Bridgestone 2002 Annual Report Download - page 51

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(i) Reclassification of certain other expenses
Under Japanese GAAP, impairment losses on assets, loss on volun-
tary tire recall and North American plant restructuring costs, total-
ing ¥36,935 million ($308,049 thousand) and ¥203,164 million,
are reported as other expenses for the years ended December 31,
2002 and 2001, respectively, whereas such expenses shall be
reported as a component of operating section under U.S. GAAP.
Recent pronouncements
SFAS Nos.141 and 142—In June 2001, the FASB issued SFAS
No.141, “Business Combinations,” and SFAS No.142, “Goodwill
and Other Intangible Assets.” SFAS No.141 requires business
combinations initiated after June 30, 2001 to be accounted for
using the purchase method of accounting. It also specifies the types
of acquired intangible assets that are required to be recognized and
reported separately from goodwill. The Company adopted SFAS
Nos.141 and 142 on January 1, 2002. The adoption of SFAS
No.141 did not have a material effect on its consolidated financial
position and results of operations. The impact of adopting SFAS
No.142 is discussed in (d).
SFAS No.143—In June 2001, the FASB issued SFAS No.143,
“Accounting for Asset Retirement Obligations.” SFAS No.143
requires entities to record the fair value of a liability for an asset
retirement obligation in the period in which it is incurred and
requires that the amount recorded as a liability be capitalized by
increasing the carrying amount of the related long-lived asset.
Subsequent to initial measurement, the liability is accreted to the
ultimate amount anticipated to be paid, and is also adjusted for
revisions to the timing or amount of estimated cash flows. The cap-
italized cost is depreciated over the useful life of the related asset.
Upon settlement of the liability, an entity either settles the obliga-
tion for its recorded amount or incurs a gain or loss on settlement.
SFAS No.143 is required to be adopted for fiscal years beginning
after June 15, 2002, with earlier application encouraged. The
Company has not yet determined the impact, if any, the adoption of
SFAS No.143 will have on its consolidated financial position and
results of operations.
SFAS No.144—In August 2001, the FASB issued SFAS No.144,
“Accounting for the Impairment or Disposal of Long-lived Assets.”
This statement supersedes SFAS No.121. SFAS No.144 retains
the fundamental provisions of SFAS No.121 for (i) recognition and
measurement of the impairment of long-lived assets to be held and
used; and (ii) measurement of the impairment of long-lived assets
to be disposed of by sale. The Company adopted SFAS No.144 on
January 1, 2002. The adoption of SFAS No.144 did not have a
material effect on its consolidated financial position and results of
operations.
SFAS No.145—In April 2002, the FASB issued SFAS No.145,
“Rescission of FASB Statements No.4, 44, and 64, Amendment
of FASB Statement No.13, and Technical Corrections.” SFAS
No.145 amended SFAS No.13, “Accounting for Leases,” to elimi-
nate an inconsistency between the required accounting for sale-
leaseback transactions and the required accounting for certain
lease modifications that have economic effects that are similar to
sale-leaseback transactions. SFAS No.145 also amends other
existing authoritative pronouncements to make various technical
corrections, clarify meanings, or describe their applicability under
changed conditions. The adoption of SFAS No.145 in 2002 did not
have a material effect on the Company’s consolidated financial
position and results of operations.
SFAS No.146—In June 2002, the FASB issued SFAS No.146,
“Accounting for Costs Associated with Exit or Disposal Activities.”
This statement addresses financial accounting and reporting for
costs associated with exit or disposal activities and nullifies
Emerging Issues Task Force Issue No.94-3, “Liability Recognition
for Certain Employee Termination Benefits and Other Costs to Exit
an Activity (including Certain Costs Incurred in a Restructuring).”
SFAS No.146 is effective for exit or disposal activities initiated
after December 31, 2002.
FASB Interpretation No.45—In November 2002, the FASB
issued Interpretation (“FIN”) No.45, “Guarantor’s Accounting
and Disclosure Requirements for Guarantees, Including Indirect
Guarantees of Indebtedness to Others.” The initial recognition and
measurement provisions of FIN No.45 are applicable on a prospec-
tive basis to guarantees issued or modified after December 31,
2002, and require that the Company record a liability, if any, for
the fair value of such guarantees in the balance sheet.
FASB Interpretation No.46—In January 2003, the FASB issued
FIN No.46, “Consolidation of Variable Interest Entities.” This
interpretation addresses consolidation by business enterprises of
variable interest entities (“VIE”) when certain characteristics are
present. This interpretation applies immediately to VIEs created
after January 31, 2003, and to VIEs in which an enterprise obtains
an interest after that date. Interests held in VIEs created before
February 1, 2003 are not subject to the provisions of this interpre-
tation until January 1, 2004. The Company has not yet determined
the impact, if any, the adoption of FIN No.46 will have on its
consolidated financial position and results of operations.