Isuzu 2002 Annual Report Download - page 24

ISUZU MOTORS LIMITED ANNUAL REPORT 2002
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e) Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depre-
ciation of property, plant and equipment is principally
computed by the straight-line method over the appli-
cable useful lives.
The Company also changed and shortened the esti-
mated useful lives and scrap value of some property,
plant and equipment based upon estimates of useful
lives from the fiscal year 2001.
f) Software Costs
Software used by the Company and its consolidated
subsidiaries is depreciated using the straight-line method,
based on the useful lives as determined by the Company
and its consolidated subsidiaries (generally 5 years).
g) Leases
Finance lease transactions, except those which meet the
conditions that the ownership of the lease assets is sub-
stantially transferred to the lessee, are accounted for on
a basis similar to ordinary rental transactions.
h) Employees’ Retirement Benefits
Employees’ retirement benefits covering all employees
are provided through an unfunded lump-sum benefit
plan and a funded pension plan. Under the plans,
eligible employees are entitled, under most circum-
stances, to severance payments based on compensation
at the time of severance and years of service.
Liabilities for employees’ retirement benefits are pro-
vided at the discounted present value of the benefit obli-
gations, less the fair value of the plan assets, calculated
by the projected benefit cost method until the year
ended March 31, 2000.
The Company has adopted a new financial
accounting standard for retirement benefits in Japan
effective from April 1, 2000. In accordance with this
standard, accrued employees’ retirement benefits at
March 31, 2001 have been provided mainly at an amount
calculated based on the retirement benefit obligation
and the fair value of the pension plan assets as of March
31, 2001, as adjusted for unrecognized actuarial gain or
loss. The cumulative effect of this accounting change is
recorded in the Consolidated Statements of Operations.
i) Income Taxes
Income taxes are accounted for on an accrual basis.
Deferred tax assets and liabilities are recognized for the
future tax consequences attributable to differences
between the financial statement carrying amounts of
existing assets and liabilities and their respective tax
bases. Deferred tax assets and liabilities are measured
using enacted tax rates expected to apply to taxable
income in the years in which those temporary differ-
ences are expected to be recovered or settled. The effect
on deferred tax assets and liabilities of changes in tax
rates are recognized in income in the period that
includes the enacted date.
j) Net Income per Share
Net income per share is based on the weighted-average
number of shares outstanding, less treasury stock, dur-
ing each year.
k) Appropriation of Retained Earning
Appropriations of retained earnings are recorded in the
financial year in which the appropriation is approved by
the Board of Directors or shareholders.
l) Cash and Cash Equivalents
For the purpose of the statement of cash flows, the Com-
pany considers all highly liquid investments with a
maturity of three months or less to be cash equivalents.
Reconciliation of cash and cash equivalents for the
statement of cash flows for the year ended March 31,
2002 is as follows:
Millions of Thousands of
Yen U.S. Dollars
Cash and time deposits on the
consolidated balance sheet . . . . . . . ¥79,121 $593,784
Time deposits with original
maturities over three months at
the time of purchase . . . . . . . . . . . (6,836) (51,309)
Cash and cash equivalents . . . . . . . ¥72,284 $542,475
m) Accounting Change
Housing rental income and expenses were recorded in
“Other Income (Expenses)” until the fiscal year 2000.
However, because of the revision of operations to use
rental income property effectively, the Company
changed its accounting method for housing rental
income and expenses such that they are recognized as
“Net sales” and “Cost of sales” from the fiscal year 2001.