Suzuki 2009 Annual Report Download - page 35

34 SUZUKI MOTOR CORPORATION
As for directors and corporate auditors of the Company, the amount to be paid at the end of year had been posted
pursuant to the Company’s regulations on the retirement allowance of directors and corporate auditors. However, the
Company’s retirement benefit system for them was abolished at the closure of the ordinary general shareholders’
meeting held on June 2006. And it was approved at the shareholders’ meeting that reappointed directors and corporate
auditors are paid their retirement benefit at the time of their retirement, based on their years of service. Estimated
amount of such retirement benefits is appropriated at the end of this fiscal year.
Furthermore, for the directors and corporate auditors of some consolidated subsidiaries, the amount to be paid at
the end of the year was posted pursuant to their regulation on the retirement allowance of directors and corporate
auditors.
Retirement benefit cost and retirement benefit obligation are calculated based on the actuarial assumptions, which
include discount rate, assumed return of investment ratio, revaluation ratio, salary rise ratio, retirement ratio and mortality
ratio. Discount rate is decided on the basis of yield on low-risk, long-term bonds, and assumed return of investment ratio
is decided based on the investment policies of pension assets of each pension system etc.
Decreased yield on long-term bond leads to a decrease in discount rate and has an adverse influence on the
calculation of retirement benefit cost. However, the pension system adopted by the Company has a cash balance type
plan, and thus the revaluation ratio, which is one of the base ratios, can offset any adverse effects caused by a
decrease in the discount rate.
If the investment yield of pension assets is less than the assumed return of investment ratio, it will have an adverse
effect on the calculation of retirement benefit cost. But by focusing on low-risk investments, this influence should be
minimal in the case of the pension fund systems of the Company and its subsidiaries.
(m) Revenue recognition
Sales of products are generally recognized in the accounts as delivery is made.
(n) Net income per share
Primary net income per share is computed based on the weighted average number of shares issued during the
respective years. Fully diluted net income per share is computed assuming that all convertible bonds were converted
into common stock, with an applicable adjustment for related interest expense and net of tax. Cash dividends per share
are the amounts applicable to the respective periods including dividends to be paid after the end of the period.
(o) Cash and cash equivalents
All highly liquid investments with original maturities of three months or less when purchased are considered cash
and cash equivalents.
(p) Reclassification
Certain reclassifications of previously reported amounts are made to conform with current classifications.
NOTE 3: Changes in basic matters for preparing consolidated financial statements
(a) Application of the “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements”
The “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated
Financial Statements” (Accounting Standards Board of Japan; ASBJ Practical Issues Task Force No.18, May 17, 2006)
is applied from this fiscal year, and necessary adjustments in the consolidation process are made.
Influences by the above-mentioned change on operating income, ordinary income and income before income taxes
for this fiscal year are insignificant.
(b) Application of the “Accounting Standard for Measurement of Inventories”
The “Accounting Standard for Measurement of Inventories” (ASBJ Statement No.9, July 5, 2006) is applied from this
fiscal year, and the evaluation standards are changed from the “cost or market method of mainly gross average
method” to the “cost method of mainly gross average method (method of devaluation of book values based on the
reduction of profitability for values on the balance sheets).”
Influences by the above-mentioned change on operating income, ordinary income and income before income taxes
for this fiscal year are insignificant.
(c) Application of the “Accounting Standard for Lease Transactions”
Accounting treatment similar to that for rental transactions had been applied to finance lease transactions in which
ownership is not transferred. However, the “Accounting Standards for Lease Transactions (Corporate Accounting
Standard No. 13, June 17, 1993 (First Subsection of the Corporate Accounting Council), revised on March 30, 2007)”
and the “Guidance on Accounting Standards for Lease Transactions” (Corporate Accounting Standards Application
Guideline No. 16, January 18, 1994 (Accounting System Committee of the Japanese Institute of Certified Public
Accountants), revised on March 30, 2007 by ASBJ) are applied from this fiscal year and thus the accounting treatment
for ordinary sales transactions are applied.
Influences by the above-mentioned change on operating income, ordinary income and income before income taxes
for this fiscal year are insignificant.
Consolidated Financial Statements of 2009