Square Enix 2010 Annual Report Download - page 39

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
At the Company and certain consolidated subsidiaries an allow-
ance 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, 2010
A) Allowance for doubtful accounts
Same as the year ended March 31, 2009
B) Reserve for bonuses
Same as the year ended March 31, 2009
C) Allowance for sales returns
At certain consolidated subsidiaries prior to the fiscal year
ended March 31, 2010, allowances are provided for losses
on the return of published materials, at an amount calculated
based on historical experience prior to this fiscal year and allow-
ances are provided for losses on the return of game software
and other, comprising an estimated amount of future losses
assessed for each game title.
D) Allowance for closing of game arcades
Same as the year ended March 31, 2009
E) Allowance for employees’ retirement benefits
Same as the year ended March 31, 2009
F) Allowance for directors’ retirement benefits
Same as the year ended March 31, 2009
(5) Translation of foreign currency transactions and accounts:
■ Year ended March 31, 2009
All monetary assets and liabilities of the Company and its overseas
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 adjust-
ments are recorded in net assets as “Foreign currency translation
adjustments” and are included in minority interests in consolidated
subsidiaries.
■ Year ended March 31, 2010
Same as the year ended March 31, 2009
(6) Additional accounting policies used to prepare consolidated
financial statements:
■ Year ended March 31, 2009
Accounting treatment of consumption taxes
Income statement items are presented exclusive of consumption taxes.
■ Year ended March 31, 2010
Accounting treatment of consumption taxes
Same as the year ended March 31, 2009
5. Valuation of Assets and Liabilities of Consolidated
Subsidiaries
■ Year ended March 31, 2009
All assets and liabilities of consolidated subsidiaries are revalued on
acquisition.
■ Year ended March 31, 2010
Same as the year ended March 31, 2009
6. Amortization of Goodwill
■ Year ended March 31, 2009
Goodwill is amortized using the straight-line method over a period of
20 years. However, goodwill whose value has been extinguished is
fully amortized during the fiscal year in which it was incurred.
■ Year ended March 31, 2010
Goodwill is amortized using the straight-line method over a period
of either 10 years or 20 years. However, goodwill whose value has
been extinguished is fully amortized during the fiscal year in which
it was incurred.
7. Scope of Cash and Cash Equivalents in the Consolidated
Statements of Cash Flows
■ Year ended March 31, 2009
Cash and cash equivalents in the consolidated statements of cash
flows are comprised of cash on hand, bank deposits which are able
to be withdrawn on demand and highly liquid short-term invest-
ments with an original maturity of three months or less and with
minor risk of significant fluctuations in value.
■ Year ended March 31, 2010
Same as the year ended March 31, 2009
New Accounting Standards
■ Year ended March 31, 2009
(Changes in Standards and Valuation Methods for Major Assets)
Inventories
Previously, ordinary inventories held for sale had principally stated
at cost determined by the identified cost method. However, effec-
tive from the fiscal year ended March 31, 2009, accompany-
ing the adoption of the “Accounting Standard for Measurement
of Inventories” (Accounting Standards Board of Japan (ASBJ)
Statement No. 9, issued on July 5, 2006), inventories are primarily
stated at cost, based on the identified cost method (the value stated
on the balance sheet was calculated by writing down the book
value based on declining profitability). As a result, in the fiscal year
ended March 31, 2009, on a consolidated basis, operating income
decreased ¥685 million. There was no impact on recurring income,
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