Wacom 2007 Annual Report Download - page 26

(7) Intangible assets -
The Company amortizes intangible assets using the
straight-line method.
(8) Software -
Software for internal use is amortized by the
straight-line method over an estimated useful life (5
years). Software to be sold is amortized based on the
estimated volume of sales, with the minimum
amortization amount calculated based on a useful life
of 3 years.

(9) Provisions for bonuses to employees -
The provisions for bonuses to employees are provided
based on the estimated amounts expected to be paid
for employees.

(10) Provisions for bonuses to directors and statutory
corporate auditors -
The provisions for bonuses to directors and statutory
corporate directors are provided based on the
estimated amounts expected to be paid for directors.
(Change in accounting policy) Eective from the year
ended March 31, 2007, the Company adopted
“Accounting Standards Board Statement No. 4,
Accounting Standard for Directors’ Bonus” issued by
the Accounting Standards Board of Japan on
November 29, 2005. The eect on net income of the
adoption of this new accounting standard was to
decrease income before income taxes by ¥29,800
thousand ($252 thousand). Regarding the eect on
segment information, it is stated in the notes for
information by industry and by geography.
(11) Accrued retirement benets for employees-
Lump-sum severance indemnity regulations of the
Company, which cover substantially all employees,
provide for benet payments determined by reference
to the employee’s current basic rate of pay, length of
service, position in the Company and termination
circumstances. The accrued retirement benets
represent the actuarially calculated present value of
projected benet obligation except for, as permitted
under the standard, the unrecognized actuarial
dierences. The unrecognized actuarial dierences are
amortized on a straight-line basis over 5 years
beginning in the year after they arise.

(12) Accrued retirement benets for directors and
statutory corporate auditors -
The Company provides an accrued lump-sum
severance indemnities for directors and statutory
corporate auditors at the full amount which would be
required to be paid if all directors and statutory
corporate auditors retired at the balance sheet date
based on the Company’s internal regulations.
(13) Income taxes -
Deferred income taxes are recognized using the asset
and liability method. This method is used to recognize
deferred tax assets and liabilities for the expected
future tax consequences of temporary dierences
between the carrying amounts of assets and liabilities
for nancial reporting purposes and the amounts used
for income tax purposes.

(14) Leases -
Leases that transfer substantially all the risks and
rewards of ownership of the assets are accounted for
as nance leases. Leases that do not transfer
ownership of the assets at the end of the lease term
are accounted for as operating leases in accordance
with accounting principles and practices generally
accepted in Japan.

(15) Consumption taxes -
Consumption taxes are excluded from revenue and
expense accounts which are subject to such taxes.
(16) Revaluation of assets and liabilities of the
consolidated subsidiaries-
All assets and liabilities of the consolidated
subsidiaries are revalued at their respective fair value
on acquisition, if applicable.
(17) Foreign currency translation -
Foreign currency transactions are translated using foreign
exchange rates prevailing at the transaction dates.
All monetary assets and liabilities denominated in
foreign currencies, whether they are long-term or
short-term, are translated into Japanese yen at the
exchange rates prevailing at the balance sheet date.
Resulting gains and losses are included in the
consolidated statements of income.
All assets and liabilities of consolidated subsidiaries
overseas are translated at current rates at the
respective balance sheet date and all the income and
expense accounts are translated at average rates for
respective periods. Foreign currency translation
adjustments are presented as a component of “Net
Assets” in the consolidated nancial statements.

(18) Reclassications -
Certain reclassications of the nancial statements
and related footnote amounts in the year ended March
31, 2006 have been made to conform to the
presentation in the year ended March 31, 2007.

(19) Accounting standard for presentation of net
assets in the balance sheet -
Eective for the year ended March 31, 2007, the
Company adopted new accounting standards:
“Accounting Standard for Presentation of Net Assets in
the Balance Sheet” (Statement No. 5 issued by the
Accounting Standards Board of Japan on December 9,
2005), and the implementation guidance for the
accounting standard for presentation of net assets in
the balance sheet (the Financial Accounting Standard
Implementation Guidance No. 8 issued by the
Accounting Standards Board of Japan on December 9,
2005), (collectively, the “New Accounting Standards”).
25