Toyota 2010 Annual Report Download - page 71

TOYOTA ANNUAL REPORT 2010 69
dividing net income attributable to Toyota Motor
Corporation by the weighted-average number of
shares outstanding during the reported period.
The calculation of diluted net income attributable
to Toyota Motor Corporation per common share
is similar to the calculation of basic net income
attributable to Toyota Motor Corporation per
share, except that the weighted-average number
of shares outstanding includes the additional
dilution from the assumed exercise of dilutive
stock options.
Stock-based compensation
Toyota measures compensation expense for its
stock-based compensation plan based on the
grant-date fair value of the award.
Other comprehensive income
Other comprehensive income refers to revenues,
expenses, gains and losses that, under U.S. GAAP
are included in comprehensive income, but
are excluded from net income as these amounts
are recorded directly as an adjustment to
shareholders equity. Toyotas other comprehensive
income is primarily comprised of unrealized
gains/losses on marketable securities designated
as available-for-sale, foreign currency translation
adjustments and adjustments attributed to
pension liabilities or minimum pension liabilities
associated with Toyotas defi ned benefi t pension
plans.
Accounting changes
In December 2007, FASB issued updated
guidance of accounting for and disclosure
of business combinations. This guidance
establishes principles and requirements for
how the acquirer recognizes and measures
the identifi able assets acquired, the liabilities
assumed, any noncontrolling interest, and the
goodwill acquired in a business combination or a
gain from a bargain purchase. Also, this guidance
provides several new disclosure requirements
that enable users of the fi nancial statements
to evaluate the nature and fi nancial eff ects of
the business combination. Toyota adopted this
guidance from the business combinations on
and after the beginning of fi scal year begun on
or after December 15, 2008. The adoption of
this guidance did not have a material impact on
Toyotas consolidated fi nancial statements.
In December 2007, FASB issued updated
guidance of accounting for and disclosure
of consolidation. This guidance establishes
accounting and reporting standards for the
noncontrolling interest in a subsidiary and for
the deconsolidation of a subsidiary. Toyota
adopted this guidance from the fi scal year
begun on or after December 15, 2008. As a result,
noncontrolling interest, formerly reported as
minority interest, is reported as shareholders
equity in the consolidated balance sheets, and
the amount of net income attributable to the
parent and to the noncontrolling interest are
identifi ed and presented in the consolidated
statements of income. Since the presentation
and disclosure requirements have been applied
retrospectively for all periods presented in the
consolidated fi nancial statements in which this
guidance is applied, certain prior year amounts
have been reclassifi ed to conform to this
guidance. The adoption of this guidance did not
have a material impact on Toyotas consolidated
fi nancial statements.
In December 2008, FASB issued updated
guidance of accounting for and disclosure
of compensation. This guidance requires
additional disclosures about postretirement
benefi t plan assets including investment policies
and strategies, classes of plan assets, fair value
measurements of plan assets, and signifi cant
concentrations of risk. Toyota adopted this
guidance from the fi scal year ended after
December 15, 2009. The adoption of this
guidance did not have a material impact on
Toyotas consolidated fi nancial statements.
In April 2009, FASB issued updated guidance
of accounting for and disclosure of investments.
This guidance revises the recognition and
presentation requirements for other-than-
temporary impairments of debt securities, and
contains additional disclosure requirements
related to debt and equity securities. Toyota
adopted this guidance from the fi scal year
ended after June 15, 2009. The adoption of this
guidance did not have a material impact on
Toyotas consolidated fi nancial statements.
In May 2009, FASB issued updated guidance
of accounting for and disclosure of subsequent
events. This guidance is intended to establish
general standards of accounting for and
disclosure of events that occur after the balance
sheet date but before fi nancial statements are
issued. Toyota adopted this guidance from the
fi scal year ended after June 15, 2009. The adoption
of this guidance did not have a material impact
on Toyotas consolidated fi nancial statements.
Recent pronouncements to be adopted in
future periods
In June 2009, FASB issued updated guidance of
accounting for and disclosure of transfers and
servicing. This guidance eliminates the concept
of a qualifying special-purpose entity, changes
the requirements for derecognizing fi nancial
assets, and requires additional disclosures about
transfers of fi nancial assets. This guidance is
eff ective for fi scal year beginning after November
15, 2009, and for interim period within the fi scal
year. Management is evaluating the impact of
adopting this guidance on Toyotas consolidated
fi nancial statements.
In June 2009, FASB issued updated guidance of
accounting for and disclosure of consolidation.
This guidance changes how a company
determines when a variable interest entity
should be consolidated. This guidance is eff ective
for fi scal year beginning after November 15,
2009, and for interim period within the fi scal
year. Management is evaluating the impact of
adopting this guidance on Toyotas consolidated
fi nancial statements.
Reclassifi cations
Certain prior year amounts have been reclassifi ed
to conform to the presentations as of and for the
year ended March 31, 2010.
Financial Section
Notes to Consolidated Financial Statements
Financial Section Investor Information
Corporate Information
Consolidated
Performance Highlights
Business Overview
Special Feature
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