Epson 2009 Annual Report Download - page 58

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(15) 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.
(16) Research and development costs
Research and development costs are charged as incurred.
(17) Leases
Epson leases certain office space, machinery and equipment and computer equipment from third parties
using capital leases. Most of the capital leases are other than those under which ownership of the assets
will be transferred to the lessee at the end of the lease term, and are depreciated/amortized in accordance
with the straight-line method over the periods of the leases, assuming no residual value.
Effective April 1, 2008, the Company and its domestic subsidiaries adopted ASBJ Statement No.13,
“Accounting Standard for Lease Transactions” and its Guidance No.16, “Guidance on Accounting
Standard for Lease Transactions”, as revised on March 30, 2007.
Prior to April 1, 2008, capital leases, other than those under which ownership of the assets would be
transferred to the lessee at the end of the lease term, were recognized as operating leases. Under these new
accounting standards, these leases are accounted for as capital leases and depreciated/amortized in
accordance with the straight-line method over the periods of the leases, assuming no residual value.
As a result, operating income and ordinary income for the year ended March 31, 2009, increased by ¥678
million ($6,902 thousand) and ¥376 million ($3,827 thousand), respectively, and income before income
taxes and minority interests for the year ended March 31, 2009, decreased by ¥269 million ($2,738
thousand) from the corresponding amounts that would have been reported if the previous method had been
applied.
The effect of the adoption of this standard on segment information is noted in the relevant sections.
(18) Net income per share
Net income per share is computed based on the weighted-average number of common shares outstanding
during each fiscal period.
(19) Dividends
Dividends are charged to retained earnings in the fiscal year in which they are paid after approval by
shareholders. In addition to year-end dividends, the board of directors may declare interim cash dividends
by resolution to the registered shareholders as of September 30 of each year.
(20) Completed-contract method, percentage-of-completion method
Effective April 1, 2008, the Company and its domestic subsidiaries adopted ASBJ Statement No.15,
“Accounting Standard for Construction Contracts” and its Guidance No.18, “Guidance on Accounting
Standard for Construction Contracts”, issued on December 27, 2007.
Prior to April 1, 2008, the Company and its domestic subsidiaries applied the completed-contract method
for recognizing revenues and costs from long-term construction contracts. Under ASBJ Statement No.15
and its Guidance No.18, the percentage-of-completion method is applied if the outcome of the construction
activity can be accurately estimated during the course of the activity during the quarterly period, otherwise
the completed-contract method shall be applied. The percentage of completion at the end of each quarterly
period is estimated based on the percentage of the cost incurred to the estimated total cost.
The adoption of these standards did not have a material effect on Epson’s financial results for the year
ended March 31, 2009. The contract revenue and related costs that were computed based on the percentage
of completion of construction activities as of April 1, 2008, were recorded in extraordinary income as a
result of offsetting contract revenue of ¥157 million ($1,598 thousand) against related costs of ¥113 million
($1,150 thousand).
4. U.S. dollar amounts
U.S. dollar amounts presented in the accompanying consolidated financial statements and in these notes