Casio 2013 Annual Report Download - page 25

The derivative transactions are executed and managed by the Company’s Finance Department in
accordance with the established policies and within the specified limits on the amounts of derivative
transactions allowed.
Allowance for doubtful accounts
The allowance for doubtful accounts is provided at an amount sufficient to cover probable losses on the
collection of receivables. For the Group, the amount of the allowance is determined based on past write-off
experience and an estimated amount of probable bad debt based on a review of the collectability of indi-
vidual receivables.
Inventories
The Company and its consolidated subsidiaries state inventories primarily at the lower of cost (first-in, first-
out) or net realizable values at year-end.
Property, plant and equipment
Property, plant and equipment is stated at cost. Depreciation is principally determined by the declining-
balance method at rates based on estimated useful lives except for the following buildings. The building of
the head office of the Company and buildings, excluding building fixtures, acquired on or after April 1,
1998 are depreciated using the straight-line method. The depreciation period ranges from 2 years to 60
years for buildings and structures, from 2 years to 12 years for machinery, equipment and vehicles, and
from 1 year to 20 years for tools, furniture and fixtures.
(Changes in accounting policies that are difficult to distinguish from changes in accounting estimates)
Effective from the fiscal year ended March 31, 2013, the Company and its consolidated subsidiaries in
Japan have recorded depreciation for property, plant and equipment acquired on or after April 1, 2012
using the depreciation method based on the amended Corporation Tax Act, in accordance with the amend-
ment of the Corporation Tax Act. This change had a negligible impact on earnings.
Software costs
Software is categorized by the following purposes and amortized using the following two methods.
Software for market sales: The production costs for the master product are capitalized and amortized
over no more than 3 years on a projected revenue basis.
Software for internal use: The acquisition costs of software for internal use are amortized over 5 years
using the straight-line method.
The amount of software costs capitalized is included in other assets in the consolidated balance sheets.
Lease assets
(Finance leases which do not transfer ownership of the leased property to the lessee)
Lease assets are divided into the two principal categories of property, plant and equipment and intangible
assets included in other under investments and other assets. The former consists primarily of facilities
(machinery and equipment, tools, furniture and fixtures) while the latter consists of software. The assets are
depreciated on a straight-line basis on the assumption that the lease term is the useful life and the residual
value is zero.
Provision for retirement benefits
Under the terms of the employees’ severance and retirement plan, eligible employees are entitled under
most circumstances, upon mandatory retirement or earlier voluntary severance, to severance payments
based on compensation at the time of severance and years of service.
For employees’ severance and retirement benefits, the Company and some of its consolidated subsidiar-
ies in Japan provide a defined benefit plan.
The Company and its consolidated subsidiaries in Japan received permission from the Minister of Health,
Labour and Welfare, for release from the obligation of paying benefits for employees’ prior services relating
to the substitutional portion of the Welfare Pension Insurance Scheme. Afterwards, the welfare pension
insurance plan was changed to the defined benefit plan.
The Company and some of its consolidated subsidiaries in Japan also provide a defined contribution
plan. In addition, the Company has established an employee retirement benefits trust.
The liabilities and expenses for retirement benefits are determined based on the amounts actuarially
calculated using certain assumptions.
(Additional information)
On April 1, 2012, the Company and certain consolidated subsidiaries transferred part of the defined
benefit plan to the defined contribution plan. In conjunction with this change, the “Guidance on
Accounting for Transfers between Retirement Benefit Plans” (ASBJ Guidance No. 1) was applied.
The effect of this transfer was recorded as other income of ¥385 million ($4,096 thousand) for the fiscal
year ended March 31, 2013.
Provision for directors’ retirement benefits
The annual provision for accrued retirement benefits for directors and statutory auditors of the Company
and certain subsidiaries is calculated to state the liability at the amount that would be required if all direc-
tors and corporate auditors had retired at each balance sheet date.
Profile / Contents CASIO’s StrengthHistory To Our Stakeholders At a Glance Special Feature CSRCorporate Governance Corporate Data
PAGE 24
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