Mazda 2011 Annual Report Download - page 60

Derivatives and hedge accounting
Derivative financial instruments are mainly stated at fair value, and changes in the fair value are recognized as gains
or losses unless derivative financial instruments are used for hedging purposes and meet criteria for hedge
accounting.
If derivative financial instruments are used as hedges and meet certain hedging criteria, recognition of gains or
losses resulting from changes in the fair value of derivative financial instruments is deferred until the related losses
or gains on the hedged items are recognized.
Also, if interest rate swap contracts are used as hedges and meet certain hedging criteria, the net amount to be
paid or received under the interest rate swap contract is added to or deducted from the interest on the assets or lia-
bilities for which the swap contract was executed.
Amounts per share of common stock
The computations of net income or loss per share of common stock are based on the average number of shares out-
standing during each fiscal year. Diluted net income per share of common stock is computed based on the average
number of shares outstanding during each fiscal year after giving effect to the diluting potential of common stock to
be issued upon the exercise of stock acquisition rights and stock options.
For the years ended March 31, 2011 and 2010, only information on net loss per share of common stock is pro-
vided without information on diluted net loss per share of common stock to reflect the diluting effect in accordance
with the applicable provisions of Japanese GAAP.
Cash dividends per share represent amounts applicable for the respective years on an accrual basis.
Reclassifications
Certain amounts in the prior year’s consolidated financial statements have been reclassified to conform to this year’s
presentation.
3 ADOPTION OF NEW ACCOUNTING STANDARDS AND ACCOUNTING CHANGES
Adoption of Accounting Standard for Equity Method of Accounting for Investments and Practical Solution on
Unification of Accounting Policies Applied to Associates Accounted for Using the Equity Method
Commencing in the year ended March 31, 2011, the Company and its foreign affiliates accounted for using the
equity method adopted the Accounting Standards Board of Japan (“ASBJ”) Statement No. 16 “Accounting Standard
for Equity Method of Accounting for Investments” and the Practical Issues Task Force (“PITF”) No. 24 “Practical
Solution on Unification of Accounting Policies Applied to Associates Accounted for Using the Equity Method”, both
issued by the ASBJ on March 10, 2008.
As a result, for similar transactions and events that occurred under similar circumstances, the accounting policies
and procedures applied to the investing company (the Company and its subsidiaries) and the investee companies
accounted for using the equity method are unified in principle, unless there is a rational reason for not doing so.
The effects of adopting these standards on income before income taxes in the consolidated statement of opera-
tions and comprehensive operations for the year ended March 31, 2011 were immaterial.
Adoption of Accounting Standards for Asset Retirement Obligations
Commencing in the year ended March 31, 2011, the Company and its consolidated domestic subsidiaries adopted
the ASBJ Statement No. 18 “Accounting Standard for Asset Retirement Obligations” and the ASBJ Guidance No. 21
“Guidance on Accounting Standard for Asset Retirement Obligations”, both issued by the ASBJ on March 31, 2008.
The effects of adopting these standards on the consolidated statement of operations and comprehensive opera-
tions for the year ended March 31, 2011 were to decrease operating income by ¥329 million ($3,964 thousand) and
income before income taxes by ¥3,013 million ($ 36,301 thousand).
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
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