Brother International 2014 Annual Report Download - page 32

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Brother Industries, Ltd. and Consolidated Subsidiaries
Year ended March 31, 2014 (10) Long-lived Assets
The Group reviews its long-lived assets for impairment whenever events or changes in circumstance indicate the carrying amount of an asset or asset group may not be
recoverable. An impairment loss is recognized if the carrying amount of an asset or asset group exceeds the sum of the undiscounted future cash flows expected to result
from the continued use and eventual disposition of the asset or asset group. The impairment loss would be measured as the amount by which the carrying amount of the
asset exceeds its recoverable amount, which is the higher of the discounted cash flows from the continued use and eventual disposition of the asset or the net selling price
at disposition.
(11) Other Investments and Assets
Intangible assets and goodwill are carried at cost less accumulated amortization, which is calculated by the straight-line method.
(12) Allowance for Doubtful Accounts
The allowance for doubtful accounts is stated in amounts considered to be appropriate based on the companies’ past credit loss experience and an evaluation of potential
losses in the receivables outstanding.
(13) Bonuses to Directors and Audit & Supervisory Board Members
Bonuses to directors and Audit & Supervisory Board Members are accrued at the end of the year to which such bonuses are attributable.
(14) Warranty Reserve
The Group provided a warranty reserve for repair service to cover all repair expenses based on its past warranty experience.
The warranty reserve was included in accrued expenses and amounted to ¥4,801 million ($46,612 thousand) and ¥3,902 million at March 31, 2014 and 2013,
respectively.
(15) Retirement and Pension Plans
(i) Employees’ Retirement Benefits
The Company has a contributory funded defined benefit pension plan and a defined contribution pension plan covering substantially all of its employees. Domestic consoli-
dated subsidiaries have funded and unfunded retirement benefit plans or defined contribution pension plans. Also, certain foreign subsidiaries have defined benefit pension
plans and defined contribution pension plans.
The Company and certain consolidated subsidiaries account for the liability for retirement benefits based on projected benefit obligations and plan assets at the con-
solidated balance sheet date. Certain small subsidiaries apply the simplified method to state the liability at the amount which would be paid if employees retired, less plan
assets at the consolidated balance sheet date.
The Company contributed certain available-for-sale securities to the employee retirement benefit trust for the Company’s contributory pension plans. The securities
held in this trust are qualified as plan assets. However, because it was expected that the fund status would remain in surplus, the Company cancelled a certain portion of
the asset and transferred it in February 2006.
In May 2012, the ASBJ issued ASBJ Statement No. 26, “Accounting Standard for Retirement Benefits” and ASBJ Guidance No. 25, “Guidance on Accounting Standard for
Retirement Benefits,” which replaced the accounting standard for retirement benefits that had been issued by the Business Accounting Council in 1998 with an effective
date of April 1, 2000, and the other related practical guidance, and were followed by partial amendments from time to time through 2009.
(a) Under the revised accounting standard, actuarial gains and losses and past service costs that are yet to be recognized in profit or loss are recognized within equity
(accumulated other comprehensive income), after adjusting for tax effects, and any resulting deficit or surplus is recognized as a liability (liability for retirement ben-
efits) or asset (asset for retirement benefits).
Notes to Consolidated Financial Statements