Konica Minolta 2013 Annual Report Download - page 33

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Other securities for which market quotes are available are stated at
fair value. Net unrealized gains or losses on these securities are
reported, net of tax, as a separate component of net assets.
Other securities for which market quotes are unavailable are stated
at cost, except in cases where the fair value of equity securities issued
by unconsolidated subsidiaries and affi liates or other securities has
declined signifi cantly and such decrease in value is deemed other than
temporary. In these instances, securities are written down to the fair
value and the resulting losses are charged to income during the period.
Hedge Accounting
Gains or losses arising from changes in fair value of derivatives
designated as hedging instruments are deferred as an asset or a liability
and charged or credited to income in the same period that the gains
and losses on the hedged items or transactions are recognized.
Derivatives designated as hedging instruments are primarily interest
rate swaps, currency options, currency swaps and forward foreign
currency exchange contracts. The related hedged items are trade
accounts receivable, trade accounts payable and long-term bank loans.
The Companies’ policy is to utilize the above hedging instruments in
order to reduce exposure to the risks of interest rate and exchange rate
fl uctuations. As such, the Companies’ purchases of the hedging
instruments are limited to, at maximum, the amounts of the hedged
items.
The Companies evaluate the effectiveness of their hedging activities
by reference to the accumulated gains or losses on the hedging
instruments and the related hedged items on the date of
commencement of the hedges.
(l) Retirement Benefi t Plans
Retirement Benefi ts for Employees
The Company, domestic consolidated subsidiaries and certain overseas
consolidated subsidiaries have obligations to make defi ned benefi t
retirement payments to their employees and, therefore, provide for
accrued retirement benefi ts based on the estimated amount of
projected benefi t obligations and the fair value of plan assets.
For the Company and its domestic consolidated subsidiaries,
unrecognized prior service cost is amortized using the straight-line
method over a 10-year period, which is shorter than the average
remaining years of service of the eligible employees. Unrecognized net
actuarial gains or losses are primarily amortized in the following year
using the straight-line method over a 10-year period, which is shorter
than the average remaining years of service of the eligible employees.
Accrued Retirement Benefi ts for Directors and Statutory Auditors
Domestic consolidated subsidiaries recognize a reserve for retirement
benefi ts for directors and statutory auditors based on the amount
payable at the end of the period in accordance with their internal
regulations.
(m) Per Share Data
Net income per share of common stock is calculated based on the
weighted-average number of shares outstanding during the year.
Cash dividends per share for each year as disclosed in the
accompanying consolidated fi nancial statements are dividends declared
for the respective year.
(n) Practical Solution on Unifi cation of Accounting Policies Applied
to Foreign Subsidiaries for Consolidated Financial Statements
Effective from the year ended March 31, 2009, the Company applied
the “Practical Solution on Unifi cation of Accounting Policies Applied to
Foreign Subsidiaries for Consolidated Financial Statements”
(Accounting Standards Board of Japan (ASBJ) Practical Issues Task
Force (PITF) No. 18, issued by the ASBJ on May 17, 2006).
The Company has made necessary adjustments upon consolidation
to unify accounting standards for foreign subsidiaries to be consistent
with the Company.
(o) Changes in Accounting Policies
Changes in Depreciation Method
Beginning the fi scal year ended March 31, 2013 with the revision of the
Corporation Tax Law, the Company and its domestic consolidated
subsidiaries have changed their depreciation method for property,
plantand equipment. Assets acquired on or after April 1, 2012 are
depreciated using the method prescribed in the amended Corporate
Tax Law.
Because of the change, operating income increased ¥646 million
while income before income taxes and minority interests increased
¥647 million for the fi scal year ended March 31, 2013 compared with the
amount calculated under the previous method.
(p) Accounting Standards Issued but Not Yet Applied
Accounting Standard for Retirement Benefi ts
ASBJ Statement No. 26, “Accounting Standard for Retirement Benefi ts”,
issued by the ASBJ on May 17, 2012 and ASBJ Guidance No. 25,
“Guidance on Accounting Standard for Retirement Benefi ts”, issued by
the ASBJ on May 17, 2012
(1) Summary
The treatment of unrecognized actuarial differences and
unrecognized prior service costs, calculation of accrued retirement
benefi ts and service costs were amended.
(2) Effective dates
The Company expects to apply the revised accounting standard
from the end of the fi scal year ending March 31, 2014. However, the
amendment of the calculation method for the present value of
defi ned benefi t obligations and current service costs will be adopted
from the beginning of the fi scal year ending March 31, 2015.
(3) Effect of adoption
The effect of adopting this revised accounting standard is under
assessment at the time of preparation of these accompanying
consolidated fi nancial statements.
3. U.S. Dollar Amounts
The translation of Japanese yen amounts into U.S. dollars is included
solely for the convenience of the reader, using the prevailing exchange
rate at March 31, 2013, of ¥94.05 to U.S.$1.00. The translations should
not be construed as representations that the Japanese yen amounts
have been, could have been, or could in the future be, converted into
U.S. dollars at this or any other exchange rate.