Alpine 2007 Annual Report Download - page 23

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Financial statements of overseas consolidated subsidiaries are translated
into Japanese yen using the year-end rate for assets and liabilities,
except that net assets accounts and investments in unconsolidated
subsidiaries and affiliated companies not on the equity method are
translated using the historical rates. The average exchange rate for the
year is used for translation of income and expenses.
(15) Research and development costs
Research and development costs are charged to income when incurred
and included in costs and expenses.
(16) Income taxes
The Companies recognize tax effects of temporary differences between
the financial statement carrying amounts and the tax basis of assets
and liabilities. The provision for income taxes is computed based on the
pretax income included in the consolidated statement of income. The
asset and liability approach is used to recognize deferred tax assets
and liabilities for the expected future tax consequences of temporary
differences.
(17) Amounts per share of common stock
Computations of net income per share of common stock are based on
the weighted-average number of shares of common stock outstanding
during each fi scal year.
Diluted net income per share is computed based on the weighted-
average number of common stock and contingent issuance of common
stock from convertible debentures.
Cash dividends per share represent actual amounts applicable to the
respective years.
(18) Software costs
The Company included software in other assets and depreciated it using
the straight-line method over the estimated useful lives (from three to fi ve
years).
(19) Derivative transactions and hedge accounting
The Companies state derivative financial instruments at fair value and
recognize changes in the fair value as gains or losses unless derivative
fi nancial instruments are used for hedging purposes.
If derivative fi nancial instruments are used as hedges and meet certain
hedging criteria, the Companies defer recognition of gains or losses
resulting from changes in fair value of derivative financial instruments
until the related losses or gains on the hedged items are recognized.
Also, if interest rate swap contracts are used as hedges and meet
certain hedging criteria, the net amount to be paid or received under the
interest rate swap contract is added to or deducted from the interest on
the assets or liabilities for which the swap contract was executed.
(20) Reclassifi cations
Certain prior year amounts have been reclassified to conform to the
2007 presentation. These changes had no impact on previously reported
results of operations.
(21) Accounting Standard for Presentation of Net Assets in the
Balance Sheet
Effective from the year ended March 31, 2007, the Company and
its consolidated subsidiaries adopted the new accounting standard,
“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”).
The consolidated balance sheet as of March 31, 2007 prepared in
accordance with the New Accounting Standards comprises three
sections, which are the assets, liabilities and net assets sections. The
consolidated balance sheet as of March 31, 2006 prepared pursuant to
the previous presentation rules comprises the assets, liabilities, minority
interests and stockholders’ equity sections.
Under the New Accounting Standards, the following item is presented
differently at March 31, 2007 compared to March 31, 2006. Minority
interests are included in the net assets section at March 31, 2007.
Under the previous presentation rules, companies were required to
present minority interests in the liabilities section and between the long-
term liabilities and the stockholders’ equity sections, respectively.
The adoption of the New Accounting Standards had no impacts on the
consolidated statement of income for the year ended March 31, 2007.
Also, if the New Accounting Standards had not been adopted at March
31, 2007, the stockholders’ equity amounting to ¥119,056 million (US$
1,008,522 thousand) would have been presented.
(22) Accounting Standard for Statement of Changes in Net
Assets
Effective from the year ended March 31, 2007, the Company and
its consolidated subsidiaries adopted the new accounting standard,
“Accounting Standard for Statements of Changes in Net Assets”
(Statement No.6 issued by the Accounting Standards Board of Japan
on December 27, 2005), and the implementation guidance for the
accounting standard for statement of changes in net assets (the
Financial Accounting Standard Implementation Guidance No. 9 issued
by the Accounting Standards Board of Japan on December 27, 2005),
(collectively, “the Additional New Accounting Standards”).
The Company prepared the accompanying consolidated statement of
changes in net assets for the year ended March 31, 2007 in accordance
with the Additional New Accounting Standards. The accompanying
consolidated statement of shareholders’ equity for the year ended March
31, 2006 and 2005, which was voluntarily prepared for inclusion in the
consolidated financial statements, has not been adapted to the new
presentation rules of 2007.
(23) Impairment of Fixed Assets
Effective from the year ended March 31, 2006, the Company and its
consolidated subsidiaries adopted the new accounting standard for
impairment of fixed assets (“Opinion Concerning Establishment of
Accounting Standard for Impairment of Fixed Assets” issued by the
Business Accounting Deliberation Council on August 9, 2002) and “the
Implementation Guidance for the Accounting Standard for Impairment
of Fixed Assets” (the Financial Accounting Standard Implementation
Guidance No.6 issued by the Accounting Standard Board of Japan on
October 31, 2003).
As a result of adopting this standard and the guidance, the company
recorded no impairment and the income before income taxes was the
same compared with what would have been reported under the previous
accounting policy.