Konica Minolta 2001 Annual Report Download - page 28

Konica Corporation/ Annual Report 200 1
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( g) Resear ch and Development Expenses
Expenses for researc h and development activities are charged to income
as incurred.
( h) Financial Instruments
Until the year ended March 31, 2000, marketable securities are stated at
cost whic h is determined by the moving average method.
Effective from the year ended March 3 1 , 2 0 0 1 , the Company and its
subsidiaries adopted the new Japanese ac counting standard for financ ial
instruments, which is effective for periods beginning on or after April 1 ,
2 0 0 0 . The adoption of the new standard had no material impact on
income before income taxes for the year ended March 3 1 , 2 001.
Der ivatives
Under the new standard, all derivatives are stated at fair value, with
changes in fair value included in net profit or loss for the period in
which they arise, except for derivatives that are designated as “hedging
instruments” ( see Hedge Accounting below) .
Securities
Sec urities held by the Company and its subsidiaries are, under the new
standard, classified into two categories;
Investments of the Company in equity securities issued by
unconsolidated subsidiaries and affiliates are ac counted for by the equity
method. Exceptionally, investments in certain unconsolidated
subsidiaries and affiliates are stated at cost because the effect of
applic ation of the equity method would be immaterial.
Other securities for whic h market quotations are available are stated
at fair value.
Net unrealized gains or losses on these sec urities are reported as a
separate item in the shareholders’ equity at a net-of-tax amount.
Other securities for whic h market quotations are unavailable are
stated at cost, except as stated in the paragraph below.
In cases where the fair value of equity securities issued by
unconsolidated subsidiaries and affiliates, or other sec urities has
dec lined significantly and suc h impairment of the value is not deemed
temporary, those securities are written down to the fair value and the
resulting losses are included in net profit or loss for the period.
Under the new standard, other sec urities are presented as “non-
current.” The securities held by the Company and its subsidiaries have
been reclassified as of April 1 , 2000 ( the beginning of year) . As a result
of such reclassification, the securities in the current portfolio have
dec reased by ¥ 1 7 ,342 million ( US$ 1 3 9 ,9 6 8 thousand) and the securities
in the non-current portfolio have increased by the same amount.
Hedge Accounting
Gains or losses arising from changes in fair value of the derivatives
designated as “hedging instruments” are deferred as an asset or liability
and included in net profit or loss in the same period during which the
gains and losses on the hedged items or transactions are recognized.
The derivatives designated as hedging instruments by the Company
are principally interest swaps, commodity swaps and forward exchange
contracts. The related hedged items are trade accounts receivable and
payable, raw materials, long-term bank loans, and debt securities issued
by the Company.
The Company has a policy to utilize the above hedging instruments in
order to reduc e the Company’s exposure to the risk of interest rate
fluc tuation. Thus, the Company’s purchases of the hedging instruments
are limited to, at maximum, the amounts of the hedged items.
The Company evaluates effectiveness of its hedging activities by
referenc e to the accumulated gains or losses on the hedging instruments
and the related hedged items from the commencement of the hedges.
( i) Accrued Retirement Benefits
Effective from the year ended March 3 1 , 2 0 0 1 , the Company and its
subsidiaries adopted the new Japanese ac counting standard for
retirement benefits, which is effective for periods beginning on or after
April 1, 2 0 0 0 . In accordance with the new standard, the reserve for
retirement benefits as of Marc h 31, 2 0 0 1 represents the estimated
present value of projected benefit obligations in excess of the fair value
of the plan assets except that, as permitted under the new standard, the
unrec ognized transition amount arising from adopting the new standard
of ¥ 2 7 ,9 2 9 million ( US$225,416 thousand) , including the amount of
¥ 2 2 ,0 9 6 million ( US$178,337 thousand) that is fully-amortized the
establishment of the trust for retirement benefit at April 1 , 2 000 ( the
beginning of year) is amortized on a straight-line basis over 5 years. The
unrec ognized ac tuarial differences will be amortized on a straight-line
basis mainly over the period of 1 0 years from the next year in whic h they
arise.
As a result of adopting the new standard, inc luding the extraordinary
gain of ¥ 8 ,8 7 3 million( US$ 7 1 ,6 1 4 thousand) by c ontribution of
investment sec urities related to the establishment of the trust for
retirement benefit, net retirement benefit expenses for the year ended
March 3 1 , 2001 income before income taxes has decreased by ¥ 1 2 ,8 0 7
million ( US$ 1 0 3 ,366 thousand) as compared with the amounts which
would have been reported if the previous standard had been applied
consistently.
( j) Per Share Data
Net income per share of common stoc k has been computed based on the
weighted average number of shares outstanding during the year.
Cash dividends per share shown for eac h year in the ac companying
consolidated statements are dividends dec lared as applicable to the
respective years.
3 . United States Dollar Amounts
Amounts in U.S. dollars are inc luded solely for the c onvenience of
readers outside Japan. The rate of ¥123.90= US$1, the rate of exc hange
on March 30, 2001, has been used in translation. The inclusion of suc h
amounts is not intended to imply that Japanese yen have been or c ould
be readily c onverted, realized or settled in U.S. dollars at this rate or any
other rate.