Square Enix 2009 Annual Report Download - page 33

D) Allowance for closing of game arcades
For closures of game arcades that have been determined, an
allowance is provided at an amount in line with reasonable
estimates of future losses on such closures.
E) Allowance for employees’ retirement benefits
An allowance for employees’ retirement benefits is provided at
the amount incurred during the fiscal year, which is based on
the estimated present value of the projected benefit obligation
and pension plan assets. Unrecognized actuarial differences are
fully amortized in the year following the year in which they
arise. At certain consolidated subsidiaries, amortization for each
fiscal year is made over a certain period (five years) using the
straight-line method within the average remaining years of
service of the eligible employees when the differences are
recognized, commencing from the year after the year in which
they are incurred. Unrecognized prior service cost is amortized
over a certain period (one year or five years) within the average
remaining service period of the eligible employees. In addition,
at certain of the Company’s domestic consolidated subsidiaries,
a reserve for employees’ retirement benefits is provided at an
amount equal to 100% of the benefits the subsidiaries would be
required to pay under the lump-sum retirement plan if all eligible
employees were to voluntarily terminate their employment at the
balance sheet date.
F) Allowance for directors’ retirement benefits
An allowance for directors’ retirement benefits is provided to
adequately cover the costs of directors’ retirement benefits,
which are accounted for on an accrual basis in accordance with
internal policy.
• Year ended March 31, 2009
A) Allowance for doubtful accounts
Same as the year ended March 31, 2008
B) Reserve for bonuses
Same as the year ended March 31, 2008
C) Allowance for sales returns
Same as the year ended March 31, 2008
D) Allowance for closing of game arcades
Same as the year ended March 31, 2008
E) Allowance for employees’ retirement benefits
Same as the year ended March 31, 2008
F) Allowance for directors’ retirement benefits
Same as the year ended March 31, 2008
(4) Translation of foreign currency transactions and accounts:
• Year ended March 31, 2008
All monetary assets and liabilities of the Company and its domestic
consolidated subsidiaries denominated in foreign currencies are
translated at the balance sheet date at the year end rates. The resulting
translation gains or losses are credited or charged to income. All
monetary assets and liabilities of overseas consolidated subsidiaries
are translated as of the balance sheet date at the year end rates, and
all income and expense accounts are translated at rates for their
respective periods. The resulting translation adjustments are recorded
in net assets as “Foreign currency translation adjustments” and are
included in minority interests in consolidated subsidiaries.
• Year ended March 31, 2009
Same as the year ended March 31, 2008
(5) Accounting for leases:
• Year ended March 31, 2008
Finance leases, other than those for which the ownership of the
leased assets is considered to be transferred to the lessees, are
accounted for as operating leases.
• Year ended March 31, 2009
Please refer to (2) C) Leased assets.
(6) Additional accounting policies used to prepare consolidated
financial statements:
• Year ended March 31, 2008
A) Accounting treatment of consumption taxes
Income statement items are presented exclusive of consumption
taxes.
B) Accounting treatment of overseas consolidated subsidiaries
The accounts and records of overseas consolidated subsidiaries
are maintained in conformity with accounting principles and
practices generally accepted in their respective countries of
domicile.
• Year ended March 31, 2009
A) Accounting treatment of consumption taxes
Same as the year ended March 31, 2008
B) Accounting treatment of overseas consolidated subsidiaries
Please refer to New Accounting Standards (Practical Solution on
Unification of Accounting Policies Applied to Foreign
Subsidiaries for Consolidated Financial Statements).
5. Valuation of Assets and Liabilities of Consolidated
Subsidiaries
• Year ended March 31, 2008
All assets and liabilities of consolidated subsidiaries are revalued on
acquisition.
• Year ended March 31, 2009
Same as the year ended March 31, 2008
6. Amortization of goodwill
• Year ended March 31, 2008
Goodwill is amortized using the straight-line method over a period of
either five years or 20 years. However, goodwill whose value has
been extinguished is fully amortized during the fiscal year in which
it was incurred.
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