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Notes to Consolidated Financial Statements
Note 1
Business and Summary of Significant Accounting Principles

Description of Business

The TDC Company started from focusing on manufacturing as a small PC OEM and a supplier for some big electronics, now, is becoming one of a famous company that is able to R&D, production our own brand cellphones. In 2010, we have successfully enlarge our market share to 15%.We have been listed in A-share in China.

Property, Plant and Equipment

All property, plant and equipment are stated at cost and depreciated over their useful lives. All depreciation expense incurred is derived using the straight line method. We do not depreciate our land. We estimate our useful life for our assets accordingly; equipments have a 10 years life. The estimated lives of our assets are reviewed periodically to determine if any impairment is present so the useful lives and depreciation can be adjusted for accuracy.

Goodwill and Intangible Assets

Intangible assets consist of patents, customer relationships as well as acquired trademarks and trade names. Patents and customer relationships are limited life intangibles and are amortized over their useful lives using the straight-line method of amortization of 2-20 and 3-15 years respectively. Goodwill, trademarks and trade names have indefinite lives and are not amortized yet are tested annually for impairment. Whenever events and circumstances change, the carrying amount of intangibles may not be recoverable. Indefinite life intangibles are reviewed for impairment by comparing the assets carrying amount to its fair value. If the assets carrying amount exceeds its fair value, an impairment charge is recognized.

Revenue Recognition

Sales are recognized when revenue is realized or realizable and has been earned. Most revenue transactions represent sales of inventory. Our

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