Suzuki 2010 Annual Report Download - page 36

SUZUKI MOTOR CORPORATION 35
As for directors and corporate auditors of the Company, the amount to be paid at the end of scal year had been posted
pursuant to the Company’s regulations on the retirement allowance of directors and corporate auditors. However, the Com-
pany’s retirement benet system for them was abolished at the closure of the ordinary general meeting of shareholders held
on June 2006. And it was approved at ordinary general meeting of shareholders that reappointed directors and corporate
auditors are paid their retirement benet at the time of their retirement, based on their years of service. Estimated amount of
such retirement benets is appropriated at the end of this scal 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 benet cost and retirement benet 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. Dis-
count 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 inuence on the calculation
of retirement benet 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 benet cost. But by focusing on low-risk investments, this inuence 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 respec-
tive 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) Reclassication
Certain reclassications of previously reported amounts are made to conform with current classications.
NOTE 3:Changesinbasicmattersforpreparingconsolidatednancialstatements
(a) Revenue recognition
The “Accounting Standards for Construction Contracts” (Accounting Standards Board of Japan; ASBJ Statement No.15,
December 27, 2007) and “Guidance on Accounting Standards for Construction Contracts (ASBJ Guidance No. 18, Decem-
ber 27, 2007) are applied from this scal year. The percentage-of-completion method is applied to contracts with conrmed
results for progress of construction contracts implemented during this scal year until the end of this scal year, and the
completed-contract method is applied to other contracts.
This change gives no inuences on the net sales, operating income and income before income taxes for this scal year.
(b) Applicationofthe“PartialAmendmentstoAccountingStandardforRetirementBenets(Part3)”
The “Partial Amendments to Accounting Standard for Retirement Benets (Part3)” (ASBJ Statement No.19, July 31, 2008)
is applied from this scal year.
This change gives no inuences on the operating income and income before income taxes for this scal year.
In addition, there is no balance amount of retirement benet liabilities to accrue with the application of this accounting
standard.
Consolidated Financial Statements