Isuzu 2016 Annual Report Download - page 28

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Isuzu Motors Limited
10 years). Actuarial gains or losses are amortized by the straight-line
method over the period within the average remaining years of service of
the eligible employees (about 10 years) commencing with the following
periods.
Some of the consolidated subsidiaries are adopting the simplified
method of calculating their retirement benefit obligations and its cost.
In the method, the amount which would be required to be paid
if all eligible employees of its subsidiaries voluntarily terminated their
employment as of the balance sheet date is recognized as the retirement
benefit obligation.
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 statements 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 differences are expected to be recovered or settled. The effect
of change in tax rate is recognized in income in the period of the change.
j) Profit Attributable to Owners of Parent per Share
Profit attributable to owners of parent per share of common stock
is calculated based upon the weighted average number of shares of
common stock outstanding during each year.
Basis for the calculation of profit attributable to owners of parent per
share as of March 31, 2016 is as follows:
Thousands of
Millions of yen U.S. dollars
Profit attributable to owners of parent ¥ 114,676 $ 1,017,719
Profit attributable to owners of
parent pertaining to common stock ¥ 114,676 $1,017,719
Average number of outstanding shares:
Common stock: 828,435,751
k) Appropriation of Retained Earnings
The appropriation of retained earnings is recorded in the fiscal year
in which such appropriation is approved by the board of directors or
shareholders.
l) Cash and Cash Equivalents
For the purpose of the consolidated statements of cash flows, the
Company considers all highly liquid investments with a maturity of three
months or less to be cash equivalents.
Reference for the reconciliation between cash and cash equivalents
at end of the consolidated financial year is in Note 15. Consolidated
statements of cash flows, (1) Reconciliation for cash status between
balance sheets and cash flows.
m) Unapplied Accounting Standards and Guidances
(Adoption of Implementation Guidance on Recoverability of Deferred
Tax Assets)
1) Overview
“Implementation Guidance on Recoverability of Deferred Tax Assets”
(ASBJ Guidance No. 26; March 28, 2016) stipulates the guideline for
recoverability of deferred tax asset in the case of applying “Tax Effect
Accounting” issued by Business Accounting Council.
The implementation guidance and auditing guidance (relating only
to the accounting process) for recoverability of deferred tax assets
was transferred to ASBJ from the Japanese Institute of Certified Public
Accountants (JICPA). As a result of this transfer, following the framework
of the Auditing Guidance No. 66, “Auditing Treatment for Judgment of
Recoverability of Deferred Assets,” in which companies are categorized
into five categories and deferred tax assets are estimated according to
each of these categories, ASBJ conducted a necessary review, though
partially, as to the definition of categorization and the treatment of
deferred tax assets.
(Reconsideration of definition for allocation of items and treatment of
deferred tax assets)
• Treatment of companies which does not satisfy any requirements for
category 1 through 5.
• Category requirements for category 2 and 3.
• Treatment of future temporary difference which cannot be scheduled
for a company which qualifies to category 2.
• Treatment of reasonable period foreseeable of future tax-deducted
income with temporary difference not being added for a company
which qualifies to category 3.
• Treatment of a company which qualifies to category 4 and at the same
time also to category 2 or 3.
2) Scheduled date of adoption
The company expects to adopt them from the beginning of the fiscal
year ended March 31, 2017.
3) The impact of the application of these accounting standards
and guidances
The impact of the application of “Implementation Guidance on
Recoverability of Deferred Tax Assets” to the consolidated financial
statements is still to be evaluated.
n) Changes in Presentation
(Changes relating to the accounting standards for business combination)
By applying the provisions of Article 39 of “Accounting Standard for
Consolidated Financial Statements” (ASBJ Statement No. 22; September
13, 2013), the presentation of net income , etc., has been changed and
the presentation of “minority interests” has been changed to “non-
controlling interests.” To reflect these changes in presentation, the
consolidated financial statements for the previous consolidated fiscal
year have been restated.