Epson 2005 Annual Report Download - page 59

60 Seiko Epson Annual Report 2005
Most of the Company’s foreign subsidiaries have various retirement plans, which are primarily defined contribu-
tion plans, covering substantially all of their employees. Epson’s funding policy for these defined contribution plans
is to contribute annually an amount equal to a certain percentage of the participants’ annual salaries.
With respect to the Company’s directors and statutory auditors, who are not covered by the benefit plans for
employees described above, provision is made for retirement benefits based on internal rules regarding directors’
and statutory auditors’ retirement benefits. In accordance with the Commercial Code of Japan, payments of
retirement benefits for directors and statutory auditors are subject to approval by a resolution at the Company’s
shareholders’ meeting.
(13) Accrued recycle costs
At the time of sale, accrued recycle costs are provided for estimated future returns of consumer personal computers.
(14) Revenue recognition
Revenue from sale of goods is recognized at the time when goods are shipped. Revenue from services is recognized
when services are rendered and accepted by customers.
(15) Research and development costs
Research and development costs are expensed as incurred.
(16) Leases
Epson leases certain office space, machinery and equipment and computer equipment from third parties.
Under Japanese accounting standards, capital leases, other than those under which ownership of the assets will
be transferred to the lessee at the end of the lease term, are allowed to be accounted for as operating leases with
footnote disclosure of the estimated acquisition cost, estimated accumulated depreciation and future estimated
lease payments.
Epson has recorded substantially all leases as operating leases in the manner described in the preceding paragraph.
(17) Net income per share
Net income per share is computed based on the weighted average number of shares of common stock outstanding
during each fiscal period.
Under the Japanese accounting standards concerning accounting for bonuses to directors and statutory
auditors, effective for fiscal years beginning on or after April 1, 2003, the bonuses to directors and statutory auditors
have been charged to income in the years ended March 31, 2004 and 2005.
(18) Appropriations of retained earnings
Appropriations of retained earnings reflected in the accompanying consolidated financial statements have been
recorded after approval by the shareholders as required under the Commercial Code of Japan. In addition to year-end
dividends, the board of directors may declare interim cash dividends by resolution to the shareholders of record as
of September 30 of each year.
(19) Reclassifications
Certain prior year amounts have been reclassified to conform to the presentations for the year ended March 31, 2005.
3. U.S. dollar amounts
U.S. dollar amounts presented in the accompanying consolidated financial statements and in these notes are
included solely for the convenience of readers and are not audited. These translations should not be construed as
representations that the yen amounts actually represent, or have been or could be converted into U.S. dollars at
that or any other rate. As the amounts shown in U.S. dollars are for convenience only, a rate of ¥107.39 = U.S.$1,
the rate of exchange prevailing at March 31, 2005, has been used.