Alpine 2008 Annual Report Download - page 22

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Depreciation of buildings purchased after March 31, 1998, is computed
using the straight-line method by the Company and its domestic
subsidiaries, because of an amendment to Japanese tax regulations.
From the year ended March 31, 2008, in accordance with the amendment
to the Corporate Tax Law, the Company and its consolidated subsidiaries
changed their depreciation method for tangible fixed assets acquired on
or after April 1, 2007 to a method based on the amended Corporate Tax
Law.
As a result, in comparison to the previous accounting method, operating
income and income before income taxes and minority interests decreased
¥164 million (US$2 million).
In addition, due to the amendment to the Corporate Tax Law, for tangible
fixed assets which had been acquired on or before March 31, 2007, the
remaining book value of the assets based on the previous Corporate Tax
Law is evenly depreciated over the five years starting from the period
subsequent to the year the depreciable limits have reached.
As a result, in comparison to the previous accounting method, operating
income and income before income taxes and minority interests decreased
¥97 million (US$1 million).
Estimated useful lives are as follows:
Buildings 2 – 50 years
Machinery 2 – 15 years
Equipment 2 – 20 years
(Dies 1 – 2 year)
(8) Land revaluation
Pursuant to “Law Concerning Revaluation of Land” and the revisions
thereof, the Company elected one-time revaluation of land used for
business operations at fair value as of March 31, 2002. Due to the
revaluation, book value of the land was reduced by ¥1,395 million to
¥3,212 million as of March 31, 2002, and the related unrealized loss is
reported as a separate component of net assets. According to the revised
Law, the Company is not permitted to revalue the land at any time for
subsequent declines or appreciation in the fair values of the land. The
excess of the revalued amounts of the revalued land over the fair values
as of March 31, 2008 and 2007 amounted to ¥1,063 million (US$10,610
thousand) and ¥963 million, respectively.
(9) Certain lease transactions
Finance leases which do not transfer ownership of leased assets to
lessees are not capitalized and are accounted for in the same manner as
operating leases.
(10) Employees’ bonuses
Liabilities for employees’ bonuses are mainly provided based on the
estimate of the amounts to be paid in the future, based on the accrual
basis at the balance sheet date.
(11) Directors’ bonuses
Liabilities for directors’ bonuses are mainly provided based on the estimate
of the amounts to be paid in the future, based on the accrual basis at the
balance sheet date.
Effective from the year ended March 31, 2007, the Company adopted the
new accounting standard for directors’ bonuses (“Accounting Standard
for Directors’ Bonuses” issued by the Accounting Standards Board of
Japan). Under this standard, directors’ bonuses are expensed as incurred
and shown under selling, general and administrative expenses, whereas
the Company previously accounted for them as a deduction of retained
earnings.
As a result of the adopting the standard and guidance, operating income
and income before income taxes and minority interests for the fiscal year
ended March 31, 2007 decreased by ¥63 million.
(12) Employees’ severance and retirement benefits
The Company and its five domestic subsidiaries have unfunded lump-sum
benefit and funded pension plans covering all employees. Under the terms
of the plans, eligible employees are entitled, upon reaching mandatory
retirement age or earlier voluntary severance, to severance and retirement
benefit payments based on the length of their services, base salary at the
time of termination and cause of termination.
Allowances and expenses for severance and retirement benefits are
determined based on the amounts actuarially calculated using certain
assumptions. The Companies provide allowance for employees’ severance
and retirement benefits based on the estimated amount of projected
benefit obligation and the fair value of the plan assets at the balance sheet
date.
Return of substitutional portion of Welfare Pension Insurance
Employees of Japanese companies compulsorily join the Welfare Pension
Insurance Scheme operated by the government. Employers are legally
required to deduct employees’ welfare pension insurance contributions
from their payroll and to pay them to the government together with
employers’ own contributions. For companies that have established their
own Employees’ Pension Fund which meets certain legal requirements,
it is possible to transfer a part of their welfare pension insurance
contributions (so-called substitutional portion of the government’s Welfare
Pension Insurance Scheme) to their own Employees’ Pension Fund under
the government’s permission and supervision.
Based on the newly enacted Defined Benefit Corporate Pension Law, the
Company decided to restructure its Employees’ Pension Fund and was
permitted by the Minister of Health, Labour and Welfare on September 1,
2004 to transfer back the obligation for payments for prior service in the
substitutional portion of the Welfare Pension Insurance Scheme. On June
27, 2005, the Company transferred back the obligation to the government.
In the year ended March 31, 2006, the Company recognized a gain on
return of the substitutional portion of Welfare Pension Insurance amounting
to ¥10 million (US$85 thousand).
Also, on February 28, 2005, the Company made further changes in
the retirement pension scheme, by introducing a new business annuity
scheme, called the Cash Balance Plan. Based on the Defined Contribution
Corporate Pension Law, the Company shifted a part of its pension
scheme, on April 2, 2005, to the alternatives of defined contribution or
prepaid retirement benefits.
(13) Directors’ severance and retirement benefits
The Company and its domestic consolidated subsidiaries provide for
retirement benefits for directors, based on the bylaws and on the accrual
basis at the balance sheet date.
(14) Foreign currency translation
Receivables, payables and investments denominated in foreign currencies
are translated into Japanese yen using the exchange rate at the balance