Suzuki 1999 Annual Report Download - page 22

are translated into Japanese yen on the basis of the year-end rates except shareholders'
equity, which are translated at the historical rates.
Translation differences are shown as "Foreign currency translation adjustments" in the
consolidated balance sheets.
(c)Investments in securities
Marketable securities (current and non-current) are stated at the lower of cost or
market value, cost being determined by the moving average method. Non-marketable
securities are stated at cost determined by the moving average method.
(d)Inventories
Inventories are stated at the lower of cost or market value, cost being determined
principally by the gross average method.
(e)Property, plant and equipment
Property, plant and equipment are stated at cost. Depreciation is principally computed
by the declining-balance method based on estimated useful lives of the assets.
Provision for additional depreciation is made to reflect use of machinery and
equipment in excess of normal production schedules, a substantial portion of which
is, however, not tax deductible.
Maintenance and repairs, including minor renewals and improvements, are charged to
income as incurred.
(f)Leases
Finance lease transactions, except for those which meet the conditions that the
ownership of the lease assets is substantially transferred to the lessee, are accounted
for on a basis similar to ordinary rental transactions.
(g)Income taxes
Income taxes are principally accounted for on an accrual basis. Deferred income taxes
pertaining to timing differences are recognized only insofar as they relate to the
elimination of unrealized inter-company profits and other adjustments for consolidation
purposes.
(h)Retirement and severance benefits
The Company and certain consolidated subsidiaries have a funded retirement and
severance pension plan and/or an unfunded retirement benefit plan, both of which cover
all of their employees.
The amount of the retirement and severance benefits is in general determined on the
basis of length of service and basic salary at the time of the retirement. The Company
and certain consolidated subsidiaries reserve retirement and severance allowances for
directors and statutory auditors. The liability for accrued retirement and severance
benefits shown on the consolidated balance sheet represents the retirement and severance
benefits accrued in respect of the unfunded plan of the Company and certain subsidiaries
at the amounts which would be required if all employees voluntarily retired at the balance
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS