Mazda 2007 Annual Report Download - page 69
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or changes in circumstances indicate that the carrying amount of an asset or asset group may not be
recoverable. An impairment loss would be recognized if the carrying amount of an asset or asset
group exceeds the sum of the undiscounted future cash flows expected to result from the continued
use and eventual disposition of the asset or asset group. The impairment loss would be measured at
the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the
higher of the discounted cash flows from the continued use and eventual disposition of the asset or
the net selling price at disposition.
The effect of adopting the new accounting standard on the consolidated statement of income for
the year ended March 31, 2007 and 2006 was to decrease income before income taxes by ¥3,356
million ($28,441 thousand) and ¥21,891 million. (See Note 7)
Also, the impaired fixed assets are presented in the consolidated balance sheet net of accumulated
impairment in accordance with the revised standard for preparation of consolidated financial statements.
Accounting for share-based payment
Commencing in the year ended March 31, 2007, the Domestic Companies adopted the ASBJ
Statement No. 8, Accounting Standard for Share-based Payment, issued by the ASBJ on December
27, 2005 and the ASBJ Guidance No. 11 (revised 2006), Guidance on Accounting Standard for
Share-based Payment, last revised by the ASBJ on May 31, 2006.
The effect of adopting the new standard for the year ended March 31, 2007 was to decrease
operating income, ordinary income and income before taxes by ¥67 million. The effects of adopting
the new standards on the segment information are discussed in the applicable section of the notes to
the consolidated financial statements.
Accounting standard for presentation of equity in the balance sheet
Effective from the year ended March 31, 2007, the Domestic Companies adopted the new accounting
standard, “Accounting Standard for Presentation of Net Assets in the Balance Sheet”(Statement No. 5
issued by the Accounting Standard Board of Japan on December 9, 2005), and the “Implementation
Guidance on Accounting Standard for Presentation of Net Assets in the Balance Sheet”(the Financial
Accounting Standard Implementation Guidance No. 8 issued by the Accounting Standards Board of
Japan on December 9, 2005), (collectively, “the New Accounting Standards”). Under the New
Accounting Standards, the following items are presented differently at March 31, 2007 compared to
March 31, 2006. The equity section includes net gain/loss on derivative instruments, net of taxes.
Under the previous presentation rules, gain/loss on derivative instruments were included in the assets
or liabilities section without considering the related income tax effects. Stock acquisition rights and
minority interests are included in the equity section at March 31, 2007. Under the previous presentation
rules, companies were required to present minority interests in between the long-term liabilities and
the shareholders’equity sections.
The adoption of the New Accounting Standards had no impacts on the consolidated statement of
income for the year ended March 31, 2007. In the calculation of the equity ratio and the equity per
share, the stock acquisition rights and the minority interests are excluded from the equity. Also, in
order to more easily compare with equity in 2005 and 2006, minority interests in 2005 are reclassified
in conformity with current year presentation.
4. Securities
The Company and its consolidated subsidiaries had no trading or held-to-maturity debt securities with
available fair values at March 31, 2007 and 2006.