to the extent that it is probable that future taxable profits will be available against which those deferred tax assets can be utilized. Assessment of the realization of the deferred tax assets requires management’s subjective judgment and estimate, including the future revenue growth and profitability, the sources of taxable income, the amount of tax credits can be utilized and feasible tax planning strategies. Changes in the global economic environment, the industry trends and relevant laws and regulations may result in adjustments to the deferred tax assets.

(4) Valuation of inventories

As inventories are stated at the lower of cost or net realizable value, the Company estimates the net realizable value of inventories for obsolescence and unmarketable items at the end of reporting period and then writes down the cost of inventories to net realizable value. The net realizable value of the inventory is mainly determined based on assumptions of future demand within a specific time horizon. Due to the rapid industrial transformation, there may be significant changes in the net realizable value of inventories.

6. Description of Significant Accounts

(1) Cash and Cash Equivalents

Cash on hand, demand deposits and checking accounts Time deposits	December 31, 2021 $ 28,465,702 7,155,236 $ 35,620,938	December 31, 2020
		32,484,255 22,485,070
		54,969,325

Refer to Note 6(26) for the disclosure of credit risk, currency risk and sensitivity analysis of the financial instruments of the Company.

As at December 31, 2021 and 2020, no cash and cash equivalents were pledged with banks as collaterals.

• (2) Financial Assets and Liabilities at Fair Value through Profit or Loss (“FVTPL”)

Financial assets mandatorily measured at FVTPL: Foreign currency forward contracts Financial liabilities held for trading: Foreign currency forward contracts	December 31, 2021 $ 130,434 $ 39,294	December 31, 2020
		21,361
		135,420

(Continued)

22

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

The Company entered into derivative contracts to manage the exposure to currency risk arising from operating activities. Refer to Note 6(26) for the disclosure of the Company’s credit and currency risks related to financial instruments.

As at December 31, 2021 and 2020, the Company’s outstanding foreign currency forward contracts were as follows:

	December 31, 2021
Contract item Sell USD / Buy NTD Sell USD / Buy JPY Sell EUR / Buy JPY	Maturity date Contract amount Jan. 2022~Feb. 2022 USD 754,000 / NTD 21,005,670 Jan. 2022~Feb. 2022 USD 158,000 / JPY 18,016,025 Jan. 2022~Feb. 2022 EUR 14,000 / JPY 1,814,893

	December 31, 2020
Contract item Sell USD / Buy NTD Sell USD / Buy JPY Sell EUR / Buy JPY Sell HKD / Buy USD Sell USD / Buy EUR	Maturity date Contract amount Jan. 2021~Feb. 2021 USD 514,000 / NTD 14,520,265 Jan. 2021~Feb. 2021 USD 108,000 / JPY 11,209,743 Jan. 2021~Feb. 2021 EUR 10,000 / JPY 1,253,050 Jan. 2021 HKD 500 / USD 64 Jan. 2021 USD 2,398 / EUR 2,000

(3) Financial Assets at Fair Value through Other Comprehensive Income (“FVTOCI”)

Investments in equity instruments at FVTOCI: Equity securities – listed stocks	December 31, 2021 $ 65,989	December 31, 2020
		-

The purpose that the Company invests in the abovementioned equity securities is for long-term strategies, but rather for trading purpose. Therefore, those equity securities are designated as financial assets at FVTOCI.

Upon the re assessment, the Company considers that it has significant influence over Qisda Corporation (“Qisda”); consequently, at the end of December 2020 the equity investment in Qisda previously classified as financial assets at FVTOCI was reclassified as investments accounted for using the equity method. Refer to Note 6(7) for the relevant information.

If the value of these equity securities appreciates or depreciates by 10% at the reporting date, other comprehensive income would increase or decrease by $6,599 thousand for the year ended December 31, 2021.

(Continued)

23

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

Dividends recognized from the investments in equity instruments at FVTOCI held by the Company were disclosed as follows:

Investments held at the balance sheet date Investments disposed during the reporting period	For the years ended December 31,	For the years ended December 31,
	2021 $ 2,598 - $ 2,598	2020
		- 251,423
		251,423

As at December 31, 2021, and 2020 none of the Company’s aforementioned financial assets was pledged as collateral.

• (4) Financial Assets at Amortized Cost

Financial Assets at Amortized Cost
Domestic time deposits	December 31, 2021
	$ 10,000,000

The Company has assessed that these financial assets are held-to-maturity to collect contractual cash flows, which consist solely of payments of principal and interest on principal amount outstanding. Therefore, these investments were classified as financial assets at amortized cost.

As at December 31, 2021, none of the Company’s domestic time deposits was pledged as collateral.

• (5) Accounts Receivable, net (Including Related and Unrelated Parties)

Accounts receivable Less: loss allowance Accounts receivable, net Accounts receivable from related parties, net	December 31, 2021 $ 56,459,488 (485) $ 56,459,003 $ 48,983,659 $ 7,475,344	December 31, 2020 43,844,611 (200) 43,844,411 41,585,707 2,258,704

(Continued)

24

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

The Company measures loss allowance for accounts receivable using the simplified approach under IFRS 9 with the lifetime expected credit losses. Analysis of expected credit losses which was measured based on the aforementioned method, was as follows:

Not past due Past due less than 60 days Past due 61~180 days Not past due Past due less than 60 days Past due 61~180 days	December 31, 2021	December 31, 2021
	Carrying amount of accounts receivable Weighted- average loss rate $ 55,595,884 0.00% 851,595 0.01% 12,009 2.59% $ 56,459,488 December 31, 2020		Loss allowance for lifetime expected credit losses
			102 72 311
			485
		Weighted- average loss rate 0.00% 0.01% 0.00%	Loss allowance for lifetime expected credit losses
			88 112 -
			200

The movement of the loss allowance for accounts receivable was as follows:

Balance at beginning of the year Provisions charged to expense Balance at end of the year	For the years ended December 31,	For the years ended December 31,
	2021 $ 200 285 $ 485	2020
		150 50
		200

The payment terms granted to customers are generally 25 to 60 days from the end of the month during which the invoice is issued. This term is consistent with practices in our industry, and thus, no financing components involved.

Information about the Company’s exposure to credit risk is included in Note 6(26).

(Continued)

25

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

(6) Inventories

Finished goods Work-in-progress Raw materials	December 31, 2021 $ 8,613,195 10,293,672 2,784,685 $ 21,691,552	December 31, 2020
		6,811,795 9,842,574 2,330,407
		18,984,776

For the years ended December 31, 2021 and 2020, the amounts recognized as cost of sales in relation to inventories were $260,307,149 thousand and $240,070,378 thousand, respectively. The net of provisions (reversals) for inventories written down (increased) to net realizable value, which were also included in cost of sales, amounted to $865,868 thousand in provisions and $1,693,966 thousand in reversals for the years ended December 31, 2021 and 2020, respectively.

As at December 31, 2021 and 2020, none of the Company’s inventories was pledged as collateral.

(7) Investments in Equity-accounted Investees

Subsidiaries Associates	December 31, 2021 $ 92,701,406 17,486,238 $ 110,187,644	December 31, 2020
		70,287,701 15,580,327
		85,868,028

a. Subsidiaries

Refer to consolidated financial statements for the years ended December 31, 2021 and 2020 for the details.

b. Associates

Qisda Ennostar Inc.(“Ennostar”) ADLINK Technology Inc. (“ADLINK”) Star Shining Energy Corporation. (“SSEC”) Lextar Electronics Corp. (“Lextar”) Star River Energy Corp. (SREC)	December 31, 2021 $ 10,807,806 2,248,301 2,219,249 2,210,882 - - $ 17,486,238	December 31, 2020
		9,704,923 - 2,311,727 1,586,817 1,549,703 427,157
		15,580,327

(Continued)

26

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

None of the above associates is considered individually material to the Company. The following table summarized the amount recognized by the Company at its share of those associates.

associates.
The Company’s share of associates’: Profit (loss) Other comprehensive income (loss) Total comprehensive income (loss)	For the years ended December 31, 2021 2020 $ 1,620,067 (49,033) 50,315 (28,053) $ 1,670,382 (77,086)
	2021 $ 1,620,067 50,315 $ 1,670,382

On February 5, 2020, the Company’s Board of Directors resolved to acquire common shares of ADLINK through tender offer. As of December 31, 2021, the Company holds a total of 42,310 thousand common shares of ADLINK for totaling of 19.45% equity interest in ADLINK.

Lextar, upon the resolution of its Board of Directors on June 18, 2020, carried out a joint share exchange with Epistar Corporation (“Epistar”) for a newly incorporated company, Ennostar. Such plan was also approved by Lextar’s and Epistar’s special shareholders’ meetings held on August 7, 2020. In November 2020, Lextar received a written decision on anti monopoly examination of the business operators’ concentration from the Antitrust authority in China wherein the authority approved and decided not to prohibit the concentration. On the record date, January 6, 2021, Ennostar’ s shares have been publicly listed on the Taiwan Stock Exchange. In the meanwhile, Lextar’ s and Epistar’ s listing and public offering were terminated. Upon completion of the share exchange, the Company still remains significant influence over Ennostar.

When the share exchange took place on January 6, 2021, the Company deemed the conversion of shares of Lextar as disposal. The fair value at disposal was $1,793,854 thousand and the gain on disposal was $498,701 thousand.

The Company is the sole largest shareholder of SREC with 32.01% of its voting shares. Upon the amendment to the joint venture agreement in January 2021, the Company re-assessed the investment of SREC and considered that it has control over the main operating activities of SREC. Consequently, SREC was treated as the subsidiary from January 2021.

In consideration of the Company’s operational strategy, the Company and its subsidiary have continued to increase its shareholdings in Qisda through its subsidiary, Konly Venture Corp. (“Konly”) since November 2020. Upon the re-assessment, the Company considers that it has obtained the ability to exercise significant influence over Qisda; consequently, at the end of December 2020, the Company derecognized the investment in Qisda previously classified as financial assets at FVTOCI, and further recognized an investment accounted for using the equity method at fair value. The related cumulative gain of $3,863,348 thousand that was previously recognized in other comprehensive income under items never be reclassified in profit or loss was reclassified to retained earnings.

As at December 31, 2021 and 2020, none of the Company’s investments in equity-accounted investees was pledged as collateral.

(Continued)

27

AU OPTRONICS CORP.

Notes to the Parent Company Only Financial Statements

(8) Property, Plant and Equipment

For the year ended December 31, 2021 Balance, Beginning of Year Additions (deductions) Disposal or write off Spin-off Reclassification Balance, End of Year Cost: Land $ 6,344,658 - - - - 6,344,658 Buildings 88,065,114 180 (903,202) - 12,903 87,174,995 Machinery and equipment 700,787,904 859,121 (6,676,122) (167) 3,535,785 698,506,521 Other equipment 27,040,662 2,790,733 (3,452,487) (16,481) 483,082 26,845,509 822,238,338 3,650,034 (11,031,811) (16,648) 4,031,770 818,871,683 Accumulated depreciation and impairment loss: Buildings 26,565,851 1,761,391 (883,013) - - 27,444,229 Machinery and equipment 645,769,249 16,352,380 (6,660,989) (167) - 655,460,473 Other equipment 21,342,963 3,897,158 (3,449,313) (5,099) - 21,785,709 693,678,063 22,010,929 (10,993,315) (5,266) - 704,690,411 Prepayments for purchase of land and equipment, and construction in progress 993,930 6,421,828 - - (4,031,770) 3,383,988 Net carrying amounts $ 129,554,205 117,565,260 For the year ended December 31, 2020 Balance, Beginning of Year Additions (deductions) Disposal or write off Reclassification Balance, End of Year Cost: Land $ 6,344,658 - - - 6,344,658 Buildings 87,793,792 (10,291) - 281,613 88,065,114 Machinery and equipment 706,595,480 932,776 (12,917,768) 6,177,416 700,787,904 Other equipment 25,764,841 3,283,671 (2,538,689) 530,839 27,040,662 826,498,771 4,206,156 (15,456,457) 6,989,868 822,238,338 Accumulated depreciation and impairment loss: Buildings 24,767,492 1,798,359 - - 26,565,851 Machinery and equipment 641,166,292 17,237,806 (12,915,830) 280,981 645,769,249 Other equipment 19,859,655 4,300,543 (2,536,254) (280,981) 21,342,963 685,793,439 23,336,708 (15,452,084) - 693,678,063 Prepayments for purchase of land and equipment, and construction in progress 3,437,406 4,546,392 - (6,989,868) 993,930 Net carrying amounts $ 144,142,738 129,554,205			For	For	the year ended	the year ended	the year ended	December 31,	December 31,	December 31,	2021	2021
			Additions (deductions)										Balance, End of Year 6,344,658 87,174,995 698,506,521 26,845,509
													818,871,683
													27,444,229 655,460,473 21,785,709
													704,690,411
													3,383,988
													117,565,260
		Balance, Beginning of Year $ 6,344,658 87,793,792 706,595,480 25,764,841 826,498,771 24,767,492 641,166,292 19,859,655 685,793,439 3,437,406 $ 144,142,738		Additions (deductions) - (10,291) 932,776 3,283,671 4,206,156 1,798,359 17,237,806 4,300,543 23,336,708 4,546,392		Disposal or write off Reclassification - - - 281,613 (12,917,768) 6,177,416 (2,538,689) 530,839 (15,456,457) 6,989,868 - - (12,915,830) 280,981 (2,536,254) (280,981) (15,452,084) - - (6,989,868)			Reclassification			Balance, End of Year
										- 281,613 6,177,416 530,839 6,989,868 - 280,981 (280,981) - (6,989,868)		6,344,658 88,065,114 700,787,904 27,040,662
												822,238,338
												26,565,851 645,769,249 21,342,963
												693,678,063
												993,930
												129,554,205

(Continued)

28

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

As of December 31, 2021 and 2020, a non-irrigated farmland located in LongTan plant amounted to $23,671 thousand was registered in the name of a farmer due to regulations. An agreement of pledge had been signed between the Company and the farmer clarifying the rights and obligations of each party.

In 2021 and 2020, the Company wrote down certain long-term assets with extremely low capacity utilization associated with its display segment and recognized impairment losses of $44,227 thousand and $36,757 thousand, respectively.

In 2021 and 2020, the Company wrote down certain long-term assets with extremely low capacity utilization associated with its energy segment and recognized impairment losses of $26,809 thousand and $31 thousand, respectively.

Impairment losses as mentioned above were recognized under other gains and losses in the parent company only statements of comprehensive income.

The Company disposed of part of its plants and related appendages to Vanguard International Semiconductor Corporation pursuant to the resolution of Board of Directors’ meeting held on April 28, 2021. Both parties have completed the transaction in December 2021. The consideration of disposal (net of related transaction costs) and gain on disposal were $808,662 thousand and $787,460 thousand, respectively. The consideration aforementioned is to be received in installments. As of December 31, 2021, outstanding receivables totaled $509,524 thousand (recognized in other current financial assets), which were fully received in January 2022.

The following table summarized the Company’s capitalized borrowing costs and the interest rate range applied for the capitalization:

Capitalized borrowing costs The interest rates applied for the capitalization	For the years ended December 31,	For the years ended December 31,
	2021 $ 35,568 1.50%~ 1.63%	2020
		37,917
		1.63%~ 1.77%

Certain property, plant and equipment were pledged as collateral, see Note 8.

• (9) Lease Arrangements

• a. Lessee

  • (i) Right-of-use assets

Carrying amount of right-of-use assets Land Buildings	December 31, 2021 $ 8,260,763 64,926 $ 8,325,689	December 31, 2020
		8,685,550 104,525
		8,790,075

(Continued)

29

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

Additions to right-of-use assets Depreciation charge for right-of-use assets Land Buildings Other equipment	For the years ended December 31,	For the years ended December 31,
	2021 $ - $ 414,656 39,599 - $ 454,255	2020
		78,331
		418,269 36,590 32,517
		487,376

(ii) Lease liabilities

Less than one year Between one and five years More than five years Lease liabilities－current Lease liabilities－noncurrent Less than one year Between one and five years More than five years Lease liabilities－current Lease liabilities－noncurrent	December 31, 2021	December 31, 2021
	Future minimum lease payments Interests Present value of minimum lease payments $ 530,417 152,144 378,273 2,075,976 538,837 1,537,139 7,680,569 1,063,995 6,616,574 $ 10,286,962 1,754,976 8,531,986 $ 378,273 8,153,713 $ 8,531,986 December 31, 2020		Present value of minimum lease payments
			378,273 1,537,139 6,616,574
			8,531,986
		Interests Present value of minimum lease payments 159,358 390,595 567,418 1,534,447 1,189,227 7,007,910 1,916,003 8,932,952 $ 390,595 8,542,357 $ 8,932,952	Present value of minimum lease payments
			390,595 1,534,447 7,007,910
			8,932,952

(Continued)

30

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

(iii) Significant lease agreements

AUO has entered into various land lease agreements with Hsinchu Science Park Bureau, Central Science Park Administration Bureau and Southern Taiwan Science Park Bureau, respectively, for the construction of plant for operations. All lease amounts are adjusted in accordance with the land value announced by the government from time to time. In 2021 and 2020, AUO modified some of its lease contracts due to the decrease of the scope of the lease, and therefore, the carrying amounts of the right-of-use assets were reduced by $10,131 thousand and $147,371 thousand, respectively. The difference between the remeasurement of the lease liability and the reduction of the right-of-use asset was recognized in profit or loss.

(iv) Additional lease information

The Company applies the recognition exemption to account for short-term leases and leases of low-value assets, primarily for some leases of office buildings and other sporadic leasing. The amounts recognized in profit or loss during the lease term were as follows:

Expenses relating to short-term leases COVID-19-related rent concessions (recognized as deduction of rent expense)	For the years ended December 31,	For the years ended December 31,
	2021 $ - $ -	2020
		1,539
		32,385

Total cash outflow for the Company’s leases in which it acts as a lessee for the years ended December 31, 2021 and 2020 were $549,472 thousand and $579,531 thousand, respectively.

b. Lessor

The Company leased out part of its land, recognized as investment properties, and did not transfer substantially all the risks and rewards incidental to their ownership to the lessee, therefore, those leases were recognized as operating leases. Refer to Note 6(21) for the information of rental income from operating leases. In addition, the direct costs relating to the aforementioned operating leases for the years ended December 31, 2021 and 2020 were $541 thousand and $563 thousand, respectively.

(Continued)

31

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

The maturity analysis of undiscounted operating lease receivable for the abovementioned assets are as follows:

Year 1 Year 2 Year 3 Year 4 Year 5 Year 6 onwards Total undiscounted operating lease receivable	December 31, 2021 $ 8,052 8,052 8,052 8,052 8,052 46,970 $ 87,230	December 31, 2020 8,052 8,052 8,052 8,052 8,052 55,022 95,282

(10) Investment Property

Cost: Land Fair Value Cost: Land Fair Value	For theyear ended December 31, 2021	For theyear ended December 31, 2021	For theyear ended December 31, 2021	For theyear ended December 31, 2021
	Balance, Beginning of Year Additions Reclassification Balance, End of Year $ 465,868 - - 465,868 $ 1,578,838 1,705,905 For theyear ended December 31, 2020			Balance, End of Year
				465,868
				1,705,905
		Additions - -	Reclassification - -	Balance, End of Year
				465,868
				1,578,838

The fair value of investment property is based on a valuation performed by a qualified independent appraiser who holds a recognized and relevant professional qualification and has recent valuation experience in the location and category of the investment property being valued. The valuation is performed using sales comparison approach and land development analysis approach with reference to available market information.

(Continued)

32

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

The fair value measurement was categorized as a level 3 fair value based on the inputs in the valuation techniques used. Sales comparison approach is through comparison, analysis, adjustment and other means of value for comparable properties to estimate the value of the investment property. Land development analysis approach determine the fair value of investment property based on the value prior to development or construction, after deducting the direct cost, indirect cost, capital interest and profit during the development period, and also consider total sales price of properties after completion of development or construction. It also incorporates the possibility of changes in utility of land through development or improvement in accordance with legal use and density of the land.

The significant inputs used in the fair value measurement were as follows:

Overall capital interest rate Rate of return	For the years ended December 31,
	2021 2020 % 1.91 % 2.53 % 15.00 % 15.00

As at December 31, 2021 and 2020, there was no investment property that was pledged as collateral.

• (11) Intangible Assets

Cost: Goodwill Patent and technology fee Accumulated amortization and impairment loss: Goodwill Patent and technology fee Net carrying amounts	For	theyear ended	December 31, 2021	December 31, 2021
	Balance, Beginning of Year $ 11,280,595 12,078,767 23,359,362 - 11,552,912 11,552,912 $ 11,806,450	Additions - - - 946,689 170,775 1,117,464 (1,117,464)	Reclassification - - - - - - -	Balance, End of Year
				11,280,595 12,078,767
				23,359,362
				946,689 11,723,687
				12,670,376
				10,688,986

(Continued)

33

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

Cost: Goodwill Patent and technology fee Accumulated amortization: Patent and technology fee Net carrying amounts	For	theyear ended	December 31, 2020	December 31, 2020
	Balance, Beginning of Year $ 11,280,595 12,078,767 23,359,362 11,307,601 $ 12,051,761	Additions - - - 245,311 (245,311)	Reclassification - - - - -	Balance, End of Year
				11,280,595 12,078,767
				23,359,362
				11,552,912
				11,806,450

For the purpose of impairment test, the following table shows the information of the operating business that the Company’s goodwill allocating to.

ess that the Company’s goodwill allocating to.
Display business	December 31, 2021 $ 10,333,906	December 31, 2020
		11,280,595

The Company’ s goodwill has been tested for impairment at least once at the end of the annual reporting period. The recoverable amount was determined based on value in use of the operating business.

The key assumptions used in the estimation of the recoverable amount included discount rate and terminal growth rate. The annual discount rates for the years ended December 31, 2021 and 2020 were 10.42% and 13.63%, respectively, based on industry weighted average cost of capital. The cash flow projections were determined based on the financial budgets approved by management covering the future five-year period and extrapolated with a steady annual terminal growth rate for subsequent years, which were negative 1% , for both 2021 and 2020. The key assumptions abovementioned represents the management’s forecast of the future for the related industry by considering the history information from internal and external sources.

Based on the impairment assessment in 2021, as the recoverable amount of display CGU was lower than its carrying value, the Company recognized an impairment loss of NT$946,689 thousand on goodwill of display segment.

Based on the impairment assessment in 2020, no impairment loss was recognized as the recoverable amount of display CGU was higher than its carrying value.

(Continued)

34

AU OPTRONICS CORP.

Notes to the Parent Company Only Financial Statements

• (12) Other Current Assets and Other Noncurrent Assets

Prepayments for purchases Refundable deposits Refundable and overpaid tax Others Less: current Noncurrent	December 31, 2021 $ 960,171 922,576 235,373 2,884,018 5,002,138 (1,881,797) $ 3,120,341	December 31, 2020 101,534 381,528 360,688 2,315,894 3,159,644 (1,938,708) 1,220,936

• (13) Long-term Borrowings

Bank or agent bank Syndicated loans: Bank of Taiwan and others Bank of Taiwan and others Bank of Taiwan and others Bank of Taiwan and others Unsecured loans Secured loans Less: transaction costs Less: current portion Unused credit facilities Interest rate range	Durations From Feb. 2019 to Feb. 2024 From Mar. 2019 to Apr. 2023 From Oct. 2021 to Oct. 2025 From May. 2017 to Apr. 2021 From Aug. 2018 to May 2024 From Nov. 2019 to Dec. 2026	December 31, 2021 $ 12,000,000 4,600,000 9,750,000 - 1,200,000 13,500,000 41,050,000 (402,755) 40,647,245 (12,267,653) $ 28,379,592 $ 87,100,000 0.7500%~ 1.7895%	December 31, 2020 42,000,000 23,000,000 - 6,000,000 8,200,000 16,737,500 95,937,500 (297,982) 95,639,518 (11,184,508) 84,455,010 51,050,000 0.7500%~ 1.7895%

The Company entered into the aforementioned long-term loan arrangements with banks and financial institutions to finance capital expenditures for purchase of machinery and equipment, and to fulfill working capital, as well as to repay the matured debts. A commitment fee is negotiated with the leading banks of syndicated loans and is calculated based on the committed-to-withdraw but unused balance, if any. No commitment fees were paid for the year ended December 31, 2021.

These credit facilities contain covenants that require the Company to maintain certain financial ratios, calculating based on the Company’ s annual audited consolidated financial statements prepared in accordance with IFRSs endorsed and issued into effect by the FSC, such as current ratio, leverage ratio, interest coverage ratio, tangible net worth and others as specified in the loan agreements. As of December 31, 2021 and 2020, the Company complied with all financial covenants required under each of the loan agreements.

(Continued)

35

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

Refer to Note 6(26) for detailed information of exposures to interest rate, currency, and liquidity risks. Refer to Note 8 for assets pledged as collateral to secure the aforementioned long-term borrowings.

(14) Provisions

Balance at January 1, 2021 Additions Usage Spin-off Effect of change in exchange rate Balance at December 31, 2021 Less: current Noncurrent Balance at January 1, 2020 Additions Usage Effect of change in exchange rate Balance at December 31, 2020 Less: current Noncurrent	Warranties(i) $ 1,276,284 244,926 (463,218) (54,623) - 1,003,369 (323,462) $ 679,907 $ 1,266,081 218,207 (208,004) - 1,276,284 (496,784) $ 779,500	Litigation, claims and others 165,466 324,203 (33,606) - (2,243) 453,820 (453,820) - 206,544 - (32,065) (9,013) 165,466 (165,466) -	Total 1,441,750 569,129 (496,824) (54,623) (2,243) 1,457,189 (777,282) 679,907 1,472,625 218,207 (240,069) (9,013) 1,441,750 (662,250) 779,500

(i) The provisions for warranties were estimated based on historical experience of warranty claims rate associated with similar products and services. The Company expects most warranty claims will be made within two years from the date of the sale of the product.

(15) Employee Benefits

a. Defined benefit plans

Pursuant to the ROC Labor Standards Act, the Company has established a defined benefit pension plan covering their full-time employees in the ROC. This plan provides for retirement benefits to retiring employees based on years of service and the average salaries and wages for the six-month period before the employee’s retirement. The funding of this retirement plan by the Company is contributed monthly based on a certain percentage of employees’ total salaries and wages. The fund is deposited with Bank of Taiwan.

In 2020, the Company reached an agreement with part of its employees for terminating their defined benefit pension plans and to settle its defined benefit obligation by relevant regulations. A gain on the settlement amounting to $458,854 thousand was thereby recognized in the statement of comprehensive income. The full settlement was withdrawn from the pension fund, of which $1,193,962 thousand that has not been withdrawn as of December 31, 2020 was fully withdrawn in January 2021.

(Continued)

36

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

• (i) Reconciliation of the present value of defined benefit obligation and the fair value of plan assets for the Company.

Present value of defined benefit obligation Fair value of plan assets Net defined benefit asset (recognized in other noncurrent assets)	December 31, 2021 $ (152,728) 299,374 $ 146,646	December 31, 2020 (146,554) 256,878 110,324

• (ii) Movement in net defined benefit asset (liability)

Balance at January 1 Spin-off Service cost Interest cost Gain on settlement Expected return on plan assets Included in profit or loss Actuarial (loss) gain arising from: - demographic assumptions - financial assumptions - experience adjustment Return on plan assets excluding interest income Included in other comprehensive income Contributions paid by the employer Benefits paid Balance at December 31	Present value of defined benefit obligation 2021 2020 $ (146,554) (3,122,442) 2,330 - (4,032) (1,033) (572) (27,478) - 458,854 - - (4,604) 430,343 (1,759) - (16,648) (10,652) (7,263) 68,531 - - (25,670) 57,879 - - 21,770 2,487,666 21,770 2,487,666 $ (152,728) (146,554)	Fair value of	plan assets 2020 2,542,832 - - - - 22,377 22,377 - - - 82,339 82,339 96,996 (2,487,666) (2,390,670) 256,878	Net defined benefit asset (liability) 2021 2020 110,324 (579,610) 2,330 - (4,032) (1,033) (572) (27,478) - 458,854 1,002 22,377 (3,602) 452,720 (1,759) - (16,648) (10,652) (7,263) 68,531 47,363 82,339 21,693 140,218 15,901 96,996 - - 15,901 96,996 146,646 110,324	Net defined benefit asset (liability) 2021 2020 110,324 (579,610) 2,330 - (4,032) (1,033) (572) (27,478) - 458,854 1,002 22,377 (3,602) 452,720 (1,759) - (16,648) (10,652) (7,263) 68,531 47,363 82,339 21,693 140,218 15,901 96,996 - - 15,901 96,996 146,646 110,324
	2021 $ (146,554) 2,330 (4,032) (572) - - (4,604) (1,759) (16,648) (7,263) - (25,670) - 21,770 21,770 $ (152,728)	2021 256,878 - - - - 1,002 1,002 - - - 47,363 47,363 15,901 (21,770) (5,869) 299,374		2021 110,324 2,330 (4,032) (572) - 1,002 (3,602) (1,759) (16,648) (7,263) 47,363 21,693 15,901 - 15,901 146,646
					-
					(1,033) (27,478) 458,854 22,377
					452,720
					- (10,652) 68,531 82,339
					140,218
					96,996 -
					96,996
					110,324

(Continued)

37

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

(iii) Plan assets

Pursuant to the ROC Labor Standards Act, the Company contributes an amount based on a certain percentage of employees’ total salaries and wages paid every month to its pension fund (the “Fund”), which is administered by the Bureau of Labor Fund, Ministry of Labor and supervised by the employees’ pension plan committee (the “Committee”) and deposited in the Committee’ s name with Bank of Taiwan. Under the ROC Regulations for Revenues, Expenditures, Safeguard and Utilization of the Labor Retirement Fund, the minimum return on the plan assets should not be lower than the average interest rate on two year time deposits published by the local banks. The government is not only responsible for the determination of the investment strategies and policies, but also for any shortfall in the event that the rate of return is less than the required rate of return.

As of December 31, 2021 and 2020, the Fund deposited in the Committee’s name in the Bank of Taiwan amounted to $299,374 thousand and $1,450,840 thousand (including the un withdrawn balance aforementioned). Information on utilization of labor pension funds, including the yield rate of funds and the component of plan assets are available at the Bureau of Labor Funds, Ministry of Labor website.

• (iv) Present value of defined benefit obligation

• (a) Principal actuarial assumptions

Discount rate Rate of increase in future salary	December 31, 2021 December 31, 2020 0.65% 0.39% 4.00% 2.90%

The Company anticipates to make no contribution to the defined benefit plans in the next year starting from January 1, 2022.

As at December 31, 2021, the weighted-average duration of the defined benefit obligation was 15 years.

(b) Sensitivity analysis

Reasonably possible changes at December 31, 2021 and 2020 to one of the relevant actuarial assumptions, holding other assumptions constant, would have affected the defined benefit obligation by the amounts shown below.

Discount rate Rate of increase in future salary	December 31, 2021 Changes in assumptions + 0.25% -0.25% $ (5,495) 5,777 $ 5,573 (5,335)	December 31, 2020 Changes in assumptions +0.25% -0.25% (5,565) 5,854 5,693 (5,445)
	+ 0.25% $ (5,495) $ 5,573	+0.25% (5,565) 5,693

(Continued)

38

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

In practical, the relevant actuarial assumptions are correlated to each other. The approach to develop the sensitivity analysis as above is the same approach to recognize the net defined benefit asset (liability) in the balance sheet.

The approach to develop the sensitivity analysis and its relevant actuarial assumptions are the same as those in previous year.

b. Defined contribution plans

Commencing July 1, 2005, pursuant to the ROC Labor Pension Act (the “Act”), employees who elected to participate in the Act or joined the Company after July 1, 2005, are subject to a defined contribution plan under the Act. Under the defined contribution plan, the Company contributes monthly at a rate of no less than six percent of the employees’ monthly salaries and wages to the employee’ s individual pension fund account at the ROC Bureau of Labor Insurance.

The Company has set up defined contribution plan in accordance with the Act. For the years ended December 31, 2021 and 2020, $888,251 thousand and $866,143 thousand, respectively, of the pension costs under the pension plan to the ROC Bureau of the Labor Insurance.

• (16) Capital and Other Components of Equity

a. Common stock

The Company’s authorized common stock, with par value of $10 per share, both amounted to $100,000,000 thousand as at December 31, 2021 and 2020.

The Company’ s issued common stock, with par value of $10 per share, both amounted to $96,242,451 thousand as at December 31, 2021 and 2020.

As of December 31, 2021, the Company has issued 24,815 thousand ADSs, which represented 248,147 thousand shares of its common stock.

b. Capital surplus

The components of capital surplus were as follows:

The components of capital surplus were as follows:
From common stock From convertible bonds From others	December 31, 2021 $ 52,756,091 6,049,862 1,251,048 $ 60,057,001	December 31, 2020
		52,756,091 6,049,862 1,781,731
		60,587,684

(Continued)

39

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

According to the ROC Company Act, capital surplus, including premium from stock issuing and donations received, may be used to offset a deficit. When a company has no deficit, such capital surplus may be distributed by issuing common stock as stock dividends or by cash according to the proportion of shareholdings. Pursuant to the ROC Regulations Governing the Offering and Issuance of Securities by Securities Issuers, the total sum of capital surplus capitalized per annum shall not exceed 10 percent of the paid in capital.

c.

Retained earnings and dividend policy

In accordance with the Company’s Articles of Incorporation, distribution of earnings by way of cash dividends should be approved by the Company’s Board of Directors and reported to the Company’ s shareholders in its meeting. After payment of income taxes and offsetting accumulated deficits, the legal reserve shall be set aside until the accumulated legal reserve equals the Company’ s paid-in capital. In addition, a special reserve in accordance with applicable laws and regulations shall also be set aside or reversed. The remaining current-year earnings together with accumulated undistributed earnings from preceding years can be distributed according to relevant laws and the Company’s Articles of Incorporation.

Legal reserve may be used to offset a deficit. When the Company incurs no loss, it may distribute its legal reserve by issuing new shares or by cash in accordance with the proportion of shareholdings for the portion in excess of 25% of the paid-in capital.

The Company’s dividend policy is to pay dividends from surplus considering factors such as the Company’s current and future investment environment, cash requirements, domestic and overseas competitive conditions and capital budget requirements, while taking into account shareholders’ interest, maintenance of balanced dividend and the Company’ s long-term financial plan. If the current-year retained earnings available for distribution reach 2% of the paid-in capital of the Company, dividend to be distributed shall be no less than 20% of the current-year retained earnings available for distribution. If the current-year retained earnings available for distribution do not reach 2% of the paid-in capital of the Company, the Company may decide not to distribute dividend. The cash portion of the dividend, which may be in the form of cash and stock, shall not be less than 10% of the total dividend distributed during the year. The dividend distribution ratio aforementioned could be adjusted after taking into consideration factors such as finance, business and operations, etc.

Pursuant to relevant laws or regulations or as requested by the local authority, total net debit balance of the other components of equity shall be set aside from current earnings as special reserve, and not for distribution. Subsequent decrease pertaining to items that are accounted for as a reduction to the other components of equity shall be reclassified from special reserve to undistributed earnings.

The Company’s annual shareholders’ meeting held on June 17, 2020 resolved to set aside a special reserve of $1,157,614 thousand and not to distribute dividends for 2019.

The aforementioned appropriation of earnings for 2019 was consistent with the resolutions of the Board of Directors’ meeting held on March 20, 2020.

(Continued)

40

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

The Company’ s appropriation of earnings for 2020 by way of cash dividends has been approved in the Board of Directors’ meeting held on March 16, 2021. The appropriation of 2020 earnings by other ways has been approved in the annual shareholders’ meeting held on August 19,2021. Details of distribution were as follows:

Legal reserve Special reserve Cash dividends to shareholders	Appropriation of earnings Dividends per share (NT$) $ 735,456 1,264,919 2,850,967 0.30 $ 4,851,342

The aforementioned appropriation of earnings for 2020 was consistent with the resolutions of the Board of Directors’ meeting held on March 16, 2021.

Information on the approval of Board of Directors and shareholders for the Company’ s appropriations of earnings are available at the Market Observation Post System website.

d. Treasury shares

The Company repurchased 125,000 thousand shares as treasury shares transferred to employees in accordance with Securities and Exchange Act requirements. The related information on treasury share transactions was as follows (shares in thousands):

For the year ended December 31, 2021

For the year ended December 31, 2021	For the year ended December 31, 2021	For the year ended December 31, 2021	For the year ended December 31, 2021
Reason for reacquisition Number of shares, Beginning of Year Additions Reductions Number of shares, End of Year Transferring to employees 125,000 - (70,801) 54,199 For the year ended December 31, 2020
Reason for reacquisition Transferring to employees	Number of shares, Beginning of Year 125,000	Additions -	Reductions Number of shares, End of Year - 125,000

Refer to Note 6(17) for information on employee treasury shares plan for 2021. A total of 70,801 thousand shares were transferred with total costs for treasury shares of $574,195 thousand and cost per share of $8.11.

Pursuant to the Securities and Exchange Act, the number of shares repurchased shall not exceed 10 percent of the number of the Company’s issued and outstanding shares, and the total amount repurchased shall not exceed the sum of the Company’ s retained earnings, share premium, and realized capital surplus. Also, the shares repurchased for transferring to employees shall be transferred within five years from the date of reacquisition and those shares not transferred within the five-year period are to be retired.

(Continued)

41

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

In accordance with the Securities and Exchange Act, treasury shares held by the Company shall not be pledged, and do not hold any shareholder rights before their transfer.

• e. Other components of equity

Balance at January 1, 2021 Foreign operations – foreign currency translation differences Net change in fair value of financial assets at FVTOCI Equity-accounted investees – share of other comprehensive income Cumulative unrealized gain of equity instruments transferred to retained earnings due to disposal Realized loss on sales of securities reclassified to profit or loss Acquisition of interest in subsidiary Related tax Balance at December 31, 2021 Balance at January 1, 2020 Foreign operations – foreign currency translation differences Net change in fair value of financial assets at FVTOCI Equity-accounted investees – share of other comprehensive income Cumulative unrealized gain of equity instruments transferred to retained earnings due to disposal Related tax Balance at December 31, 2020	Cumulative translation differences $ (3,206,520) (1,765,440) - 464,648 - 58,645 (753,444) 328,538 $ (4,873,573) $ (3,129,982) (3,049,722) - 2,961,666 - 11,518 $ (3,206,520)	Unrealized gains (losses) on financial assets at FVTOCI (63,783) - (25,518) 245,042 (25,350) - - - 130,391 1,124,598 - 2,564,513 112,269 (3,865,163) - (63,783)	Total (3,270,303) (1,765,440) (25,518) 709,690 (25,350) 58,645 (753,444) 328,538 (4,743,182) (2,005,384) (3,049,722) 2,564,513 3,073,935 (3,865,163) 11,518 (3,270,303)

(Continued)

42

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

• (17) Share-based Payments

• a. Employee treasury shares plan

AUO granted the treasury shares to eligible employees, including those of AUO and its subsidiaries in accordance with the relevant plan. The key terms and conditions related to the grants were disclosed as follows:

Grant date Total shares granted Contract term Grant object Vesting conditions	Plan 1 Plan 2 February 18, 2021 August 16, 2021~August 24, 2021 3,978 thousand shares 66,823 thousand shares - - Employees of the Company and its subsidiaries Employees of the Company and its subsidiaries Vest immediately Vest immediately

The fair value of the share-based payments granted by AUO was measured at the date of grant using the Black-Scholes option pricing model. For the year ended December 31, 2021, the related compensation costs recognized for the abovementioned plan amounted $793,312 thousand.

b. Employee restricted stock plan

As of December 31, 2021, the share-based payment rewards plan that AUO Digitech Holding Limited (ADTHLD), a subsidiary of AUO, granted to employees of AUO and its subsidiaries was totaled 1,250,000 units. Employees are granted restricted stocks without consideration, and are eligible to vest 100% of 250,000 units when they provide two years of service subsequent to the grant date. Further employees who provide two years and five years of service, respectively, subsequent to the grant date as well as fulfill specific performance conditions are eligible to vest 40% and 60% of 1,000,000 units, respectively.

The special shares of AUO Digitech (CAYMAN) Limited (ADTCM) without voting right which are held by AUO are the subject for the execution of the aforementioned plan. According to the relevant plan, one special share without voting right of ADTCM represents one common share right of ADTHLD. As of December 31, 2021, the carrying amount recognized for abovementioned employee restricted stock plan liabilities amounted to $4,418 thousand.

(Continued)

43

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

• (18) Revenue from Contracts with Customers

• a. Disaggregation of revenue

Primary geographical markets: PRC (including Hong Kong) Taiwan Singapore Japan Others Major products: Products for Televisions Products for Monitors Products for Mobile PCs and Devices Products for Automotive Solutions Products for PID and General Display Others(i) Major customers: Customer A Customer B Others (individually not greater than 10%)		For	the years ended December 31,	the years ended December 31,	the years ended December 31,
		2021	Total segments 96,581,397 96,652,820 54,478,777 15,139,565 68,377,996 331,230,555 85,242,039 63,811,427 110,622,052 28,048,600 28,837,318 14,669,119 331,230,555 34,674,572 33,310,649 263,245,334 331,230,555		2020
	Display segment $ 96,574,654 89,656,802 54,476,932 15,123,688 68,360,127 $ 324,192,203 $ 85,242,039 63,811,427 110,622,052 28,048,600 28,837,318 7,630,767 $ 324,192,203 $ 34,674,572 33,310,649 256,206,982 $ 324,192,203	Energy segment 6,743 6,996,018 1,845 15,877 17,869 7,038,352 - - - - - 7,038,352 7,038,352 - - 7,038,352 7,038,352		Display segment 86,452,733 82,687,514 41,957,591 18,582,706 21,318,155 250,998,699 69,879,294 41,888,242 77,464,323 21,302,128 35,545,592 4,919,120 250,998,699 32,117,615 19,742,464 199,138,620 250,998,699	Energy segment 5,925 4,936,487 484 70,223 77,527 5,090,646 - - - - - 5,090,646 5,090,646 - - 5,090,646 5,090,646	Total segments
						86,458,658 87,624,001 41,958,075 18,652,929 21,395,682
						256,089,345
						69,879,294 41,888,242 77,464,323 21,302,128 35,545,592 10,009,766
						256,089,345
						32,117,615 19,742,464 204,229,266
						256,089,345

(i) Including sales of solar-related products, raw materials and components and from products for other applications and service charges.

b. Contract balances

Contract assets－current (recorded in other current financial assets)	December 31, 2021 $ 1,163,174	December 31, 2020
		51,007

(Continued)

44

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

Contract liabilities－current (recorded in other current liabilities) Contract liabilities－noncurrent	December 31, 2021 $ 3,051,364 8,739,846 $ 11,791,210	December 31, 2020
		287,794 -
		287,794

The amounts of revenue recognized for the years ended December 31, 2021 and 2020 that previously included in the contract liability balance at the beginning of the year were $227,110 thousand and $465,933 thousand, respectively. Additionally, in the first quarter of 2021, AUO entered into long-term sales agreements with customers and has received payments in advance. Under the agreements, the customers should fulfill the requirement of minimum order quantity and AUO should fulfill the obligation of relevant delivery quantity as agreed. AUO accounted for such obligation as contract liabilities.

(19) Remuneration to Employees and Directors

According to the Company’s Articles of Incorporation, the Company should distribute remuneration to employees and directors no less than 5% and no more than 1% of annual profits before income tax, respectively, after offsetting accumulated deficits, if any. Only employees, including employees of affiliate companies that meet certain conditions are entitled to the abovementioned remuneration which to be distributed in stock or cash. The said conditions and distribution method are decided by Board of Directors or the personnel authorized by Board of Directors.

The Company accrued remuneration to employees based on the profit before income tax excluding the remuneration to employees and directors for the period, multiplied by the percentage resolved by Board of Directors. For the years ended December 31, 2021 and 2020, the Company estimated the remuneration to employees amounting to $6,339,435 thousand and $253,493 thousand, respectively. Remuneration to directors was estimated based on the amount expected to pay and recognized together with the remuneration to employees as cost of sales or operating expenses. If remuneration to employees is resolved to be distributed in stock, the number of shares is determined by dividing the amount of remuneration by the closing price of the shares (ignoring ex dividend effect) on the day preceding the Board of Directors’ meeting. If there is a change in the proposed amounts after the annual financial statements are authorized for issue, the differences are accounted for as a change in accounting estimate and adjusted prospectively to next year’s profit or loss.

Remuneration to employees and directors for 2020 in the amounts of $253,493 thousand and $8,275 thousand, respectively, in cash for payment had been approved in the meeting of Board of Directors held on March 16, 2021. The aforementioned approved amounts are the same as the amounts charged against earnings of 2020.

The information about the Company’s remuneration to employees and directors is available at the Market Observation Post System website.

(Continued)

45

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

(20) Additional Information of Expenses by Nature

Employee benefits expenses: Salaries and wages Labor and health insurances Retirement benefits Compensation to directors Other employee benefits Depreciation Amortization		For the years ended December 31,	For the years ended December 31,	For the years ended December 31,	For the years ended December 31,
		2021	Total 29,268,815 1,780,744 891,853 244,565 2,204,824 22,394,148 170,775		2020
	Recognized in cost of sales $20,540,303 1,330,944 632,935 - 1,171,054 19,540,231 170,775	Recognized in operating expenses 8,728,512 449,800 258,918 244,565 1,033,770 2,853,917 -		Recognized in cost of sales 14,077,575 1,170,678 296,886 - 1,153,079 20,674,699 245,311	Recognized in operating expenses Total 5,490,687 19,568,262 367,424 1,538,102 116,537 413,423 42,812 42,812 234,066 1,387,145 3,112,597 23,787,296 - 245,311

Additional information on the number of the Company’ s employees and the average employee benefit expenses of the Company for the years ended December 31, 2021 and 2020 were as follows:

		For the years	ended
		December	31,
		2021	2020
Number of employees		20,322	20,616
Number of non-employee directors		6	7
Average employee benefit expenses	$	1,681	1,112
Average salaries expenses	$	1,441	950
Average salary expense adjustment		52%	3%
Remuneration to supervisor	$	-	-

The Company’ s compensation policies (including directors, managers and employees) were as follows:

• a. Directors: compensation for directors have been authorized for distribution by the Board of Directors pursuant to the Company's Articles of Association, based on individual Director's level of participation and contributions to the Company operations, and have been paid pursuant to the “Compensation Policy to the Directors and Functional Committee Members” which is in reference to domestic and overseas industry standards. When earnings are present, the Board of Directors will resolve on the amount of Directors’ remunerations based on the Company's Articles of Association.

(Continued)

46

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

• b. Managers and employees:

  • (i) The Company provides diversified and competitive overall remuneration and career development opportunities. Apart from basic salary (including principal salary, meal allowance, etc.), various allowances and rewards, such as work allowances, duty allowances, performance bonuses, incentive bonuses and remuneration to employees based on annual profit, are designed for difference job nature and reward purpose.

  • (ii) The Company participates in international market salary surveys every year, and makes salary adjustment based on the market level of each job and individual performance to sustain our market competitiveness. Under the premise of enhancing the Company's overall operations and performance from team work and individual, the Company designs various short-term or long-term reward plans and profit sharing with employees to achieve the purpose of talent attraction, retention, motivation and programmatic cultivation of high-quality talents.

  • (iii) The remuneration for the managers is linked to the Company’s operating performance and job duties. While designing the salary package, the Company refers to the salary market level and cooperates with long-term external professional consultants. According to the laws, the remuneration for the managers is proposed by the Remuneration Committee and approved by the Board of Directors. It is established to sustain shareholders’ long-term value and build up a management team with entrepreneurial spirit.

  • (iv) Salaries for employees are determined by the factors such as the employees’ educational background, professional knowledge and technology, and professional years of experience. Employees would not be discriminated regardless of their gender, race, religious beliefs, political stance, marital status and unions they participate.

• (21) Non-Operating Income and Expenses

• a. Interest income

Interest income on bank deposits Others Other income Rental income, net Dividend income Grants and others	For the years ended December 31,	For the years ended December 31,
	2021 2020 $ 142,182 141,156 17,412 17,809 $ 159,594 158,965 For the years ended December 31,	2020
		141,156 17,809
		158,965
		2020
		317,694 251,423 326,623
		895,740

• b. Other income

(Continued)

47

AU OPTRONICS CORP.

Notes to the Parent Company Only Financial Statements

c. Other gains and losses

Foreign exchange losses, net Gains (losses) on valuation of financial instruments at FVTPL, net Gains on disposals of investments and financial assets, net Gains on disposals of property, plant and equipment, net Impairment losses on assets Gains (losses) on litigation and others	For the years ended December 31, 2021 2020 $ (52,341) (632,825) (121,873) 530,999 496,461 - 782,257 21,322 (1,017,725) (36,788) (293,614) (64,823) $ (206,835) (182,115)
	2021 $ (52,341) (121,873) 496,461 782,257 (1,017,725) (293,614) $ (206,835)

d. Finance costs

Interest expense on bank borrowings Interest expense on lease liabilities Other interest expense Finance expense	For the years ended December 31,	For the years ended December 31,
	2021 $ 1,210,094 158,637 3,200 75,228 $ 1,447,159	2020
		1,536,020 154,795 8,761 71,697
		1,771,273

(22) Income Taxes

• a. Income tax expense (benefit)

The components of income tax expense (benefit) for the years ended December 31, 2021 and 2020 were as follows:

Current income tax expense (benefit): Current year Adjustment to prior years Deferred tax expense (benefit): Temporary differences	For the years ended December 31, 2021 2020 $ 62,580 - 7 (4) 62,587 (4) 1,042,284 (879,735) $ 1,104,871 (879,739)
	2021 $ 62,580 7 62,587 1,042,284 $ 1,104,871

(Continued)

48

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

Income taxes expense (benefit) recognized directly in other comprehensive income for the years ended December 31, 2021 and 2020 were as follows:

Items that will never be reclassified to profit or loss: Remeasurement of defined benefit obligations Items that are or may be reclassified subsequently to profit or loss: Foreign operations – foreign currency translation differences Equity-accounted investees – share of other comprehensive income	For the years ended December 31, 2021 2020 $ 4,664 28,043 $ (353,088) (609,944) 24,550 598,426 $ (328,538) (11,518)
	2021 $ 4,664 $ (353,088) 24,550 $ (328,538)

Reconciliation of the expected income tax expense (benefit) calculated based on the ROC statutory income tax rate compared with the actual income tax expense as reported in the statements of comprehensive income for the years ended December 31, 2021 and 2020, was as follows:

Income tax expense at statutory tax rate Tax on undistributed earnings, net Net of non-taxable income from domestic investments and non-deductible expense Change of unrecognized deductible temporary differences Adjustments to prior year Income tax expense (benefit)	For the years ended December 31,	For the years ended December 31,
	2021 $ 12,487,100 62,580 (1,515,292) (9,929,524) 7 $ 1,104,871	2020
		499,317 - 49,957 (1,429,009) (4)
		(879,739)

b. Deferred tax assets and liabilities

Deferred tax assets have not been recognized in respect of the following items.

Deductible temporary differences Unused tax losses carryforwards	December 31, 2021 $ 289,192 5,154,251 $ 5,443,443	December 31, 2020
		274,984 14,167,214
		14,442,198

(Continued)

49

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

Under the ROC tax laws, approved tax losses can be carried forward for 10 years to offset future taxable profits.

As of December 31, 2021, the expiration period for abovementioned unrecognized deferred tax assets of unused tax losses carryforwards were as follows:

Year of assessment 2015(assessed) 2016(assessed) 2019 (assessed) 2020(filed)	Unrecognized deferred tax assets Expiration in year $ 1,389,860 2025 20,551 2026 3,594,747 2029 149,093 2030 $ 5,154,251

As of December 31, 2021 and 2020, the aggregate taxable temporary differences associated with investments in subsidiaries not recognized as deferred tax liabilities amounted to nil and $832,350 thousand, respectively.

The components of and changes in deferred tax assets and liabilities were as follows:

Tax losses carryforwards Unrealized loss and expenses Inventories write- down Accumulated amortization of goodwill in accordance with local tax laws Remeasurement of defined benefit plans Foreign investment losses(gains) Others	Deferred tax assets December 31, 2021 December 31, 2020 $ 1,210,727 2,120,783 189,749 255,257 696,184 523,594 - - 124,509 129,173 - - 3,307,810 2,221,352 $ 5,528,979 5,250,159	Deferred tax liabilities December 31, 2021 December 31, 2020 - - - - - - (2,024,091) (2,213,429) - - (1,168,811) - (138,901) (121,469) (3,331,803) (2,334,898)	Total December 31, 2021 December 31, 2020 1,210,727 2,120,783 189,749 255,257 696,184 523,594 (2,024,091) (2,213,429) 124,509 129,173 (1,168,811) - 3,168,909 2,099,883 2,197,176 2,915,261
	December 31, 2021 $ 1,210,727 189,749 696,184 - 124,509 - 3,307,810 $ 5,528,979	December 31, 2021 - - - (2,024,091) - (1,168,811) (138,901) (3,331,803)

(Continued)

50

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

Deferred tax assets (liabilities): Tax losses carryforwards Unrealized loss and expenses Inventories write- down Accumulated amortization of goodwill in accordance with local tax laws Remeasurement of defined benefit plans Foreign investment losses (gains) Others	January 1, 2020 $ 2,120,783 161,146 857,255 (2,213,429) 157,216 - 969,080 $ 2,052,051	Recognized in profit or loss - 94,111 (333,661) - - - 1,119,285 879,735	Recognized in other comprehensive income - - - - (28,043) - 11,518 (16,525)	December 31, 2020 2,120,783 255,257 523,594 (2,213,429) 129,173 - 2,099,883 2,915,261	Spin-off - (10,925) (292) - - - 11,542 325	Recognized in profit or loss (910,056) (54,583) 172,882 189,338 - (1,168,811) 728,946 (1,042,284)	Recognized in other comprehensive income - - - - (4,664) - 328,538 323,874	December 31, 2021 1,210,727 189,749 696,184 (2,024,091) 124,509 (1,168,811) 3,168,909 2,197,176

c. Assessments by the tax authorities

As of December 31, 2021, the tax authorities have completed the examination of income tax returns of the Company through 2019.

• (23) Earnings per Share

Basic earnings per share Profit attributable to shareholders Weighted-average number of common shares outstanding during the year Basic earnings per share (NT$) Diluted earnings per share Profit attributable to shareholders Weighted-average number of common shares outstanding during the year Effect of employee remuneration in stock Diluted earnings per share (NT$)	For the years ended December 31,	For the years ended December 31,
	2021 $ 61,330,628 9,522,200 $ 6.44 $ 61,330,628 9,522,200 279,624 9,801,824 $ 6.26	2020
		3,376,324
		9,499,245
		0.36
		3,376,324
		9,499,245 18,107
		9,517,352
		0.35

(Continued)

51

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

(24) Cash Flow Information

The reconciliation of liabilities to cash flows arising from financing activities was as follows:

Balance at January 1, 2021 Cash flows Non-cash changes: Deductions Changes in exchange rate and others Balance at December 31, 2021 Balance at January 1, 2020 Cash flows Non-cash changes: Deductions Changes in exchange rate and others Balance at December 31, 2020	Long-term borrowings (including current installments) $ 95,639,518 (55,067,500) - 75,227 $ 40,647,245 $ 85,966,110 9,606,850 - 66,558 $ 95,639,518	Guarantee deposits 805,231 (51,290) - (72,582) 681,359 728,087 51,000 - 26,144 805,231	Lease liabilities 8,932,952 (390,835) (10,131) - 8,531,986 9,425,575 (390,812) (69,426) (32,385) 8,932,952	Total liabilities from financing activities 105,377,701 (55,509,625) (10,131) 2,645
				49,860,590
				96,119,772 9,267,038 (69,426) 60,317
				105,377,701

(25) Financial Instruments

• a. Fair value and carrying amount

The carrying amounts of the Company’ s current non-derivative financial instruments, including financial assets and financial liabilities at amortized cost, were considered to approximate their fair value due to their short-term nature. This methodology applies to cash and cash equivalents, receivables or payables (including related parties) and other current financial assets.

Disclosures of fair value are not required for the financial instruments abovementioned and lease liabilities. Other than those, the carrying amount and fair value of other financial instruments of the Company as of December 31, 2021 and 2020 were as follows:

Financial assets: Financial assets at FVTPL: Financial assets mandatorily measured at FVTPL Financial assets at FVTOCI Financial assets at amortized cost: Domestic time deposits Refundable deposits	December 31, 2021 Carrying Amount Fair Value $ 130,434 130,434 65,989 65,989 10,000,000 10,000,000 922,576 922,576	December 31, 2020
	Carrying Amount $ 130,434 65,989 10,000,000 922,576	Carrying Amount Fair Value 21,361 21,361 - - - - 381,528 381,528

(Continued)

52

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

Financial liabilities: Financial liabilities at FVTPL: Financial liabilities held for trading Financial liabilities at amortized cost: Long-term borrowings (including current installments) Guarantee deposits Long-term payables (including current installments)	December 31, 2021 Carrying Amount Fair Value 39,294 39,294 40,647,245 40,647,245 681,359 681,359 1,404,990 1,404,990	December 31, 2020
	Carrying Amount 39,294 40,647,245 681,359 1,404,990	Carrying Amount Fair Value 135,420 135,420 95,639,518 95,639,518 805,231 805,231 309,900 309,900

• b. Valuation techniques and assumptions applied in fair value measurement

The fair values of financial assets and financial liabilities with standard terms and conditions and traded in active markets are determined with reference to quoted market prices. The fair values of other financial assets and financial liabilities without quoted market prices are estimated using valuation approach. The estimates and assumptions used are the same as those used by market participants in the pricing of financial instruments.

Fair value of foreign currency forward contract is measured based on the maturity date of each contract with quoted spot rate and quoted swap points from Reuters quote system.

For domestic time deposits, their fair value approximate to their carrying amount.

Fair value of long-term payable, which approximates to its carrying value -is determined by discounting the expected cash flows at a market interest rate.

The refundable deposits and guarantee deposits are based on carrying amount as there is no fixed maturity.

The fair value of floating-rate long-term borrowings approximates to their carrying value.

• c.

• Fair value measurements recognized in the balance sheets

The Company determines fair value based on assumptions that market participants would use in pricing an asset or a liability in the principal market. When considering market participant assumptions in fair value measurements, the following fair value hierarchy distinguishes between observable and unobservable inputs, which are categorized in one of the following levels:

• (i) Level 1 inputs: Unadjusted quoted prices for identical assets or liabilities in active markets.

• (ii) Level 2 inputs: Other than quoted prices included within Level 1, inputs are observable for the asset or liability, either directly (i.e. as prices) or indirectly (i.e. derived from prices).

(Continued)

53

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

• (iii) Level 3 inputs: Derived from valuation techniques that include inputs for the asset or liability that are not based on observable market data (unobservable inputs).

The fair value measurement level of an asset or a liability within their fair value hierarchy is based on the lowest level of any input that is significant to the fair value measurement. The Company uses valuation techniques that maximize the use of observable inputs and minimize the use of unobservable inputs.

December 31, 2021 Financial assets at FVTPL: Financial assets mandatorily measured at FVTPL Financial assets at FVTOCI Financial assets at amortized cost: Domestic time deposits Financial liabilities at FVTPL: Financial liabilities held for trading Financial liabilities at amortized cost: Long-term payables (including current installments) December 31, 2020 Financial assets at FVTPL: Financial assets mandatorily measured at FVTPL Financial liabilities at FVTPL: Financial liabilities held for trading Financial liabilities at amortized cost: Long-term payables (including current installments)	Level 1 $ - 65,989 - - - - - -	Level 2 130,434 - 10,000,000 39,294 1,404,990 21,361 135,420 309,900	Level 3 Total - 130,434 - 65,989 - 10,000,000 - 39,294 - 1,404,990 - 21,361 - 135,420 - 309,900

There were no transfers between Level 1 and 2 for the years ended December 31, 2021 and 2020.

• (26) Financial Risk Management

• a. Risk management framework

The managerial officers of related divisions are appointed to review, control, trace and monitor the strategic risks, financial risks and operational risks faced by the Company. The managerial officers report to executive officers the progress of risk controls from time to time and, if necessary, report to the board of directors, depending on the extent of impact of risks.

(Continued)

54

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

• b. Financial risk information

Hereinafter discloses information about the Company’ s exposure to variable risks, and the goals, policies and procedures of the Company’s risk measurement and risk management.

The Company is exposed to the following risks due to usage of financial instruments:

(i) Credit risk

Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company’s exposures to credit risk are mainly from:

• (a) The carrying amount of financial assets recognized in the balance sheets.

• (b) The amount of contingent liabilities as a result from the Company providing financial guarantee to its customers.

The Company’ s potential credit risk is derived primarily from cash in bank, cash equivalents and trade receivables. The Company deposits its cash with various reputable financial institutions of high credit quality. There should be no major concerns for the performance capability of trading counterparts. Management performs periodic evaluations of the relative credit standing of these financial institutions and limits the amount of credit exposure with any one institution. Management believes that there is a limited concentration of credit risk in cash and cash equivalent investments.

The majority of the Company’ s customers are in high technology industries. Management continuously evaluates and controls the credit quality, credit limit and financial strength of its customers to ensure any overdue receivables are taken necessary procedures. The Company also flexibly makes use of advance receipt, accounts receivable factoring and credit insurance as credit enhancement instruments. If necessary, the Company will request collaterals or assurance from its customers in order to reduce the credit risk from particular customers.

Additionally, on the reporting date, the Company reviews the recoverability of its receivables to provide appropriate valuation allowances. Consequently, management believes there is a limited concentration of its credit risk.

For the years ended December 31, 2021 and 2020, the Company’s five largest customers accounted for 41.3% and 41.8%, respectively, of the Company’s net revenue. There is no other significant concentration of credit risk.

Refer to Note 6(5) for expected credit loss analysis of accounts receivable and the movement in the loss allowance of accounts receivable.

(Continued)

55

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

For credit of guarantee, the Company’s policy is to provide financial guarantees only to subsidiaries. Refer to Note 13(1)b. for information about endorsements or guarantees provided by the Company to its subsidiaries as of December 31, 2021.

(ii) Liquidity risk

Liquidity risk is the risk that the Company has no sufficient working capital and unused credit facilities to meet its obligations associated with matured financial liabilities, that may resulting from an economic downturn or uneven demand and supply in the market and cause a significant decrease in product selling prices and market demands.

Liquidity risk of the Company is monitored through its corporate treasury department which tracks the development of the actual cash flow position for the Company and uses input from a number of sources in order to forecast the overall liquidity position both on a short and long term basis. Corporate treasury invests surplus cash in money market deposits with appropriate maturities to ensure sufficient liquidity is available to meet liabilities when due, without incurring unacceptable losses or risking damage to the Company’s reputation.

The following, except for payables (including related parties) and equipment and construction payable, are the contractual maturities of other financial liabilities. The amounts include estimated interest payments but exclude the impact of netting agreements.

agreements.
Contractual cash flows December 31, 2021 Non-derivative financial liabilities Long-term borrowings (including current installments) $ 42,100,893 Long-term payables (including current installments) 1,404,990 Guarantee deposits 681,359 Derivative financial instruments Foreign currency forward contracts－inflows (25,782,939) Foreign currency forward contracts－outflows 25,691,340 $ 44,095,643	2022.1.1~ 2022.12.31 12,762,796 467,460 - (25,782,939) 25,691,340 13,138,657	2023.1.1~ 2024.12.31 23,127,504 625,020 - - - 23,752,524	2025.1.1~ 2026.12.31 6,210,593 312,510 - - - 6,523,103	2027 and thereafter
				- - 681,359 - -
				681,359

(Continued)

56

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

Contractual cash flows December 31, 2020 Non-derivative financial liabilities Long-term borrowings (including current installments) $ 99,192,346 Long-term payables (including current installments) 309,900 Guarantee deposits 805,231 Derivative financial instruments Foreign currency forward contracts－inflows (18,035,672) Foreign currency forward contracts－outflows 18,152,046 $ 100,423,851	2021.1.1~ 2021.12.31 12,648,823 154,950 - (18,035,672) 18,152,046 12,920,147	2022.1.1~ 2023.12.31 60,145,458 154,950 - - - 60,300,408	2024.1.1~ 2025.12.31 25,235,659 - - - - 25,235,659	2026 and thereafter
				1,162,406 - 805,231 - -
				1,967,637

The Company is not expecting that the cash flows included in the maturity analysis could occur significantly earlier or at significantly different amounts.

As at December 31, 2021, the management believes the Company’ s existing unused credit facilities under its existing loan agreements, together with net cash flows expected to be generated from its operating activities, will be sufficient for the Company to fulfill its payment obligations. Therefore, management believes that the Company does not have significant liquidity risk.

(iii) Market risk

Market risk is the risk that changes in market prices, such as foreign exchange rates, interest rates and equity prices, which will affect the Company’s income or the value of its holdings of financial instruments. The objective of market risk management is to manage and control market risk exposures within acceptable range.

The Company buys and sells derivatives, and also incurs financial assets and liabilities, in order to manage market risks. All such transactions are executed in accordance with the Company’ s handling procedures for conducting derivative transactions, and also monitored by internal audit department.

(a) Currency risk

The Company is exposed to currency risk on foreign currency denominated financial assets and liabilities arising from operating, financing and investing activities such that the Company uses forward exchange contracts to hedge its currency risk. Gains and losses derived from the foreign currency fluctuations on underlying assets and liabilities are likely to offset. However, transactions of derivative financial instruments help minimize the impact of foreign currency fluctuations, but the risk cannot be fully eliminated.

(Continued)

57

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

The Company periodically examines portions exposed to currency risks for individual asset and liability denominated in foreign currency and uses forward contracts as hedging instruments to hedge positions exposed to risks. The contracts have maturity dates that do not exceed one year, and do not meet the criteria for hedge accounting.

I. Exposure of currency risk

The Company’s significant exposure to foreign currency risk was as follows:

December 31, 2021 Foreign currency amounts Exchange rate NTD Financial assets Monetary items USD $ 2,360,707 27.6880 65,363,255 JPY 2,330,699 0.2409 561,465 EUR 34,030 31.4203 1,069,233 Non-monetary items USD 2,478,144 27.6880 68,614,851 Financial liabilities Monetary items USD 1,715,893 27.6880 47,509,645 JPY 19,876,946 0.2409 4,788,356 EUR 2,033 31.4203 63,877	December 31, 2020	December 31, 2020
	Foreign currency amounts 1,891,983 9,691,657 31,465 1,971,109 1,390,500 20,124,348 3,472	Exchange rate NTD 28.5070 53,934,759 0.2763 2,677,805 35.0494 1,102,829 28.5070 56,190,404 28.5070 39,638,984 0.2763 5,560,357 35.0494 121,692

II. Sensitivity analysis

The Company’ s exposure to foreign currency risk arises mainly from the translation of the foreign currency exchange gains and losses on cash and cash equivalents, trade receivables and trade payables that are denominated in foreign currency. Depreciation or appreciation of the NTD by 1% against the USD, EUR and JPY at December 31, 2021 and 2020, while all other variables were remained constant, would have increased or decreased the net profit before tax for the years ended December 31, 2021 and 2020 as follows:

1% of depreciation 1% of appreciation	For the years ended December 31, 2021 2020 $ 146,321 123,944 (146,321) (123,944)

(Continued)

58

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

III. Foreign exchange gain (loss) on monetary items

With varieties of functional currencies within the Company, the Company disclosed foreign exchange gain (loss) on monetary items in aggregate. The aggregate of realized and unrealized foreign exchange losses for the years ended December 31, 2021 and 2020 were $52,341 thousand and $632,825 thousand, respectively.

(b) Interest rate risk

The Company’s exposure to changes in interest rates is mainly from floating-rate long-term debt obligations. Any change in interest rates will cause the effective interest rates of long-term borrowings to change and thus cause the future cash flows to fluctuate over time. The Company will, depending on the market condition, enter into and designate interest rate swaps as hedges of the variability in cash flows attributable to interest rate risk.

Assuming the amount of floating-rate debts at the end of the reporting period had been outstanding for the entire year and all other variables were remained constant, an increase or a decrease in the interest rate by 0.25% would have resulted in a decrease or an increase in the net profit before tax for the years ended December 31, 2021 and 2020 by $102,625 thousand and $239,844 thousand, respectively.

(c) Equity price risk

See Note 6(3) for disclosure of equity price risk analysis.

(27) Capital Management

Through clear understanding and managing of significant changes in external environment, related industry characteristics, and corporate growth plan, the Company manages its capital structure to ensure it has sufficient financial resources to sustain proper liquidity, to invest in capital expenditures and research and development expenses, to repay debts and to distribute dividends in accordance to its plan. The management pursues the most suitable capital structure by monitoring and maintaining proper financial ratios as below. The Company aims to enhance the returns of its shareholders through achieving an optimized debt-to-equity ratio from time to time.

Long-term borrowings (including current installments) Total liabilities Total equity Debt-to-equity ratio Net debt-to-equity ratio(i)	December 31
	2021 2020 $ 40,647,245 95,639,518 153,816,495 181,195,885 231,787,040 182,804,691 % 66 % 99 % 2 % 22

(i) Net debt-to-equity ratio is defined as long-term borrowings less cash and cash equivalents and divided by total equity.

(Continued)

59

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

7. Related-party Transactions

(1) Name and relationship of related parties

The following is a summary of subsidiaries and related parties that have had transactions with the Company during the periods presented in the parent company only financial statements.

	Relationship with the
Name of related party	Company
AUO (L) Corp. (“AUOLB”, formerly AU Optronics (L) Corp.	Subsidiary
(“AULB”))
Konly	Subsidiary
Ronly Venture Corp. (“Ronly”)	Subsidiary
Darwin Precisions Corporation (“DPTW”)	Subsidiary
AUO Crystal Corp. (“ACTW”)	Subsidiary
ADP	Subsidiary
AUO Digitech Taiwan Inc. (“ADTTW”)	Subsidiary
Jector Digital Corporation (“Jector”)	Subsidiary
Space Money Inc. (“S4M”)	Subsidiary
Da Ping Green Energy Corporation (“DPGE”)	Subsidiary
AUO Health Corporation (“AHTW”)	Subsidiary
AUO Envirotech Inc. (“AETTW”, formerly U Fresh Technology Inc.	Subsidiary
(“UTI”))
SREC	Subsidiary
Evergen Power Corporation (“EGPC”)	Subsidiary
Sungen Power Corporation(“(SGPC”)	Subsidiary
AUO Corporation America (“AUOUS”, formerly AU Optronics	Subsidiary
Corporation America (“AUUS”))
AUO Corporation Japan (“AUOJP”, formerly AU Optronics	Subsidiary
Corporation Japan (“AUJP”))
AUO Europe B.V. (“AUONL”, formerly AU Optronics Europe B.V.	Subsidiary
(“AUNL”))
AU Optronics Korea Ltd. (“AUKR”)	Subsidiary
AUO Singapore Pte. Ltd. (“AUOSG”, formerly AU Optronics	Subsidiary
Singapore Pte. Ltd. (“AUSG”))
AU Optronics (Czech) s.r.o. (“AUCZ”)	Subsidiary
AU Optronics (Shanghai) Co., Ltd. (“AUSH”)	Subsidiary
AU Optronics (Xiamen) Corp. (“AUXM”)	Subsidiary
AU Optronics (Suzhou) Corp., Ltd. (“AUSZ”)	Subsidiary
AU Optronics (Slovakia) s.r.o. (“AUSK”)	Subsidiary

(Continued)

60

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

Name of related party

Relationship with the Company

AFPD Pte., Ltd. (“AUST”) Subsidiary AUO (Kunshan) Co., Ltd. (“AUOKS”, formerly AU Optronics Subsidiary (Kunshan) Co., Ltd. (“AUOKS”)) a.u.Vista Inc. (“AUVI”) Subsidiary Fortech Electronics (Suzhou) Co., Ltd. (“FTWJ”) Subsidiary Darwin Precisions (Xiamen) Corp. (“DPXM”) Subsidiary AUO Green Energy America Corp.(“AEUS”) Subsidiary AUO Display Plus Netherlands B.V. (“ADPNL”) Subsidiary ComQi Inc. (“CQUS”) Subsidiary Edgetech Data Technologies (Suzhou) Corp., Ltd. (“ATISZ”) Subsidiary Ennostar Associate Epistar Subsidiary of Ennostar Yenrich Technology Corporation (“Yenrich”) Subsidiary of Ennostar Lextar Subsidiary of Ennostar Wellybond Corporation (“WBC”) Subsidiary of Ennostar TRENDYLITE CORPORATION (“TRENDYLITE”) Subsidiary of Ennostar Raydium Semiconductor Corporation (“Raydium”) Associate Star Shining Energy Corporation (“SSEC”) Associate TronGen Power Corporation (“TGPC”) Subsidiary of SSEC Fargen Power Corporation (“FGPC”) Subsidiary of SSEC Sheng Li Energy Corporation (“SLEC”) Subsidiary of SSEC Ri Ji Power Corporation (“RJPC”) Subsidiary of SSEC Ri Jing Power Corporation (“RGPC”) Subsidiary of SSEC Mao Zheng Energy Corporation (“MZEC”) Subsidiary of SSEC Mao Xin Energy Corporation (“MXEC”) Subsidiary of SSEC Sheng Feng Power Corporation (“SFPC”) Subsidiary of SSEC ChampionGen Power Corporation (“CGPC”) Subsidiary of SSEC Daxin Materials Corp. (“Daxin”) Associate ADLINK Associate Qisda Associate[(ii)] Qisda (Suzhou) Co., Ltd. (“QCSZ”) Subsidiary of Qisda Qisda Electronics (Suzhou) Co., Ltd. (“QCES”) Subsidiary of Qisda Qisda Optronics (Suzhou) Co., Ltd. (“QCOS”) Subsidiary of Qisda Mainteq Europe B.V. (“MQE”) Subsidiary of Qisda BenQ Corporation (“BenQ”) Subsidiary of Qisda BenQ Materials Corp. (“BMC”) Subsidiary of Qisda

(Continued)

61

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

	Relationship with the
Name of related party	Company
BenQ Asia Pacific Corp. (“BQP”)	Subsidiary of Qisda
BenQ America Corporation (“BQA”)	Subsidiary of Qisda
DFI Inc. (“DFI”)	Subsidiary of Qisda
Data Image Corporation (“DIC”)	Subsidiary of Qisda
Data Image (Suzhou) Corporation (“DICSZ”)	Subsidiary of Qisda
Sysage Technology Co., Ltd. (“Sysage”)	Subsidiary of Qisda
ACE Pillar Co., Ltd. (“ACE”)	Subsidiary of Qisda
Qisda Vietnam Co., Ltd (“QVH”)	Subsidiary of Qisda
Golden Spirit Co., Ltd. (“GSC”)	Subsidiary of Qisda
ADVANCEDTEK INTERNATIONAL CORP.	Subsidiary of Qisda
(“ADVANCEDTEK”)
IRIS Optronics Co., Ltd. (“IOC”)	Associate
SINTRONES Technology Corp. (“SINTRONES”)	AUO represented as a director
	of SINTRONES
Play Nitride Inc. (“PlayNitride”)	Konly represented as a
	director of PlayNitride
PlayNitride Display Co., Ltd. (“PND”)	Subsidiary of PlayNitride
BenQ Foundation	Substantive related party(iii)
AUO Foundation	Substantive related party

(i) For the information in respect of the Company’s subsidiaries and related parties, please refer to the consolidated financial statements for the years ended December 31, 2021 and 2020.

• (ii) The Company has accounted for the investment in Qisda using the equity method since December 31, 2020. Qisda and its subsidiaries are changed as the Company’s associates from the same date while previously they are categorized as other related parties. See Note 6(7) for the relevant information.

• (iii) BenQ Foundation is no longer a related party of the Company starting from the second quarter of 2021.

• (2) Compensation to key management personnel

Key management personnel’s compensation comprised:

Short-term employee benefits Post-employment benefits Share-based payments	For the years ended December 31,	For the years ended December 31,
	2021 $ 869,292 1,402 17,276 $ 887,970	2020
		218,723 2,032 -
		220,755

(Continued)

62

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

Refer to Note 6(17) for information on share-based payments.

• (3) Except for otherwise disclosed in other notes to the parent company only financial statements, the Company’s significant related party transactions and balances were as follows:

• a. Sales

Subsidiaries Associates Others	Sales For the years ended December 31, 2021 2020 $ 33,263,332 4,248,540 12,100,078 765,017 - 10,775,744 $ 45,363,410 15,789,301	Accounts receivable from related parties December 31, 2021 2020 5,210,500 291,943 2,263,856 1,966,761 988 - 7,475,344 2,258,704	Accounts receivable from related parties December 31, 2021 2020 5,210,500 291,943 2,263,856 1,966,761 988 - 7,475,344 2,258,704
	2021 $ 33,263,332 12,100,078 - $ 45,363,410		2020 291,943 1,966,761 -
			2,258,704

The collection terms for sales to related parties were 25 to 55 days from the end of the month during which the invoice is issued. The pricing for sales to related parties were not materially different from those with third parties.

b. Purchases

Subsidiaries Associates Others	Purchases For the years ended December 31, 2021 2020 $ 99,800,127 87,988,257 16,082,012 3,237,827 - 12,385,625 $ 115,882,139 103,611,709	Accounts payable to related parties December 31, 2021 2020 29,053,948 26,039,202 4,348,634 3,884,576 - - 33,402,582 29,923,778	Accounts payable to related parties December 31, 2021 2020 29,053,948 26,039,202 4,348,634 3,884,576 - - 33,402,582 29,923,778
	2021 $ 99,800,127 16,082,012 - $ 115,882,139		2020 26,039,202 3,884,576 -
			29,923,778

The payment terms for purchases from related parties were 30 to 120 days. The pricing and payment terms with related parties were not materially different from those with third parties.

c. Acquisition of property, plant and equipment

Subsidiaries Associates Others	Acquisition prices	Acquisition prices
	For the years ended December 31,
	2021 $ 267,127 37,880 - $ 305,007	2020
		275,226 8,815 9,560
		293,601

(Continued)

63

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

• d. Disposal of property, plant and equipment and others

Subsidiaries Other related party transactions Transaction type	Proceeds from disposal	Proceeds from disposal	Gains on disposal For the years ended December 31, 2021 2020 4 95 4 December 31, 2021 December 31, 2021 $ 2,051,484 1,004,613 19,778 16,805 $ 2,071,262 1,021,418 $ 305,561 642,666 52,825 15,154 11,455 - $ 369,841 657,820 For the years ended December 31, 2021 2020 $ 30,110 5,901 127,341 44,408 - 114,383 $ 157,451 164,692 For the years ended December 31, 2021 2020 $ 57,883 30,151 9,312 11,986 - 6,155 $ 67,195 48,292 $ 678,931 671,967 76,431 69,744 65,536 52,613 $ 820,898 794,324	Gains on disposal For the years ended December 31, 2021 2020 4 95 4 December 31, 2021 December 31, 2021 $ 2,051,484 1,004,613 19,778 16,805 $ 2,071,262 1,021,418 $ 305,561 642,666 52,825 15,154 11,455 - $ 369,841 657,820 For the years ended December 31, 2021 2020 $ 30,110 5,901 127,341 44,408 - 114,383 $ 157,451 164,692 For the years ended December 31, 2021 2020 $ 57,883 30,151 9,312 11,986 - 6,155 $ 67,195 48,292 $ 678,931 671,967 76,431 69,744 65,536 52,613 $ 820,898 794,324	Gains on disposal For the years ended December 31, 2021 2020 4 95 4 December 31, 2021 December 31, 2021 $ 2,051,484 1,004,613 19,778 16,805 $ 2,071,262 1,021,418 $ 305,561 642,666 52,825 15,154 11,455 - $ 369,841 657,820 For the years ended December 31, 2021 2020 $ 30,110 5,901 127,341 44,408 - 114,383 $ 157,451 164,692 For the years ended December 31, 2021 2020 $ 57,883 30,151 9,312 11,986 - 6,155 $ 67,195 48,292 $ 678,931 671,967 76,431 69,744 65,536 52,613 $ 820,898 794,324	Gains on disposal	Gains on disposal	Gains on disposal
	For the years ended December 31,					For the years ended December 31,
		2020				2021	2020 4 December 31, 2021	2020
						95		4
			$ $ $ $				1,004,613 16,805
							1,021,418
							642,666 15,154 -
							657,820
					2021 2020 $ 30,110 5,901 127,341 44,408 - 114,383 $ 157,451 164,692 For the years ended December 31,			2020
	Subsidiaries Associates Others Type of related party							5,901 44,408 114,383
								164,692
					2021 $ 57,883 9,312 - $ 67,195 $ 678,931 76,431 65,536 $ 820,898			2020
	Subsidiaries Associates Others Subsidiaries Associates Others							30,151 11,986 6,155
								48,292
								671,967 69,744 52,613
								794,324

• e. Other related party transactions

The Company leased portion of its facilities and plants to related parties. The collection term was receipts in advance, and the pricing was not materially different from that with third parties.

(Continued)

64

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

The Company participated in capital increase of related parties in the aggregate of $22,713,270 thousand and $1,338,953 thousand, respectively, for 2021 and 2020. In addition, for the years ended December 31, 2021 and 2020, the Company entitled for cash dividends declared by related parties of $813,819 thousand and $371,371 thousand, respectively. As of December 31, 2021 and 2020, the aforementioned dividends were all received.

8. Pledged Assets

The carrying amounts of the assets which the Company pledged as collateral were as follows:

Pledged assets Restricted cash in banks(i) Land and buildings Machinery and equipment	Pledged to secure Guarantee for warranties Long-term borrowings limit Long-term borrowings limit	December 31, 2021 $ 8,657 47,454,920 31,810,247 $ 79,273,824	December 31, 2020
			8,657 46,628,977 45,407,718
			92,045,352

• (i) Classified as other noncurrent assets.

9. Significant Contingent Liabilities and Unrecognized Commitments

The significant commitments and contingencies of the Company as of December 31, 2021, in addition to those disclosed in other notes to the parent company only financial statements, were as follows:

• (1) Outstanding letters of credit

As at December 31, 2021, the Company had the following outstanding letters of credit for the purpose of purchasing machinery and equipment and materials:

		December 31,
		2021
	Currency	(in thousands)
USD		5,479
JPY		1,767,366
EUR		92

• (2) Technology licensing agreements

Starting in 1998, AUO has entered into technical collaboration, patent licensing, and/or patent cross licensing agreements with Fujitsu Display Technologies Corp. (subsequently assumed by Fujitsu Limited), Toppan Printing Co., Ltd. (“Toppan Printing”), Semiconductor Energy Laboratory Co., Ltd., Japan Display Inc. (formerly Japan Display East Inc./Hitachi Displays, Ltd.), Panasonic Liquid Crystal Display Co., Ltd. (formerly IPS Alpha Technology, Ltd.), LG Display Co., Ltd., Sharp Corporation, Samsung Electronics Co., Ltd., Hydis Technologies Co., Ltd., Sanyo Electronic Co., Ltd., Seiko Epson Corporation and others. AUO believes that it is in compliance with the terms and conditions of the aforementioned agreements.

(Continued)

65

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

(3) Purchase commitments

• a. In 2021, AUO entered into a long-term materials supply agreement with a supplier, under which, AUO and the supplier agreed on the supply of certain IC chip at agreed prices and quantities.

• b. As at December 31, 2021, significant outstanding purchase commitments for construction in progress, property, plant and equipment totaled $15,620,186 thousand.

• (4) Litigation

Antitrust civil actions lawsuits in the United States and other jurisdictions

In May 2014, LG Electronics Nanjing Display Co., Ltd. and seven of its affiliates filed a lawsuit in Seoul Central District Court against certain LCD manufacturers including AUO, alleging overcharge and claiming damages. AUO does not believe service has been properly made, but in order to protect its rights, AUO has retained counsel to handle the related matter, and at this stage, the final outcome of these matters is uncertain. AUO has been reviewing the merits of this lawsuit on an on-going basis.

In September 2018, AUOUS received a complaint filed by the Government of Puerto Rico on its own behalf and on behalf of all consumers and governmental agencies of Puerto Rico against certain LCD manufacturers including AUO and AUOUS in the Superior Court of San Juan, Court of First Instance alleging unjust enrichment and claiming unspecified monetary damages. AUO has retained counsel to handle the related matter and intends to defend this lawsuit vigorously, and at this stage, the final outcome of these matters is uncertain. AUO is reviewing the merits of this lawsuit on an ongoing basis.

As of February 10, 2022, the Company has made certain provisions with respect to certain of the above lawsuits as the management deems appropriate, considering factors such as the nature of the litigation or claims, the materiality of the amount of possible loss, the progress of the cases and the opinions or views of legal counsel and other advisors. Management will reassess all litigation and claims at each reporting date based on the facts and circumstances that exist at that time, and will make additional provisions or adjustments to previous provisions. The ultimate amount cannot be ascertained until the relevant cases are closed. The ultimate resolution of the legal proceedings and/or lawsuits cannot be predicted with certainty. While management intends to defend certain of the lawsuits described above vigorously, there is a possibility that one or more legal proceedings or lawsuits may result in an unfavorable outcome to the Company. In addition to the matters described above, the Company is also a party to other litigations or proceedings that arise during the ordinary course of business. Except as mentioned above, the Company, to its knowledge, is not involved as a defendant in any material litigation or proceeding which could be expected to have a material adverse effect on the Company’s business or results of operations.

(Continued)

66

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

10. Significant Disaster Losses: None

11. Subsequent Event: None

12. Others

Since 2010, there have been environmental proceedings relating to the development project of the Central Taiwan Science Park in Houli, Taichung, which AUO’ s second 8.5-generation fab is located at (the “ Project” ). The Environmental Protection Administration (“ EPA” ) of the Executive Yuan of Taiwan issued the environmental assessment and development approval on November 6, 2018. On October 24, 2019, the Appeal Review Committee of the Executive Yuan rejected the administrative appeal filed by five local residents. On December 24, 2019, the residents have proceeded to file an administrative action for invalidating the environmental assessment again. The matter is still under review by the court. Management does not believe that this event will have a material adverse effect on the Company’ s operation and will continue to monitor the development of this event.

13. Additional Disclosures

• (1) Information on significant transactions:

Following are the additional disclosures required by the Regulations for the Company for the year ended December 31, 2021.

• a. Financings provided: Please see Table 1 attached.

• b. Endorsements/guarantees provided: Please see Table 2 attached.

• c. Marketable securities held (excluding investment in subsidiaries, associates and joint ventures): Please see Table 3 attached.

• d. Individual marketable securities acquired or disposed of with costs or prices exceeding NT$300 million or 20% of the paid-in capital: Please see Table 4 attached.

• e. Acquisition of individual real estate with costs exceeding NT$300 million or 20% of the paidin capital: None

• f. Disposal of individual real estate with prices exceeding NT$300 million or 20% of the paid-in capital: Please see Table 5 attached.

• g. Purchases from or sales to related parties with amounts exceeding NT$100 million or 20% of the paid-in capital: Please see Table 6 attached.

• h. Receivables from related parties with amounts exceeding NT$100 million or 20% of the paidin capital: Please see Table 7 attached.

• i. Information about trading in derivative instruments: Please see Note 6(2).

(Continued)

67

AU OPTRONICS CORP. Notes to the Parent Company Only Financial Statements

• (2) Information on investees (excluding information on investment in Mainland China): Please see Table 8 attached.

• (3) Information on investment in Mainland China:

• a. The related information on investment in Mainland China: Please see Table 9.1 and 9.2 attached.

• b. Upper limit on investment in Mainland China: Please see Table 9.1 and 9.2 attached.

• c. Significant transactions:

Significant direct or indirect transactions with the investees in Mainland China for the year ended December 31, 2021, are disclosed in Note 13(1) “ Information on significant transactions”.

• (4) Major shareholders:

Major Shareholder	Shares	Shares
	Total Shares Owned	Ownership Percentage
Qisda	663,598,620	% 6.89

14. Segment Information

The Company has provided the operating segments disclosure in the consolidated financial statements. Disclosure of the segment information in the parent company only financial statements is waived.

(Continued)

68

AU OPTRONICS CORP. AND SUBSIDIARIES

Financings Provided

For the year ended December 31, 2020 (Amount in thousands of New Taiwan Dollars)

Table 1

**No. **	Financing Company	Borrowing Company	Financial Statement Account	Related Party	Maximum Balance for the Period (Note 3)	Ending Balance (Notes 1 and 2)	Amount Actually Drawn Down (Notes 1 and 4)	Interest Rate	Nature of Financing	Transaction Amounts	Reason for Financing	Allowance for Bad Debt	Collateral	Collateral	Financing Limits for Each Borrowing Company (Notes 1 and 5)	Limits on Financing Company’s Total Financing Amount (Notes 1 and 5)
													Item	Value
0	AUO	ACTW	Other	Yes	3,500,000	2,000,000	1,000,000	Markup rate on	Needs for	-	Operating	-	-	-	18,280,469	73,121,876
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
0	AUO	AUKS	Other	Yes	1,300,920	-	-	Markup rate on	Needs for	-	Operating	-	-	-	18,280,469	73,121,876
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
0	AUO	SMI	Other	Yes	30,000	30,000	-	Markup rate on	Needs for	-	Operating	-	-	-	18,280,469	73,121,876
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
0	AUO	UTI	Other	Yes	200,000	200,000	-	Markup rate on	Needs for	-	Operating	-	-	-	18,280,469	73,121,876
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
1	AULB	AUKS	Other	Yes	13,792,960	13,585,440	6,135,360	Markup rate on	Needs for	-	Operating	-	-	-	22,363,769	22,363,769
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
2	AUXM	AUKS	Other	Yes	5,254,560	4,382,400	1,972,080	Markup rate on	Needs for	-	Operating	-	-	-	5,797,418	5,797,418
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
3	BVXM	AUKS	Other	Yes	438,240	438,240	438,240	Markup rate on	Needs for	-	Operating	-	-	-	523,838	523,838
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties

69

**No. **	Financing Company	Borrowing Company	Financial Statement Account	Related Party	Maximum Balance for the Period (Note 3)	Ending Balance (Notes 1 and 2)	Amount Actually Drawn Down (Notes 1 and 4)	Interest Rate	Nature of Financing	Transaction Amounts	Reason for Financing	Allowance for Bad Debt	Collateral	Collateral	Financing Limits for Each Borrowing Company (Notes 1 and 5)	Limits on Financing Company’s Total Financing Amount (Notes 1 and 5)
													Item	Value
4	AUSJ	AUKS	Other	Yes	1,446,192	1,446,192	788,832	Markup rate on	Needs for	-	Operating	-	-	-	1,587,158	1,587,158
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
4	AUSJ	UFSD	Other	Yes	219,120	219,120	-	Markup rate on	Needs for	-	Operating	-	-	-	3,967,894	3,967,894
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
4	AUSJ	UFSZ	Other	Yes	173,104	87,648	35,497	Markup rate on	Needs for	-	Operating	-	-	-	3,967,894	3,967,894
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
4	AUSJ	A-Care	Other	Yes	86,552	43,824	4,382	Markup rate on	Needs for	-	Operating	-	-	-	3,967,894	3,967,894
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
5	AUSZ	AUKS	Other	Yes	6,135,360	6,135,360	3,067,680	Markup rate on	Needs for	-	Operating	-	-	-	6,547,160	6,547,160
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
6	BVHF	AUKS	Other	Yes	306,768	306,768	306,768	Markup rate on	Needs for	-	Operating	-	-	-	327,745	327,745
			receivables					short-term	short-term		capital
			from related					financing cost	financing
			parties
7	DPSZ	AUKS	Other	Yes	438,240	438,240	438,240	Adjusted by	Needs for	-	Operating	-	-	-	523,662	523,662
			receivables					base lending	short-term		capital
			from related					rate of People’s	financing
			parties					Bank of China
8	DPTW	DPSK	Other	Yes	52,863	52,574	29,441	Adjusted by short-term average lending rate	Needs for short-term financing	-	Operating	-	-	-	2,482,061	3,971,298
			receivables								capital
			from related
			parties
9	FTKS	AUKS	Other	Yes	433,640	-	-	Adjusted by	Needs for	-	Operating	-	-	-	558,230	558,230
			receivables					base lending	short-term		capital
			from related					rate of People’s	financing
			parties					Bank of China
10	FTWJ	FHWJ	Other	Yes	65,046	43,824	43,824	Adjusted by	Needs for	-	Operating	-	-	-	1,830,825	1,830,825
			receivables					base lending	short-term		capital
			from related					rate of People’s	financing
			parties					Bank of China

70

Note 1: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date.

Note 2: The ending balance represents the amounts approved by the Board of Directors.

• Note 3: The maximum balance for the period represents the highest amount in New Taiwan Dollar announced or occurred during the period.

Note 4: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements.

• Note 5: The policy for the limit on total financing amount and the financing limit for any individual entity are prescribed as follows:

• a. AUO: The total amount available for lending purposes shall not exceed 40% of AUO’s net worth as stated in its latest financial statement. The total amount for lending to a company shall not exceed 10% of AUO’s net worth as stated in its latest financial statement.

• b. AULB, AUSZ, AUXM, AUSJ, BVXM and BVHF: The total amount available for lending purposes shall not exceed 40% of the net worth of the lending company as stated in its latest financial statement. The total amount for lending to a company shall not exceed 40% of the net worth of the lending company as stated in its latest financial statement.

• c. In the event that the financing is between foreign subsidiaries whose voting shares are 100% owned, directly or indirectly, by AUO, the aggregate amount available for lending to such borrowers and total amount lendable to a company shall not exceed the net worth of the lending company as stated in its latest financial statement.

• d. DPTW: The total amount available for lending purposes shall not exceed 40% of DPTW’s net worth as stated in its latest financial statement. The total amount for lending to a company shall not exceed 25% of DPTW’s net worth as stated in its latest financial statement.

• e. DPSZ, FTWJ and FTKS: The total amount available for lending purposes shall not exceed 40% of the net worth of the lending company. The total amount for lending to a company shall not exceed 40% of the net worth of the lending company.

• f. In the event that the financing is between foreign subsidiaries whose voting shares are 100% owned, directly and indirectly, by DPTW, the aggregate amount available for lending to such borrowers and the total amount lendable to each of such borrowers shall not exceed the net worth of the lending company.

71

AU OPTRONICS CORP. AND SUBSIDIARIES

Endorsements/Guarantees Provided

For the year ended December 31, 2020

(Amount in thousands of New Taiwan Dollars)

Table 2

No.	Endorser/ Guarantor	Guaranteed Party	Guaranteed Party	Limits on Endorsement/ Guarantee Amount Provided for Each Party (Notes 4 and 5)	Maximum Endorsement/ Guarantee Balance for the Period (Note 2)	Ending Balance (Notes 3 and 4)	Amount Actually Drawn Down (Note 4)	Amount of Endorsement/ Guarantee Collateralized by Properties	Ratio of Accumulated Endorsement/ Guarantee to Net Worth per Latest Financial Statements	Maximum Endorsement/ Guarantee Amount Allowable (Notes 4 and 5)	Endorsement/ Guarantee Provided by Parent Company to Subsidiary	Endorsement/ Guarantee Provided by Subsidiary to Parent Company	Endorsement/ Guarantee Provided to Subsidiaries in Mainland China
		Name	Nature of Relationship (Note 1)
0	AUO	AUKS	2	91,402,346	15,391,064	14,373,073	8,654,361	-	7.86%	182,804,691	Yes	No	Yes
1	AUXM	AUO	3	14,493,546	6,354,480	6,354,480	-	-	43.84%	14,493,546	No	Yes	No
2	AUSZ	AUO	3	16,367,899	4,470,048	4,470,048	-	-	27.31%	16,367,899	No	Yes	No
3	DPXM	DPTW	3	1,739,404	438,240	438,240	-	-	10.08%	1,739,404	No	No	No

Note 1: The relationship between the endorser/guarantor and the guaranteed party:

1. A company with which it does business.

2. A company in which the Company directly and indirectly holds more than 50% of the voting shares.

3. A company that directly and indirectly holds more than 50% of the voting shares in the Company.

4. Companies in which the Company holds, directly or indirectly, 90% or more of the voting shares.

5. A company that fulfills its contractual obligations by providing mutual endorsements/guarantees for another company in the same industry or for joint builders for purposes of undertaking a construction project.

6. A company that all capital contributing shareholders make endorsements/guarantees for their jointly invested company in proportion to their shareholding percentages.

7. Companies in the same industry provide among themselves joint and several security for a performance guarantee of a sales contract for pre-construction homes pursuant to the Consumer Protection Act for each other.

8. Note 2: The maximum endorsement/guarantee balance for the period represents the highest amount in New Taiwan Dollar announced or occurred during the period. Note 3: The ending balance represents the amounts approved by the Board of Directors.

9. Note 4: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date.

Note 5: The policy for the limit of total endorsement/guarantee amount and the limit on endorsement/guarantee amount provided to each party are prescribed as follows:

• a. AUO: The total endorsement/guarantee amount provided shall not exceed the net worth of AUO as stated in its latest financial statement. The aggregate amount of endorsement/guarantee provided to each guaranteed party shall not exceed 50% of AUO’s net worth as stated in its latest financial statement.

• b. AUSZ and AUXM: The total endorsement/guarantee amount provided and the aggregate amount of endorsement/guarantee provided to each guaranteed party both shall not exceed the net worth of the endorser/guarantor as stated in its latest financial statement.

• c. DPXM: The total endorsement/guarantee amount provided and the aggregate amount of endorsement/guarantee provided to each guaranteed party both shall not exceed 40% of DPXM’s net worth as stated in its latest financial statement.

72

AU OPTRONICS CORP. AND SUBSIDIARIES

Marketable Securities Held (Excluding Investment in Subsidiaries, Associates and Joint Ventures)

December 31, 2020

(Amount in thousands of New Taiwan Dollars and foreign currencies indicated, and shares in thousands)

Table 3

Name of Holder	Type and Name of Marketable Securities	Relationship with the Securities Issuer	Financial Statement Account		December 31, 2020	December 31, 2020		Maximum Shareholding in the Interim	Note
				Shares	Carrying Amount	Percentage of Ownership	Fair Value
AUO	BenQ ESCO Corp.’s stock	Related party	Financial assets at FVTPL－noncurrent Financial assets at FVTPL－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTPL－current Financial assets at FVTPL－current Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTPL－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTPL－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTOCI－noncurrent Financial assets at FVTPL－noncurrent	1,700	-	17.00%	-	17.00%
AULB	Abakus Solar AG’s stock	-		3	-	2.22%	-	2.22%
AUSH	T-powertek Optronics Co., Ltd.’s	-		1,293	CNY 6,250	1.66%	CNY 6,250	2.16%
	stock
FPWJ	Structured deposit	-		-	CNY 54,227	-	CNY 54,227	-
FTKS	Structured deposit	-		-	CNY 72,585	-	CNY 72,585	-
Konly	PlayNitride Inc.’s stock	-		967	113,640	2.26%	113,640	2.34%
Konly	SnapBizz CloudTech Pte. Ltd.’s	-		13	-	4.74%	-	5.33%
	stock
Konly	Azotek Co., Ltd.’s stock	-		2,407	7,345	4.00%	7,345	4.01%
Konly	ChenFeng Optronics Corporation’s	-		1,500	-	2.35%	-	2.63%
	stock
Konly	Epistar Corporation’s stock	-		7,037	294,668	0.65%	294,668	0.65%
Konly	a2peak power Co., Ltd.’s stock	-		4,000	-	10.87%	-	10.87%
DPTW	D8AI Holdings Corporation’s	-		7,000	8,649	4.59%	8,649	4.59%
	stock
DPTW	Disign Incorporated’s stock	-		2	10,714	19.89%	10,714	19.89%
DPTW	Evertrust Technology Ltd.’s stock	-		150	1,500	16.13%	1,500	16.13%
DPTW	HUAI I Precision Technology Co.,	-		2,914	34,968	10.00%	34,968	10.00%
	Ltd.’s stock
DPTW	WiBASE Industrial Solutions Inc.’s	Related party		3,536	42,432	9.11%	42,432	12.11%
	stock
Ronly	PlayNitride Inc.’s stock	-		359	71,517	0.84%	71,517	0.87%
Ronly	Exploit Technology Co., Ltd.’s	-		41	-	0.49%	-	0.49%
	stock
Ronly	Profet AI Technology Co., Ltd.’s stock	-	Financial assets at FVTOCI－noncurrent	511	10,002	10.16%	10,002	10.16%

73

AU OPTRONICS CORP. AND SUBSIDIARIES

Individual Marketable Securities Acquired or Disposed of with Costs or Prices Exceeding NT$300 Million or 20% of the Paid-in Capital

For the year ended December 31, 2020

(Amount in thousands of New Taiwan Dollars and foreign currencies indicated, and shares in thousands)

Table 4

Company Name	Type and Name of Marketable Securities	Financial Statement Account	**Counterparty **	Relationship	Beginning Balance	Beginning Balance	Acquisition	Acquisition		Disposal	Disposal	Disposal	Ending Balance	Ending Balance	Note
					Shares	Amount	Shares	Amount	Shares	Amount	Carrying Amount	Gain/Loss on Disposal	Shares	Amount
AUO	CQIL’s stock ADLINK’s stock SSEC’s stock CQUS’s stock CQHLD’s stock Structured deposit Structured deposit	Investments in	-	-	39,974	576,111	-	305,963	-	-	-	-	39,974	881,300	2 1 2 2 2 3 3
		equity-accounted
		investees
AUO		Investments in equity-accounted investees Investments in equity-accounted investees Investments in equity-accounted investees Investments in equity-accounted investees	-	-	-	-	42,310	2,411,693	-	-	-	-	42,310	2,311,727
AUO			-	-	93,000	953,966	62,000	620,000	-	-	-	-	155,000	1,586,817
CQHLD			-	-	11	USD 3,863	2	USD 10,250	-	-	-	-	13	USD 14,126
CQIL			-	-	635,709	USD 18,491	21	USD 10,250	-	-	-	-	635,730	USD 29,097
DPSZ		Financial assets	-	-	-	CNY 70,488	-	-	-	CNY 71,372	CNY 71,372	-	-	-
		at FVTPL－
		current
FPWJ		Financial assets	-	-	-	CNY 100,642	-	CNY 105,750	-	CNY 154,403	CNY 154,403	-	-	CNY 54,227
		at FVTPL－
		current
FTKS	Structured deposit	Financial assets	-	-	-	CNY 171,493	-	CNY 448,500	-	CNY 553,777	CNY 553,777	-	-	CNY 72,585
		at FVTPL－
		current

Note 1: a. The acquisition amount refers to the tender offer consideration for acquiring part of ADLINK’s shares. See Note 6(6) for the relevant information. b. The ending balance includes the recognition of investment gain (loss) and foreign currency translation differences under the equity method.

Note 2: The acquisition amount refers to the participation in the investees’ capital increase. The ending balance includes the recognition of investment gain (loss) and foreign currency translation differences under the equity method.

Note 3: The ending balance includes the gain/loss on valuation of the financial asset.

74

AU OPTRONICS CORP. AND SUBSIDIARIES

Purchases from or Sales to Related Parties with Amounts Exceeding NT$100 Million or 20% of the Paid-in Capital For the year ended December 31, 2020

(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

Table 5

Table 5
Company Name	Counterparty	Relationship	Transaction Details				Transactions with Terms Different from Others		Notes/Accounts Receivable (Payable)		Note
			Purchases /Sales	Amount (Note 2)	Percentage of Total Purchases /Sales	Credit Terms	Unit Price (Note 1)	Credit Terms (Note 1)	Ending Balance (Note 2)	Percentage of Total Notes /Accounts Receivable (Payable)
AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO AUO	AUKS AUSK AUST AUSZ AUXM Qisda BMC Raydium Daxin DPTW AUNL AUSZ AUUS AUXM DICSZ QCOS QCSZ	Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Associate Subsidiary of Qisda Associate Associate Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of Qisda Subsidiary of Qisda Subsidiary of Qisda	Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Purchases Sales Sales Sales Sales Sales Sales Sales	20,126,829 116,806 4,574,857 35,317,575 24,270,146 8,412,978 3,951,995 874,933 2,310,181 3,527,426 (1,354,682) (1,399,835) (269,837) (948,058) (216,863) (333,463) (7,192,754)	11%	EOM 30 days EOM 45 days EOM 45 days EOM 45 days EOM 45 days EOM 45 days EOM 90 days EOM 120 days EOM 120 days EOM 60 days EOM 45 days EOM 45 days EOM 75 days EOM 45 days EOM 45 days EOM 55 days EOM 55 days	- - - - - - - - - - - - - - - - -		(3,728,045) (16,849) (676,280) (11,760,985) (9,153,218) (1,622,435) (1,119,694) (326,321) (787,616) (698,675) 184,233 - 63,767 - 38,126 59,166 1,103,551	(7)%
					-					-
					2%					(1)%
					19%					(22)%
					13%					(17)%
					5%					(3)%
					2%					(2)%
					-					(1)%
					1%					(1)%
					2%					(1)%
					(1)%					-
					(1)%					-
					-					-
					-					-
					-					-
					-					-
					(3)%					3%
AUO	RJPC	Subsidiary of SSEC	Sales	(254,572)	-	EOM 25 days	-		96,436	-

75

Company Name	Counterparty	Relationship	Transaction Details	Transaction Details	Transaction Details		Transactions with Terms Different from Others	Transactions with Terms Different from Others	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchases /Sales	Amount (Note 2)	Percentage of Total Purchases /Sales	Credit Terms	Unit Price (Note 1)	Credit Terms (Note 1)	Ending Balance (Note 2)	Percentage of Total Notes /Accounts Receivable (Payable)
AUO AUO AUO AUO ACMK AUKS AUKS AUKS AUKS AUNL AUSH AUSK AUST AUSZ AUSZ AUSZ AUSZ AUSZ AUSZ AUSZ AUUS AUUS AUXM	BenQ SLEC DPTW FGPC ACTW AUO AUSZ Qisda AUO AUO AUO AUO AUO AUO Qisda BMC Raydium DPTW AUO AUKS AUO AUO AUO	Subsidiary of Qisda Subsidiary of SSEC Subsidiary of AUO Subsidiary of SSEC Subsidiary of AUO Ultimate parent company Subsidiary of AUO Associate Ultimate parent company Ultimate parent company Ultimate parent company Ultimate parent company Ultimate parent company Ultimate parent company Associate Subsidiary of Qisda Associate Subsidiary of AUO Ultimate parent company Subsidiary of AUO Ultimate parent company Ultimate parent company Ultimate parent company	Sales Sales Sales Sales Purchases Purchases Purchases Purchases Sales Purchases Sales Sales Sales Purchases Purchases Purchases Purchases Purchases Sales Sales Purchases Sales Purchases	(2,962,512) (221,114) (186,407) (121,267) USD 20,085 CNY 47,732 CNY 181,415 CNY 26,786 CNY (4,777,267) EUR 42,597 CNY (36,314) EUR (3,850) USD (154,779) CNY 395,440 CNY 513,274 CNY 253,846 CNY 591,588 CNY 204,540 CNY (8,393,763) CNY (181,390) USD 8,104 USD (5,649) CNY 200,895	(1)%	EOM 55 days Payment in advance EOM 45 days EOM 25 days OA 45 days EOM 45 days EOM 60 days EOM 120 days EOM 30 days EOM 45 days End of quarter 25 days EOM 45 days EOM 45 days EOM 45 days EOM 120 days EOM 90 days EOM 120 days EOM 120 days EOM 45 days EOM 60 days EOM 75 days EOM 30 days EOM 45 days	- - - - - - - - - - - - - - - - - - - - - - -		630,668 - 15,384 22,130 USD (944) CNY (3,557) CNY (57,359) CNY (14,258) CNY 857,238 EUR (5,245) - EUR 888 USD 23,723 - CNY (181,382) CNY (69,087) CNY (212,094) CNY (63,420) CNY 2,693,520 CNY 57,359 USD (2,235) - -	1%
					-					-
					-					-
					-					-
					95%					(98)%
					2%					-
					7%					(7)%
					1%					(2)%
					(100)%					100%
					100%					(100)%
					(99)%					-
					(83)%					83%
					(100)%					100%
					5%					-
					7%					(7)%
					3%					(3)%
					8%					(8)%
					3%					(2)%
					(94)%					97%
					(2)%					2%
					100%					(100)%
					(38)%					-
					4%					-
AUXM	DPXM	Subsidiary of AUO	Purchases	CNY 24,024	-	EOM 120 days	-		CNY (10,098)	(1)%

76

Company Name	Counterparty	Relationship	Transaction Details	Transaction Details	Transaction Details		Transactions with Terms Different from Others	Transactions with Terms Different from Others	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchases /Sales	Amount (Note 2)	Percentage of Total Purchases /Sales	Credit Terms	Unit Price (Note 1)	Credit Terms (Note 1)	Ending Balance (Note 2)	Percentage of Total Notes /Accounts Receivable (Payable)
AUXM AUXM AUXM AUXM AUXM BVXM DPSZ DPXM DPXM DPXM DPXM DPXM FPWJ FTWJ FTWJ FTWJ M.Setek ACTW ACTW DPTW DPTW DPTW DPTW	BMC Raydium DPTW AUO BVXM AUXM DPTW DPTW Lextar AUXM DPSZ DPTW DPTW DPTW Lextar DPTW ACTW M.Setek ACMK AUO DPSZ DPXM FTWJ	Subsidiary of Qisda Associate Subsidiary of AUO Ultimate parent company Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Associate Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Associate Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Ultimate parent company Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO	Purchases Purchases Purchases Sales Sales Purchases Sales Purchases Purchases Sales Sales Sales Purchases Purchases Purchases Sales Sales Purchases Sales Purchases Purchases Purchases Purchases	CNY 165,621 CNY 416,679 CNY 198,904 CNY (5,750,142) CNY (74,146) CNY 74,146 CNY (121,527) CNY 37,633 CNY 37,521 CNY (24,006) CNY (24,190) CNY (618,831) CNY 92,417 CNY 51,684 CNY 63,749 CNY (847,131) JPY (3,856,705) 1,068,693 (625,854) 185,387 516,782 2,636,646 3,613,971	3%	EOM 90 days EOM 120 days EOM 120 days EOM 45 days EOM 45 days EOM 45 days EOM 90 days EOM 60 days EOM 120 days EOM 120 days EOM 120 days EOM 90 days EOM 60 days EOM 60 days EOM 120 days EOM 90 days EOM 45 days EOM 45 days OA 45 days EOM 45 days EOM 90 days EOM 90 days EOM 90 days	- - - - - - - - - - - - - - - - - - - - - - -		CNY (50,157) CNY (183,374) CNY (80,964) CNY 2,098,691 - - CNY 45,615 CNY (28,412) CNY (14,937) CNY 10,098 CNY 15,743 CNY 287,335 CNY (30,239) CNY (243,989) CNY (23,544) CNY 623,056 JPY 1,198,928 (331,171) 26,908 (15,215) (199,291) (1,007,440) (1,152,320)	(3)%
					8%					(9)%
					4%					(4)%
					(91)%					95%
					(1)%					-
					100%					-
					(72)%					78%
					3%					(6)%
					3%					(3)%
					(1)%					2%
					(1)%					3%
					(38)%					58%
					93%					(100)%
					9%					(52)%
					11%					(5)%
					(96)%					100%
					(99)%					99%
					46%					(67)%
					(16)%					5%
					2%					(1)%
					5%					(7)%
					27%					(37)%
					37%					(42)%
DPTW	EFOP	Joint Venture	Purchases	900,611	9%	Payment in advance	-		-	-

77

Company Name	Counterparty	Relationship	Transaction Details	Transaction Details	Transaction Details		Transactions with Terms Different from Others	Transactions with Terms Different from Others	Notes/Accounts Receivable (Payable)	Notes/Accounts Receivable (Payable)	Note
			Purchases /Sales	Amount (Note 2)	Percentage of Total Purchases /Sales	Credit Terms	Unit Price (Note 1)	Credit Terms (Note 1)	Ending Balance (Note 2)	Percentage of Total Notes /Accounts Receivable (Payable)
DPTW DPTW DPTW DPTW DPTW DPTW	AUO AUSZ AUXM DPXM FPWJ FTWJ	Ultimate parent company Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO Subsidiary of AUO	Sales Sales Sales Sales Sales Sales	(3,668,313) (867,826) (849,740) (161,790) (391,979) (220,845)	(36)%	EOM 60 days EOM 120 days EOM 120 days EOM 60 days EOM 60 days EOM 60 days	- - - - - -		657,251 277,080 353,730 61,385 132,114 30,096	28%
					(9)%					12%
					(8)%					15%
					(2)%					3%
					(4)%					6%
					(2)%					1%
DPTW	QCES	Subsidiary of Qisda	Sales	(179,294)	(2)%	EOM 120 days	-		63,267	3%

Note 1: Transaction terms with related parties were similar to those with third parties, except for particular transactions with no similar transactions to compare with. For those transactions, transaction terms were determined in accordance with mutual agreements.

Note 2: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements.

78

AU OPTRONICS CORP. AND SUBSIDIARIES Receivables from Related Parties with Amounts Exceeding NT$100 Million or 20% of the Paid-in Capital December 31, 2020

(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

Table 6

Table 6
					Overdue Receivables		Amounts
Company			Ending Balance of	Turnover	Amount	Action Taken	Received in	Allowance
	Counterparty	Relationship	Receivables				Subsequent	for Bad
Name				Rate
			(Note 3)				Period	Debts
							(Note 1)
AUO	AUNL QCSZ ACTW BenQ AUO AUKS AUKS AUO AUO AUKS AUO AUKS AUKS AUKS AUKS DPTW DPTW DPTW	Subsidiary of AUO	184,233	8.46	62	Collected in subsequent period	115,652	-
AUO		Subsidiary of Qisda	1,103,551	7.07	339	Will be collected in next period	-	-
AUO		Subsidiary of AUO	1,001,440	(Note 2)	-	-	-	-
AUO		Subsidiary of Qisda	630,668	5.75	30	Will be collected in next period	-	-
AUKS		Ultimate parent company	CNY 857,238	7.03	CNY 17,285	Collected in subsequent period	CNY 470,258	-
AULB		Subsidiary of AUO	USD 220,489	(Note 2)	-	-	-	-
AUSJ		Subsidiary of AUO	CNY 183,146	(Note 2)	-	-	-	-
AUST		Ultimate parent company	USD 33,525	(Note 2)	USD 20	Will be collected in next period	-	-
AUSZ		Ultimate parent company	CNY 2,693,520	3.43	CNY 39,752	Collected in subsequent period	CNY 1,541,995	-
AUSZ		Subsidiary of AUO	CNY 769,017	(Note 2)	CNY 13,861	Collected in subsequent period	CNY 17,381	-
AUXM		Ultimate parent company	CNY 2,098,693	(Note 2)	CNY 47,660	Collected in subsequent period	CNY 1,469,960	-
AUXM		Subsidiary of AUO	CNY 459,274	(Note 2)	-	-	-	-
BVHF		Subsidiary of AUO	CNY 70,591	(Note 2)	-	-	-	-
BVXM		Subsidiary of AUO	CNY 102,936	(Note 2)	-	-	-	-
DPSZ		Subsidiary of AUO	CNY 104,956	(Note 2)	-	-	-	-
DPSZ		Subsidiary of AUO	CNY 45,615	2.97	CNY 6,072	Will be collected in next period	-	-
DPXM		Subsidiary of AUO	CNY 287,342	(Note 2)	-	-	-	-
FTWJ		Subsidiary of AUO	CNY 623,056	1.44	-	-	CNY 123,973	-
M.Setek	ACTW	Subsidiary of AUO	JPY 1,198,975	(Note 2)	JPY 246,932	Will be collected in next period	-	-

79

					Overdue Receivables	Overdue Receivables	Amounts
Company			Ending Balance of	Turnover	Amount	Action Taken	Received in	Allowance
	Counterparty	Relationship	Receivables				Subsequent	for Bad
Name				Rate
			(Note 3)				Period	Debts
							(Note 1)
ACTW	M.Setek AUO AUSZ AUXM DPXM FPWJ	Subsidiary of AUO	239,156	(Note 2)	-	-	-	-
DPTW		Ultimate parent company	659,144	(Note 2)	14,382	Will be collected in next period	-	-
DPTW		Subsidiary of AUO	277,080	3.06	-	-	-	-
DPTW		Subsidiary of AUO	353,730	1.99	-	-	-	-
DPTW		Subsidiary of AUO	124,129	(Note 2)	533	Will be collected in next period	-	-
DPTW		Subsidiary of AUO	132,114	5.93	58,861	Will be collected in next period	-	-
DPTW	FTWJ	Subsidiary of AUO	1,073,393	(Note 2)	-	-	413,975	-

Note 1: Until the end of January 2021.

Note 2: The ending balance includes other receivables from transactions not related to ordinary sales. Note 3: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements.

80

AU OPTRONICS CORP. AND SUBSIDIARIES

Business Relationship and Significant Intercompany Transactions For the year ended December 31, 2020

(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

Table 7

					Inter-company Transactions	Inter-company Transactions
N			Nt f Rltihi				Percentage of
	Company			Financial
		Ctt
o.	Name	**ounerpary **	aure o eaonsp	Statement	Amount	Trading Terms	Consolidated
							Net Revenue or
				Account			Total Assets
0	AUKS	AUO	Subsidiary to parent	Net revenue	CNY 4,777,267	The prices of inter-company sales are not comparable with	8%
						those of third parties. The credit term is EOM 30 days
0	AUKS	AUO	Subsidiary to parent	Receivables from	CNY 857,238	-	1%
				related parties
1	AULB	AUKS	Subsidiary to subsidiary	Receivables from	USD 220,489	-	2%
				related parties
2	AUST	AUO	Subsidiary to parent	Net revenue	USD 154,779	The prices of inter-company sales are not comparable with	2%
						those of third parties. The credit term is EOM 45 days
3	AUSZ	AUO	Subsidiary to parent	Net revenue	CNY 8,393,763	The prices of inter-company sales are not comparable with	13%
						those of third parties. The credit term is EOM 45 days
3	AUSZ	AUO	Subsidiary to parent	Receivables from	CNY 2,693,520	-	3%
				related parties
3	AUSZ	AUKS	Subsidiary to subsidiary	Receivables from	CNY 769,017	-	1%
				related parties
4	AUXM	AUO	Subsidiary to parent	Net revenue	CNY 5,750,142	The prices of inter-company sales are not comparable with	9%
						those of third parties. The credit term is EOM 45 days
4	AUXM	AUO	Subsidiary to parent	Receivables from	CNY 2,098,693	-	2%
				related parties
5	DPXM	DPTW	Subsidiary to subsidiary	Net revenue	CNY 618,831	The prices of inter-company sales are not comparable with	1%
						those of third parties. The credit term is EOM 90 days
6	FTWJ	DPTW	Subsidiary to subsidiary	Net revenue	CNY 847,131	The prices of inter-company sales are not comparable with	1%
						those of third parties. The credit term is EOM 90 days

81

					Inter-company Transactions	Inter-company Transactions
N			Nt f Rltihi				Percentage of
	Company			Financial
		Ctt
o.	Name	**ounerpary **	aure o eaonsp	Statement	Amount	Trading Terms	Consolidated
							Net Revenue or
				Account			Total Assets
6	FTWJ	DPTW	Subsidiary to subsidiary	Receivables from	CNY 623,056	-	1%
				related parties
7	AUO	AUSZ	Parent to subsidiary	Net revenue	1,399,835	The prices of inter-company sales are not comparable with	1%
						those of third parties. The credit term is EOM 45 days
8	DPTW	AUO	Subsidiary to parent	Net revenue	3,668,313	The prices of inter-company sales are not comparable with	1%
						those of third parties. The credit term is EOM 60 days

Note 1: This table discloses the information on inter-company sales and receivables which are accounted for 1% or more of the consolidated net revenue or the consolidated total assets, respectively. The information of the corresponding inter-company purchases and payables is no more disclosed herein. Note 2: All inter-company transactions have been eliminated in the consolidated financial statements.

82

AU OPTRONICS CORP. AND SUBSIDIARIES

Information on Investees (Excluding Information on Investment in Mainland China)

For the year ended December 31, 2020

(Amount in thousands of New Taiwan Dollars and foreign currencies indicated, and shares in thousands)

Table 8

Table 8
				Original Investment Amount		December 31, 2020			Maximum		Investor’s Share
										Net Income
Investor Coman	Investee Coman						Percentage	Carrying	Shareholding		of Profit (Loss) of Inestee
		Location	Main Activities	December 31,	December 31,					(Loss) of		Note
py	py			2020	2019	Shares	of Ownership	Amount (Notes 1 and 2)	in the Interim	Investee	v (Notes 1 and 2)
AUO	AULB	Malaysia	Holding company	59,058,698	59,058,698	1,882,189	100.00%	55,909,421	100.00%	2,789,496	2,789,496	Subsidiary
AUO	AUNL	Netherlands	Sales and sales support of TFT-	24,275	24,275	50	100.00%	66,537	100.00%	26,306	26,306	Subsidiary
			LCD panels
AUO	Konly	Taiwan ROC	Investment	4,227,070	4,227,070	299,764	100.00%	5,471,340	100.00%	132,133	132,133	Subsidiary
AUO	Ronly	Taiwan ROC	Investment	2,078,682	1,778,692	185,576	100.00%	2,277,770	100.00%	(76,865)	(76,865)	Subsidiary
AUO	DPTW	Taiwan ROC	Design, manufacturing, and sales	3,569,155	3,569,155	190,108	28.56%	2,835,886	28.56%	(1,240,799)	(354,420)	Subsidiary
			of TFT-LCD modules, backlight
			modules, TV set and related
			parts
AUO	ACTW	Taiwan ROC	Manufacturing and sales of	15,687,921	15,687,921	418,583	100.00%	2,686,843	100.00%	(91,475)	(91,475)	Subsidiary
			ingots and solar wafers
AUO	SREC	Taiwan ROC	Investment	379,040	379,040	37,904	32.01%	427,157	32.01%	107,060	34,274	Associate
AUO	Lextar	Taiwan ROC	Design, manufacturing, and sales	889,227	881,076	78,781	15.30%	1,549,703	15.30%	(629,358)	(95,746)	Associate
			of InGaN epi wafers and chips,
			and light emitting diode
			packages and modules
AUO	Qisda	Taiwan ROC	Manufacturing and sales of LCD products and projectors; providing medical services	9,505,477	-	335,231	17.04%	9,704,923	17.04%	-	-	Associate
												(Note 7)
AUO	SMI	Taiwan ROC	Sales and leasing of content	30,000	30,000	3,000	100.00%	14,235	100.00%	(4,012)	(4,012)	Subsidiary
			management system and
			hardware
AUO	UTI	Taiwan ROC	Planning, design and	200,000	100,000	20,000	100.00%	132,024	100.00%	(56,882)	(56,882)	Subsidiary
			development of construction for
			environmental protection and
			related project management
AUO	SSEC	Taiwan ROC	Investment	1,550,000	930,000	155,000	31.00%	1,586,817	31.00%	107,523	33,332	Associate
AUO	CQIL	Israel	Holding company	1,182,621	876,659	39,974	100.00%	881,300	100.00%	(42,400)	(42,400)	Subsidiary

83

				Original Investment Amount	Original Investment Amount	December 31, 2020	December 31, 2020	December 31, 2020	Maximum		Investor’s Share
										Net Income
Investor Coman	Investee Coman						Percentage	Carrying	Shareholding		of Profit (Loss) of Inestee
		Location	Main Activities	December 31,	December 31,					(Loss) of		Note
py	py			2020	2019	Shares	of Ownership	Amount (Notes 1 and 2)	in the Interim	Investee	v (Notes 1 and 2)
AUO	ADLINK	Taiwan ROC	Manufacturing and sales of	2,411,693	-	42,310	19.45%	2,311,727	19.45%	243,665	(20,893)	Associate
			hardware, software and
			peripheral devices of industrial
			computers
AUO AUO AUO AUO	DPGE ADHLD ADCM AHTW	Taiwan ROC Cayman Cayman Taiwan ROC	Renewable energy power generation Holding company Holding company Manufacturing, development and sales of medical equipment	7,000	-	700	100.00%	6,985	100.00%	(15)	(15)	Subsidiary
				-	-	-	70.00%	-	70.005%	-	-	Subsidiary
												(Note 5)
				-	-	-	100.00%	-	100.00%	-	-	Subsidiary
												(Note 5)
				5,000	-	500	100.00%	4,985	100.00%	(15)	(15)	Subsidiary
AUO	ADP	Taiwan ROC	Research, development and sales	1,000	-	100	100.00%	375	100.00%	(625)	(625)	Subsidiary
			of TFT-LCD panels
Konly	DPTW	Taiwan ROC	Design, manufacturing, and sales	703,795	703,795	42,598	6.40%	635,446	6.40%	(1,240,799)	(79,416)	Subsidiary
			of TFT-LCD modules, backlight
			modules, TV set and related
			parts
Konly	SREC	Taiwan ROC	Investment	17,760	17,760	1,776	1.50%	20,015	1.50%	107,060	1,606	Associate
Konly	Raydium	Taiwan ROC	IC Design	175,857	175,857	11,454	17.11%	809,137	17.11%	854,600	146,206	Associate
Konly	Daxin	Taiwan ROC	Research, manufacturing and	154,748	154,748	19,114	18.61%	539,718	18.61%	631,304	117,475	Associate
			sales of display related
			chemicals
Konly	Lextar	Taiwan ROC	Design, manufacturing, and sales	565,616	450,674	31,182	6.06%	628,659	6.06%	(629,358)	(32,417)	Associate
			of InGaN epi wafers and chips,
			and light emitting diode
			packages and modules
Konly	Qisda Ubitech Inc. SSEC WishMobile , Inc.	Taiwan ROC Taiwan ROC Taiwan ROC Taiwan ROC	Manufacturing and sales of LCD products and projectors; providing medical services Development and sales of software for POS system Investment Developing and providing CRM APP	437,875	-	17,817	0.91%	515,805	0.91%	-	-	Associate
												(Note 7)
Konly				27,000	27,000	357	24.41%	1,308	26.31%	(7,435)	(1,904)	Associate
Konly				100,000	60,000	10,000	2.00%	102,375	2.00%	107,523	2,150	Associate
Konly				15,000	15,000	5,625	12.50%	5,844	12.50%	1,991	249	Associate
Konly	SkyREC Ltd.	BVI	Data consulting service for retail	46,016	46,016	188	16.12%	2,097	16.12%	(14,423)	(2,326)	Associate

84

				Original Investment Amount	Original Investment Amount	December 31, 2020	December 31, 2020	December 31, 2020	Maximum		Investor’s Share
										Net Income
Investor Coman	Investee Coman						Percentage	Carrying	Shareholding		of Profit (Loss) of Inestee
		Location	Main Activities	December 31,	December 31,					(Loss) of		Note
py	py			2020	2019	Shares	of Ownership	Amount (Notes 1 and 2)	in the Interim	Investee	v (Notes 1 and 2)
Konly	ADLINK AUES IOC DPTW	Taiwan ROC Taiwan ROC Taiwan ROC Taiwan ROC	Manufacturing and sales of hardware, software and peripheral devices of industrial computers Services related to educational activities and site rental R&D and design of flexible electronics technology and processing equipment development Design, manufacturing, and sales of TFT-LCD modules, backlight modules, TV set and related parts	80,542	-	1,191	0.55%	24,718	0.55%	243,665	(55,704)	Associate
Konly				4,000	-	400	100.00%	4,000	100.00%	-	-	Subsidiary
Konly				20,000	-	1,000	5.00%	19,483	5.00%	(37,211)	(517)	Associate
Ronly				845,510	845,510	40,509	6.09%	604,283	6.09%	(1,240,799)	(75,521)	Subsidiary
Ronly	Daxin	Taiwan ROC	Research, manufacturing and	70,021	70,021	6,312	6.15%	178,235	6.15%	631,304	38,795	Associate
			sales of display related
			chemicals
Ronly	Lextar	Taiwan ROC	Design, manufacturing, and sales	323,431	323,431	34,338	6.67%	675,025	6.67%	(629,358)	(41,909)	Associate
			of InGaN epi wafers and chips,
			and light emitting diode
			packages and modules
Ronly	IOC	Taiwan ROC	R&D and design of flexible electronics technology and processing equipment development	68,400	-	3,420	17.10%	66,634	17.10%	(37,211)	(1,766)	Associate
DPTW	BVLB	Malaysia	Holding company	1,051,289	1,051,289	36,000	29.71%	243,885	29.71%	(9,160)	(2,721)	Subsidiary
DPTW	DPLB	Malaysia	Holding company	4,362,627	4,362,627	92,267	100.00%	5,595,202	100.00%	(256,864)	(237,730)	Subsidiary
DPTW	FHVI	BVI	Holding company	2,362,321	2,362,321	22,006	100.00%	3,846,168	100.00%	(216,776)	(220,204)	Subsidiary
DPTW	FFMI	Mauritius	Holding company	274,700	274,700	653	100.00%	101,001	100.00%	6,826	6,656	Subsidiary
DPTW	EFOP	Taiwan ROC	Manufacturing and sales of	338,729	338,729	33,873	49.00%	185,735	49.00%	14,318	7,016	Joint
			polymer plasticized raw									Venture
			materials
DPTW	Darwin	Thailand	International trade	3,740	3,740	40	40.00%	11,185	40.00%	3,357	1,343	Associate
	Summit
	Corporation
	Ltd.
ACTW	ACMK	Malaysia	Manufacturing and sales of solar	449,975	449,975	46,196	100.00%	393,218	100.00%	(75,081)	(75,081)	Subsidiary
			wafers

85

				Original Investment Amount	Original Investment Amount	December 31, 2020	December 31, 2020	December 31, 2020	Maximum		Investor’s Share
										Net Income
Investor Coman	Investee Coman						Percentage	Carrying	Shareholding		of Profit (Loss) of Inestee
		Location	Main Activities	December 31,	December 31,					(Loss) of		Note
py	py			2020	2019	Shares	of Ownership	Amount (Notes 1 and 2)	in the Interim	Investee	v (Notes 1 and 2)
ACTW	SDMC	Taiwan ROC	Holding company	1,988,488	1,988,488	116,836	100.0000%	1,945,204	100.0000%	134,827	166,521	Subsidiary
SDMC	M.Setek	Japan	Manufacturing and sales of	23,596,398	23,596,398	11,404,184	99.9991%	1,907,607	99.9991%	154,333	154,332	Subsidiary
			ingots
ADCM	ADHLD	Cayman	Holding company	-	-	-	30.00%	-	30.00%	-	-	Subsidiary
												(Note 5)
ADHLD	ADSG	Singapore	Holding company	-	-	-	100.00%	-	100.00%	-	-	Subsidiary
												(Note 6)
AULB	AUUS	United States	Sales and sales support of TFT-	USD 1,000	USD 1,000	1,000	100.00%	USD 2,741	100.00%	USD 678	USD 678	Subsidiary
			LCD panels
AULB	AUJP	Japan	Sales support of TFT-LCD	USD 276	USD 276	1	100.00%	USD 1,943	100.00%	USD 78	USD 78	Subsidiary
			panels
AULB	AUKR	South Korea	Sales support of TFT-LCD	USD 155	USD 155	-	100.00%	USD 1,026	100.00%	USD (50)	USD (50)	Subsidiary
			panels
AULB	AUCZ	Czech	Assembly of solar modules	USD 20,531	USD 20,531	-	100.00%	USD 11,275	100.00%	USD 60	USD 60	Subsidiary
		Republic
AULB	AUSK	Slovakia	Repairing of TFT-LCD modules	USD 1,359	USD 1,359	-	100.00%	USD 25,415	100.00%	USD 272	USD 272	Subsidiary
		Republic
AULB	AUST	Singapore	Manufacturing TFT-LCD panels	USD 241,487	USD 276,543	907,114	100.00%	USD 89,224	100.00%	USD 4,917	USD 4,917	Subsidiary
			based on low temperature
			polysilicon technology
AULB	AUVI	United States	Research and development and	USD 5,000	USD 5,000	5,000	100.00%	USD 6,001	100.00%	USD 127	USD 127	Subsidiary
			IP related business
AULB	BVLB	Malaysia	Holding company	USD 85,171	USD 85,171	85,171	70.29%	USD 20,241	70.29%	USD (310)	USD (218)	Subsidiary
AULB	AUSG	Singapore	Holding company and sales	USD 9,958	USD 48,321	266,268	100.00%	USD 6,870	100.00%	USD 2,322	USD 2,322	Subsidiary
			support of TFT-LCD panels
AUSG	AEUS	United States	Sales support of solar-related	USD 3,510	USD 3,510	9,510	100.00%	USD 3,088	100.00%	USD 2,274	USD 2,274	Subsidiary
			products
AUSG	ADPNL	Netherlands	Sales support of solar-related products; sales and sales support of TFT-LCD panels; holding company	USD 3,245	USD 45	-	100.00%	USD 3,398	100.00%	USD (76)	USD (76)	Subsidiary
DPLB	DPHK	Hong Kong	Holding company	USD 103,785	USD 103,785	10	100.00%	USD 198,466	100.00%	USD (6,892)	USD (6,892)	Subsidiary
												(Note 4)
DPLB	DPSK	Slovakia	Manufacturing and sales of	USD 4,216	USD 4,216	-	100.00%	USD 864	100.00%	USD (1,795)	USD (1,795)	Subsidiary
		Republic	automotive parts
FHVI	FTMI	Mauritius	Holding company	USD 6,503	USD 6,503	6,503	100.00%	USD 72,121	100.00%	USD (8,706)	USD (8,706)	Subsidiary
FHVI	FWSA	Samoa	Holding company	USD 19,000	USD 19,000	19,000	100.00%	USD 16,015	100.00%	USD 586	USD 586	Subsidiary

86

				Original Investment Amount	Original Investment Amount	December 31, 2020	December 31, 2020	December 31, 2020	Maximum		Investor’s Share
										Net Income
Investor Coman	Investee Coman						Percentage	Carrying	Shareholding		of Profit (Loss) of Inestee
		Location	Main Activities	December 31,	December 31,					(Loss) of		Note
py	py			2020	2019	Shares	of Ownership	Amount (Notes 1 and 2)	in the Interim	Investee	v (Notes 1 and 2)
FHVI	PMSA	Samoa	Holding company	USD 39,673	USD 39,673	31,993	100.00%	USD 48,956	100.00%	USD 789	USD 789	Subsidiary
M.Setek	Ichijo	Japan	Manufacturing of semiconductor	JPY 5,000	JPY 5,000	-	38.46%	-	38.46%	-	-	Associate
	Seisakusyo		equipment and related parts									(Note 3)
	Co., Ltd.
ADPNL	ADPUS	United States	Sales and sales support of TFT-	EUR 1,241	-	1	100.00%	EUR 1,220	100.00%	-	-	Subsidiary
			LCD panels
ADPNL	ADPJP	Japan	Sales support of TFT-LCD	EUR 414	-	1	100.00%	EUR 394	100.00%	-	-	Subsidiary
			panels
CQIL	CQHLD	United	Holding company	USD 29,118	USD 18,868	635,730	100.00%	USD 29,097	100.00%	USD (26)	USD (26)	Subsidiary
		Kingdom
CQHLD	CQUK	United	Sales and sales support of	GBP 1,874	GBP 1,874	-	100.00%	USD 139	100.00%	USD 4	USD 4	Subsidiary
		Kingdom	content management system
CQHLD	CQUS	United States	Sales of content management	USD 25,857	USD 15,607	13	100.00%	USD 14,126	100.00%	USD (1,474)	USD (1,474)	Subsidiary
			system and hardware
CQHLD	CQCA	Canada	Research and development of	CAD 1,310	CAD 1,310	-	100.00%	USD 660	100.00%	USD 123	USD 123	Subsidiary
			content management system
CQUS	JRUK	United	Development and sales of	USD 1,500	-	1	100.00%	USD 1,526	100.00%	USD 57	USD 57	Subsidiary
		Kingdom	content management system and
			sales of related hardware
CQUS	JRUS	United States	Development and sales of	USD 8,000	-	18	100.00%	USD 7,856	100.00%	USD (145)	USD (145)	Subsidiary
			content management system and
			sales of related hardware

Note 1: All inter-company transactions among AUO and its subsidiaries have been eliminated in the consolidated financial statements.

Note 2: Inclusive of the amortization of differences between the investment cost and the entity’s share of the net value of investee, and the effect of upstream and sidestream transactions.

Note 3: The carrying amount includes accumulated impairment loss.

Note 4: The registration of the alteration of DPHK’s common stock has not been completed.

Note 5: ADCM and ADHLD are new subsidiaries incorporated in August 2020. As of the end of December 2020, no capital injection has been made for these companies. Note 6: ADSG is a new subsidiary incorporated in October 2020. As of the end of December 2020, no capital injection has been made for this company.

Note 7: On and from December 31, 2020, the investment in Qisda has been accounted for using the equity method. See Note 6(6) for the relevant information.

87

AU OPTRONICS CORP. AND SUBSIDIARIES Information on Investment in Mainland China

For the year ended December 31, 2020

(Amount in thousands of New Taiwan Dollars and foreign currencies indicated)

Table 9

1. AUO ：

(1) Related information on investment in Mainland China

					Investment	Investment	Accumulated				I’	Carrying
				Accumulated Ofl f									Accumulated I
					Flows		Outflow of		%			Amount of
		Total Amount		utow o Investment			Investment	Net Income	Ownership	Maximum	nvestors	the	nward Remittance
Investee		f ii									Share of
		o Pad-n	Method of				from Taiwan	(Loss) of	through	Shareholding		Investment	of Earnings as of	Note
Company	Main Activities	Capital	Investment	from Taiwan as of January	Outflow	Inflow	as of	Investee 4	Direct or i	in the	Profit (Loss) of Investee	as of 1
		(Note 2)		1, 2020 (Note 2)			December 31, 2020 (Note 2)	(Notes and 5)	Indrect Investment	Interim	(Notes 4 and 5)	December 3, 2020 (Note 2)	December 31, 2020
A-Care	Design, development and sales	65,736	(Note 1)	-	-	-	-	(20,503)	100%	100%	(20,503)	19,209	-
	of software and hardware for
	health care industry
AUKS	Manufacturing and sales of TFT-	27,395,227	(Note 1)	13,971,566	-	-	13,971,566	535,802	51%	51%	273,259	5,342,537	-
	LCD panels
AUSH	Sales support of TFT-LCD	85,521	(Note 1)	28,507	-	-	28,507	(79,696)	100%	100%	(79,696)	342,049	-
	panels
AUSJ	Manufacturing and assembly of	3,078,756	(Note 1)	2,280,560	-	-	2,280,560	122,802	100%	100%	122,802	3,967,894	-
	TFTLCD modules; leasing
AUSZ	Manufacturing, assembly and	7,924,946	(Note 1)	5,701,400	-	-	5,701,400	1,392,835	100%	100%	1,392,835	16,367,899	-
	sales of TFT-LCD modules
AUXM	Manufacturing, assembly and	7,126,750	(Note 1)	7,126,750	-	-	7,126,750	867,929	100%	100%	867,929	14,493,546	-
	sales of TFT-LCD modules
BVHF	Manufacturing and sales of	2,093,839	(Note 1)	-	-	-	-	(8,870)	100%	100%	(8,870)	819,362	-	Note 6
	liquid crystal products and
	related parts
BVXM	Manufacturing and sales of	2,629,440	(Note 1)	-	-	-	-	16,506	100%	100%	16,506	1,309,594	-
	liquid crystal products and
	related parts
EDT	Design and sales of software and	21,912	(Note 1)	-	-	-	-	(8,955)	100%	100%	(8,955)	7,971	-
	hardware integration system and
	equipment relating to intelligent
	manufacturing
MIS	Development and licensing of	87,648	(Note 1)	-	-	-	-	(40,387)	100%	100%	(40,387)	33,252	-
	software relating to intelligent
	manufacturing, and related
	consultingservices

88

					Investment	Investment	Accumulated				I’	Carrying
				Accumulated Ofl f									Accumulated I
					Flows		Outflow of		%			Amount of
		Total Amount		utow o Investment			Investment	Net Income	Ownership	Maximum	nvestors	the	nward Remittance
Investee		f ii									Share of
		o Pad-n	Method of				from Taiwan	(Loss) of	through	Shareholding		Investment	of Earnings as of	Note
Company	Main Activities	Capital	Investment	from Taiwan as of January	Outflow	Inflow	as of	Investee 4	Direct or i	in the	Profit (Loss) of Investee	as of 1
		(Note 2)		1, 2020 (Note 2)			December 31, 2020 (Note 2)	(Notes and 5)	Indrect Investment	Interim	(Notes 4 and 5)	December 3, 2020 (Note 2)	December 31, 2020
TYSZ	Design, manufacturing and sales	219,120	(Note 1)	-	-	-	-	(23,057)	50%	50%	(11,528)	97,778	-
	of large-size touch LCD
	modules
UFSD	Planning, design and	8,765	(Note 1)	-	-	-	-	(3,396)	100%	100%	(3,396)	2,420	-
	development of construction for
	environmental protection and
	related project management
UFSZ	Planning, design and	52,589	(Note 1)	-	-	-	-	(12,956)	100%	100%	(12,956)	31,846	-
	development of construction for
	environmental protection and
	related project management
ADSZ	Management consulting	-	(Note 1)	-	-	-	-	-	100%	100%	-	-	-	Note 7

(2) Upper limit on investment in Mainland China

(2) Upper limit on investment in Mainland China
Accumulated Investment in Mainland China as of December 31, 2020 (Note 2)	Investment Amounts Authorized by the Investment Commission, MOEA (Note 2)	Upper Limit on Investment Stipulated by the Investment Commission, MOEA (Note 3)
29,108,783 (USD 1,021,110)	38,534,120 (USD 1,344,003 and HKD 60,000)	116,274,219

Note 1: Indirect investments in Mainland China through companies registered in a third region.

Note 2: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date.

• Note 3: Pursuant to the Regulations Governing Permission for Investment and Technical Cooperation in the Mainland Area, AUO’s accumulated investments in Mainland China did not exceed the upper limit on investment amount or ratio stipulated by the Investment Commission, Ministry of Economic Affairs (“MOEA”).

• Note 4: Amounts were recognized based on the investees’ audited financial statements except for TYSZ.

• Note 5: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the average exchange rates for the year of 2020. Note 6: BVHF is 100% owned by BVLB, a jointly-owned subsidiary of AUO and DPTW.

Note 7: ADSZ is a new subsidiary incorporated in December 2020. As of the end of December 2020, no capital injection has been made for this company.

89

2. DPTW:

(1) Related information on investment in Mainland China

	Main Activities	Ttl At			Investment	Investment	Accumulated			Maximum	Investor’s	Carrying		Note
				Accumulated Outflow of									Accumulated Inward
					Flows		Outflow of		%			Amount of
Investee		oa moun of Paid-in Caital	Method of	Investment from Taiwan			Investment from Taiwan	Net Income (Loss) of	Ownership through	Shareholding	Share of Profit (Loss)	the Investment	Remittance of Earnings as of
Company		p (Note 4)	Investment	as of January 1, 2020	Outflow (Note 4)	Inflow (Note 4)	as of December 31,	Investee (Notes 2 and 6)	Direct or Indirect	in the Interim	of Investee (Notes 2 and 6)	as of December	December 31, 2020
				(Note 4)			2020 (Note 4)		Investment			31, 2020 (Note 4)	(Note 4)
BVHF	Manufacturing and sales of	2,093,839	(Note 1)	456,112	-	-	456,112	(8,870)	29.71%	29.71%	(8,870)	819,362	-	Note 5
	liquid crystal products and
	related parts
DPSZ	Manufacturing and sales of	712,675	(Note 1)	427,605	-	-	427,605	(58,256)	100%	100%	(58,256)	1,309,155	1,309,439	Note 9
	backlight modules and related
	parts
DPXM	Manufacturing and sales of	1,995,490	(Note 1)	1,995,490	-	-	1,995,490	(139,536)	100%	100%	(139,536)	4,348,510	1,475,238
	backlight modules and related
	parts
FHWJ	Manufacturing and sales of	185,296	(Note 1)	233,757	-	-	233,757	6,826	100%	100%	6,826	50,955	-
	backlight modules and related
	parts
FPWJ	Manufacturing, sales and trading of precision plastic parts	826,703	(Note 1)	541,633	-	-	541,633	26,431	100%	100%	26,431	681,619	-	Note 8
FTKS	Manufacturing and sales of	1,026,252	(Note 1)	1,026,252	-	-	1,026,252	23,320	100%	100%	23,320	1,395,576	-
	backlight modules and related
	parts
FTWJ	Manufacturing and sales of	997,745	(Note 1)	185,296	-	-	185,296	(266,528)	100%	100%	(266,528)	1,830,825	401,223	Note 7
	backlight modules and related
	parts

(2) Upper limit on investment in Mainland China

Accumulated Investment in Mainland China as of December 31, 2020 (Note 4)	Investment Amounts Authorized by the Investment Commission, MOEA (Note 4)	Upper Limit on Investment Stipulated by the Investment Commission, MOEA (Note 3)
4,866,145 (USD 170,700)	5,008,252 (USD 175,685)	5,956,947

Note 1: Indirect investments in Mainland China through companies registered in a third region. Note 2: Amounts were recognized based on the investees’ audited financial statements.

90

• Note 3: Pursuant to the Regulations Governing Permission for Investment and Technical Cooperation in the Mainland Area, DPTW’s accumulated investments in Mainland China did not exceed the upper limit on investment amount or ratio stipulated by the Investment Commission, Ministry of Economic Affairs (“MOEA”).

• Note 4: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the exchange rates at the reporting date.

• Note 5: BVHF is 100% owned by BVLB, a jointly-owned subsidiary of AUO and DPTW. Accordingly, the share of profit (loss) of investee and the carrying amount of the investment as of December 31, 2020 disclosed in the table are presented based on 100% held.

• Note 6: Amounts denominated in foreign currencies are translated into New Taiwan Dollars using the average exchange rates for the year of 2020.

• Note 7: The amount of paid-in capital includes the capitalization of retained earnings amounting to USD28,500 thousand for the years from 2005 to 2007.

• Note 8: The amount of paid-in capital includes the capital injection of USD10,000 thousand from the offshore holding company, which was originally from FTWJ’s appropriation of earnings.

• Note 9: The amount of paid-in capital includes the capital injection of USD1,000 thousand from DPLB in 2010 and the capitalization of retained earnings of USD9,000 thousand from DPSZ in 2012.

91

AU OPTRONICS CORP.

Statement of Cash and Cash Equivalents

December 31, 2021

(Expressed in thousands of New Taiwan Dollars,

unless otherwise indicated)

Item Cash on hand Cash in banks	Description Amount $ 8 Checking accounts 37,262 Demand deposits 14,517,860 Foreign currency deposits (note) USD: 460,883 thousand JPY: 1,946,930 thousand EUR: 21,398 thousand CNY: 18 thousand HKD: 2,311 thousand 13,910,572 Time deposits 6,200,000 Foreign currency time deposits (note) USD: 34,500 thousand 955,236 $ 35,620,938

Note: Exchange rate at balance sheet date was as follows: USD: 27.688 JPY: 0.2409 EUR: 31.4203 CNY: 4.3478 HKD: 3.5513

92

AU OPTRONICS CORP.

－ Statement of Financial Assets at FVTPL Current

December 31, 2021

Please refer to Note 6(2) to this parent company only financial statements for the details.

－ Statement of Financial Assets at Amortized Cost Current

Please refer to Note 6(4) to this parent company only financial statements for the details.

93

AU OPTRONICS CORP.

Statement of Accounts Receivable

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Customer Name Customer A Customer B Customer C Customer D Customer E Others (less than 5% for each customer) Less: loss allowance	Description From operating activities From operating activities From operating activities From operating activities From operating activities From operating activities	Amount Remark $ 10,444,734 10,299,516 7,233,881 7,171,975 3,505,202 10,328,836 (485) $ 48,983,659

Statement of Inventories

Item Finished goods Work-in-progress Raw materials	Amount Book value (note) Net realizable value Remark $ 8,613,195 12,870,467 For the determination of net realizable 10,293,672 13,649,151 value, please refer to Note 4(7) to this 2,784,685 2,828,824 parent company only financial $ 21,691,552 29,348,442 statements.
	Book value (note) $ 8,613,195 10,293,672 2,784,685 $ 21,691,552

Note ： Provision of inventory obsolescence has been deducted.

94

AU OPTRONICS CORP.

－ Statement of Changes in Financial Assets at FVOCI Noncurrent

December 31, 2021

(Expressed in thousands of New Taiwan Dollars and share in thousands)

Name of financial instrument SINTRONES	Beginning balance Shares Fair value - $ -	Additions (Deductions)	Additions (Deductions)		Gains (losses) on valuation Amount (25,518)	Ending balance	Ending balance
		Shares 1,299	Amount			Shares 1,299	Fair value
			91,507				65,989

Statement of Other Noncurrent Assets

Please refer to Note 6(12) to this parent company only financial statements for the details.

95

AU OPTRONICS CORP.

Statement of Changes in Investments in Equity-accounted Investees

For the year ended December 31, 2021

(Expressed in thousands of New Taiwan Dollars unless otherwise indicated, and share in thousands)

Investee Name	Beginning balance (Note (a)) Shares Amount 1,882,189 $ 55,909,421 299,764 5,471,340 100 375 190,108 2,835,886 418,583 2,686,843 185,576 2,277,770 39,974 881,300 - - 20,000 132,024 50 66,537 - - - - 3,000 14,235 700 6,985 500 4,985 - - 70,287,701 335,231 9,704,923 - - 42,310 2,311,727 155,000 1,586,817 78,781 1,549,703 37,904 427,157 15,580,327 $ 85,868,028	Additions (Deductions) (Note (b)) Shares Amount 625,000 17,432,860 109,244 1,694,680 - - - - - - 193,000 2,099,230 - - 11,300 317,063 10,000 100,000 - - 3,000 30,000 2,700 76,437 - 34,300 343,000 - (9,021) (90,212) 22,003,058 - - 4,654 390,820 - - 62,000 620,000 - - - - 1,010,820 23,013,878	Reclassification (Note (c)) Shares Amount - - - - 36,856 368,555 - - - - - - - - - - - - - - - - - - - - - 37,904 427,157 795,712 - - 21,665 1,793,854 - - - - (78,781) (1,549,703) (37,904) (427,157) (183,006) 612,706	Share of profit (loss) 5,354,435 1,199,670 3,304,816 (185,445) 1,051,352 202,853 12,753 (75,933) (39,762) (565) (9,066) (31,150) (7,260) 102 (1,153) 35,555 10,811,202 1,614,449 26,893 (51,223) 29,948 - - 1,620,067 12,431,269	Cash dividend - (205,220) - - - - - - - - - - - - - (30,846) (236,066) (502,846) - (42,310) (29,999) - - (575,155) (811,221)	Capital surplus (2,080,669) 33,036 (2,681) - - (94,227) - (12,866) - - - 9,670 - - - - (2,147,737) (106,390) 49,901 - 4,116 - - (52,373) (2,200,110)	Cumulative translation differences (873,526) (32,141) (669) (18,782) (266,114) 8,071 (4,890) (2,870) - (6,861) - (1,101) - - - - (1,198,883) (89,955) (15,686) 3,731 - - - (101,910) (1,300,793)	Unrealized gains (losses) on financial assets at fair value through other comprehensive income - 51,820 - - - 6,734 - - - - - - - - - - 58,554 152,222 2,863 (2,043) - - - 153,042 211,596	Other adjustments (Note(d)) (7,700,011) (5,560) 33,046 - - (3,879) - 3,446 - - - 823 - - - - (7,672,135) 35,403 (344) (633) - - - 34,426 (7,637,709)	Ending balance (Note (a)) Shares Amount % of Ownership 2,507,189 68,042,510 100.00 409,008 8,207,625 100.00 36,956 3,703,442 100.00 190,108 2,631,659 28.56 418,583 3,472,081 100.00 378,576 4,496,552 100.00 39,974 889,163 100.00 11,300 228,840 80.71 30,000 192,262 100.00 50 59,111 100.00 3,000 20,934 100.00 2,700 54,679 100.00 3,000 6,975 100.00 35,000 350,087 100.00 500 3,832 100.00 28,883 341,654 32.01 92,701,406 335,231 10,807,806 17.04 26,319 2,248,301 3.86 42,310 2,219,249 19.45 217,000 2,210,882 31.00 - - - - - - 17,486,238 110,187,644	Ending balance (Note (a)) Shares Amount % of Ownership 2,507,189 68,042,510 100.00 409,008 8,207,625 100.00 36,956 3,703,442 100.00 190,108 2,631,659 28.56 418,583 3,472,081 100.00 378,576 4,496,552 100.00 39,974 889,163 100.00 11,300 228,840 80.71 30,000 192,262 100.00 50 59,111 100.00 3,000 20,934 100.00 2,700 54,679 100.00 3,000 6,975 100.00 35,000 350,087 100.00 500 3,832 100.00 28,883 341,654 32.01 92,701,406 335,231 10,807,806 17.04 26,319 2,248,301 3.86 42,310 2,219,249 19.45 217,000 2,210,882 31.00 - - - - - - 17,486,238 110,187,644	Marke net as	t value or set value Totalprice Guarantee orpledged 68,042,510 None 8,207,625 None 3,703,442 None 3,041,727 None 3,472,081 None 4,469,552 None 288,838 None 228,840 None 192,262 None 59,111 None 20,934 None 54,679 None 6,975 None 350,087 None 3,832 None 341,654 None 92,484,149 10,207,769 None 2,018,659 None 2,741,714 None 2,210,882 None - None - 17,179,024
		Shares 625,000 109,244 - - - 193,000 - 11,300 10,000 - 3,000 2,700 34,300 (9,021) - 4,654 - 62,000 - -	Shares - - 36,856 - - - - - - - - - 37,904 - 21,665 - - (78,781) (37,904)							Shares 2,507,189 409,008 36,956 190,108 418,583 378,576 39,974 11,300 30,000 50 3,000 2,700 3,000 35,000 500 28,883 335,231 26,319 42,310 217,000 - -	Amount 68,042,510 8,207,625 3,703,442 2,631,659 3,472,081 4,496,552 889,163 228,840 192,262 59,111 20,934 54,679 6,975 350,087 3,832 341,654	Unit price - - - 16.00 - - - - - - - - 30.45 76.70 64.80 - - -
Subsidiaries: AUOLB Konly ADP DPTW ACTW Ronly ComQi Ltd. ADTHLD AETTW AUONL ACTTW ADTCM S4M DPGE AHTW SREC Associates: Qisda Ennostar ADLINK SSEC Lextar SREC
											92,701,406
											10,807,806 2,248,301 2,219,249 2,210,882 - -
											17,486,238
											110,187,644

Note (a): The amount is net of accumulated impairment.

Note (b): Additions (deductions) includes: (1) The Company participated in the capital increase of AUOLB, Konly, Ronly, AETTW, DPGE, ADTHLD, ADTCM and SSEC; (2) ACTTW, 100% owned by the Company, was incorporated in February 2021; (3) SREC returned the proceeds due to capital deduction; (4) The Company acquired total of 0.68% equity interest in Ennostar.

Note (c): (1) The Company split the net operating assets amounted to $368,555 thousand in exchange for 36,856 thousand shares, with par value of NT$10 per share, of common shares of ADP; (2) SREC was treated as the subsidiary of the Company from January 2021. Please refer to the consolidated financial statements for the years ended December 31, 2021 and 2020 for the details; (3) Lextar carried out a joint share exchange with Epistar for a newly incorporated company, Ennostar in January 2021. Please refer to Note 6(7) for the details.

Note (d): Including share of remeasurement of defined benefit obligation and share-based payments of subsidiaries and associates.

96

AU OPTRONICS CORP.

Statement of Changes in Property, Plant and Equipment

Please refer to Note 6(8) to this parent company only financial statements for the details.

Statement of Changes in Right-of-use Assets

For the year ended December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Item	Beginning balance $ 9,534,832 166,667 9,701,499 849,282 62,142 911,424 $ 8,790,075	Additions - - - 414,656 39,599 454,255 (454,255)	Deductions (10,131) - (10,131) - - - (10,131)	Ending balance
Cost: Land Buildings Accumulated Depreciation: Land Buildings Net carrying amounts				9,524,701 166,667
				9,691,368
				1,263,938 101,741
				1,365,679
				8,325,689

97

AU OPTRONICS CORP.

Statement of Changes in Intangible Assets

Please refer to Note 6(11) to this parent company only financial statements for the details.

Statement of Accounts Payable

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Vendor name Company I Company J Company K Company L Others (less than 5% for each vendor)	Description From Operating activities From Operating activities From Operating activities From Operating activities From Operating activities	Amount Remark $ 2,621,725 2,512,579 1,438,865 1,418,213 17,571,681 $ 25,563,063

98

AU OPTRONICS CORP.

Statement of Other Current Liabilities

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Item Remuneration to employees payable Accrued payroll and bonus Refund liabilities Contract liabilities Accrued royalty and others	Description	Amount Remark $ 6,339,435 5,619,598 3,637,460 3,051,364 9,449,790 $ 28,097,647

Statement of Equipment and Construction Payable

	Vendor name		Amount
Company W		$	183,640
Company X			153,939
Company Y			130,067
Others (less than 5% for each vendor)			1,569,733
		$	2,037,379

99

AU OPTRONICS CORP.

Statement of Long-term Borrowings

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Financial institution Limit of credit facility Bank of Taiwan (agent bank of Syndicated loan) 42,000,000 Bank of Taiwan (agent bank of Syndicated loan) 23,000,000 Bank of Taiwan (agent bank of Syndicated loan) 32,500,000 Taipei Fubon Bank 6,000,000 Land Bank 4,500,000 First Bank 4,600,000 Chang Hwa Bank 4,000,000 KGI Bank 1,200,000 Taiwan Cooperative Bank 3,500,000 Hua Nan Bank 1,000,000 Taiwan Business Bank 1,250,000 Subtotal Less: transaction costs Less: current installments of long-term borrowings	Amount $ 12,000,000 4,600,000 9,750,000 4,000,000 2,950,000 2,600,000 1,000,000 1,200,000 1,500,000 1,000,000 450,000 41,050,000 (402,755) (12,267,653) $ 28,379,592	Duration and repayment terms From Feb. 2019 to Feb. 2024 From Mar. 2019 to Apr. 2023 From Oct. 2021 to Oct 2025 From Dec. 2019 to Dec. 2024 From Nov. 2019 to Nov. 2026 From Dec. 2019 to Dec. 2026 From Jan. 2020 to Dec. 2024 From Jun. 2021 to May. 2024 From Mar. 2020 to Mar. 2025 From Jun. 2020 to Jun. 2025 From Jun. 2020 to Jun. 2025	Interest rate Collateral Note 8 Note 8 Note 8 Note 8 Note 8 Note 8 Note 8 Unsecured loans Note 8 Note 8 Note 8 0.7500%~ 1.7895%

100

AU OPTRONICS CORP.

Statement of Lease Liabilities

December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Item Land Buildings	Durations From Sep. 2001 to Dec. 2045 From Dec. 2018 to May 2025	Discount Rate Amount 1.8203~1.8853% $ 8,464,547 1.7381%~1.8853% 67,439 $ 8,531,986

Statement of Net Revenue For the year ended December 31, 2021

Item TFT-LCD Panels ten inches and above in diagonal length TFT-LCD Panels under ten inches in diagonal length Sales of raw material and others Total	Quantity (Panels in thousands) 136,130 92,365 396,021	Amount Remark $ 290,071,405 27,147,783 14,011,367 $ 331,230,555

101

AU OPTRONICS CORP.

Statement of Cost of Sales

For the year ended December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Item		Amount
Raw materials used
Raw materials, beginning of year (Note)	$	3,436,822
Add: Purchases		81,608,513
Less: Raw materials, end of year (Note)		(4,226,353)
Sale of raw materials		(3,370,723)
Transferred to other expenses and others		(28,460,131)
Raw materials used		48,988,128
Direct labor		13,743,763
Manufacturing expenses		100,501,529
Manufacturing cost		163,233,420
Work in process, beginning of year (Note)		10,280,519
Add: Purchases		92,119,497
Less: Work in process, end of year (Note)		(11,283,746)
Transferred to other expenses and others		(4,249,493)
Cost of finished goods		250,100,197
Finished goods, beginning of year (Note)		7,885,407
Add: Purchases		958,631
Less: Finished goods, end of year (Note)		(9,663,834)
Transferred to other expenses and others		(1,721,120)
Cost of goods sold		247,559,281
Add: Cost of raw materials sold		3,370,723
Other operating cost		7,905,633
Cost of idle capacity		605,644
Inventories write-down		865,868
Cost of Sales	$	260,307,149

Note: The amounts were stated at cost.

102

AU OPTRONICS CORP.

Statement of Selling and Distribution Expenses

For the year ended December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Item Salary expenses Freight expenses Warranty expenses Others (less than 5% for each item)	Description	Amount Remark $ 1,394,170 1,283,409 530,614 332,356 $ 3,540,549

Statement of General and Administrative Expenses

Item Salary expenses Compensation costs Professional service fees Depreciation expenses Others (less than 5% for each item)	Description	Amount Remark $ 2,352,601 793,463 544,877 335,271 2,330,883 $ 6,357,095

103

AU OPTRONICS CORP.

Statement of Research and Development Expenses

For the year ended December 31, 2021

(Expressed in thousands of New Taiwan Dollars)

Item Salary expenses Depreciation expenses Indirect material expenses Others (less than 5% for each item)	Description	Amount Remark $ 4,981,741 2,499,618 1,194,911 1,416,814 $ 10,093,084