Suzuki 2000 Annual Report Download - page 24

(c)Marketable securities
Marketable securities quoted at an exchange are stated at the lower of cost or market value, cost being
determined by the moving average method. Marketable securities not quoted at an exchange 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
periodic 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
The provision for income taxes is computed based on the pretax income included in consolidated
statements of income. The assets and liability approach is adopted to recognize deferred tax assets and
liabilities for the expected future tax consequences of temporary differences between the carrying amounts
and the tax bases of assets and liabilities.
Tax effect accounting has been applied from this fiscal term in accordance with The revision of the
Regulation of Consolidated Financial Statements. As a result of the application of the accounting, when
compared with the case where a previous method was applied, the amounts of assets was increased by
¥83,568 million, the amounts of liabilities was increased by ¥478 million. And the net income and
consolidated retained earnings were respectively declared by an increased amount of ¥3,307 million, and
¥81,682 million.
(h)Reserve for retirement allowance
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 reserve
for retirement allowance 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 sheet date, plus the provisions
for retirement and severance benefits of directors and statutory auditors computed by the retirement and
severance benefit rule of directors and statutory auditors at the balance sheet date.