Konica Minolta 1999 Annual Report Download - page 27

KONICA 23
(i) Income Taxes
In fiscal 1999, the Company and its domestic subsidiaries adopted
the deferred tax accounting method, which requires the adjustment
of previously deferred taxes using the liability method, where deferred
tax assets and liabilities are recognized for temporary differences
between the tax basis of assets and their reported amounts in the
financial statements. In accordance with generally accepted account-
ing standards for deferred tax accounting in Japan, the Company
reflected the cumulative effect of adopting deferred tax accounting at
the beginning of fiscal 1999 with a charge to retained earnings. Prior
years’ financial statements were not reclassified to conform to 1999
presentation.
In fiscal 1998, income taxes of the Company and its domestic sub-
sidiaries are provided for in an amount currently payable based on
the tax returns filed with the tax authority and adjusted for tax effects
of temporary differences arising from elimination entries reflected in
the consolidation procedures, such as the elimination of unrealized
intercompany profit and allowance for bad debts provided against
intercompany accounts receivable eliminated in consolidation.
Certain consolidated overseas subsidiaries account for income taxes
on the basis of interperiod allocation whereby tax effects on temporary
differences between tax and financial reporting are recognized.
(j) Research and Development Expenses
Expenses for research and development activities are charged to
income as incurred. Total amounts charged to income for the fiscal
years ended March 31, 1999 and 1998 were ¥27,944 million
(US$229,049 thousand) and ¥26,666 million, respectively.
(k) Legal Reserve
Due to the amendment to the Consolidated Financial Statements
Regulations, the presentations of the accounts in the consolidated
financial statements have been changed for the fiscal year ended
March 31, 1999.
“Legal Reserve,” which was previously reported as a separate
account within Shareholders’ Equity, is included in “Retained Earn-
ings.” Accordingly, the beginning balance, the movements during the
fiscal year, and the ending balance of the fiscal year of “Retained
Earnings” include “Legal Reserve.”
(l) Per Share Data
Net income per share of common stock has been computed based on
the weighted average number of shares outstanding during the year.
Cash dividends per share shown for each year in the accompany-
ing consolidated statements are dividends declared as applicable to
the respective years.
2. United States Dollar Amounts
Amounts in U.S. dollars are included solely for the convenience of
readers outside Japan. The rate of ¥122=US$1, the rate of exchange
on June 28, 1999, has been used in translation. The inclusion of such
amounts is not intended to imply that Japanese yen have been or
could be readily converted, realized or settled in U.S. dollars at this
rate or any other rate.
3. Marketable Securities
The aggregate book values and market values of current and non-
current marketable equity securities as of March 31, 1999 and 1998
are as follows:
Thousands of
Millions of yen U.S. dollars
1999 1998 1999
Book value:
Current.................................... ¥16,723 ¥17,868 $137,074
Non-current ............................ 13,943 14,135 114,287
.................................................... ¥30,666 ¥32,003 $251,361
Market value:
Current.................................... ¥17,861 ¥22,699 $146,402
Non-current ............................ 26,358 26,683 216,049
.................................................... ¥44,219 ¥49,382 $362,451
Gross unrealized gains and losses pertaining to marketable equity
securities as of March 31, 1999 are as follows:
Thousands of
Millions of yen U.S. dollars
Gains Losses Gains Losses
Current........................... ¥ 6,241 ¥5,103 $ 51,156 $41,828
Non-current ................... 13,291 876 108,943 7,180
The net realized gains on marketable equity securities for the fiscal
years ended March 31, 1999 and 1998 were ¥946 million (US$7,754 thou-
sand) and ¥33 million, respectively.
The net valuation loss on marketable equity securities for the fiscal
years ended March 31, 1999 and 1998 were ¥269 million (US$2,205
thousand) and ¥657 million, respectively.
4. Investments in and Loans to Unconsolidated
Subsidiaries and Affiliates
Investments in and loans to unconsolidated subsidiaries and affiliates
as of March 31, 1999 and 1998 are summarized as follows:
Thousands of
Millions of yen U.S. dollars
1999 1998 1999
Investments .................................... ¥3,205 ¥8,022 $26,270
Loans.............................................. 442 776 3,623
........................................................ ¥3,647 ¥8,798 $29,893
The transactions of the Company and its consolidated subsidiaries
with these unconsolidated subsidiaries and affiliates are as follows:
Thousands of
Millions of yen U.S. dollars
1999 1998 1999
Sales........................................... ¥18,256 ¥25,857 $149,639
Purchases................................... 21,739 26,411 178,189