Casio 2000 Annual Report Download - page 29

27
ing average cost or market. Other marketable securities are
stated at cost, which approximates market.
Commencing with the year ended March 31, 1999, the
Company and its consolidated domestic subsidiaries record re-
coveries of write-downs of securities in accordance with a
revision in the Corporation Tax Law.
Allowance for doubtful accounts—The Company and its do-
mestic subsidiaries provide for doubtful accounts principally
at an estimated amount of probable bad debt plus the maxi-
mum amount deductible under Japanese tax regulations.
Foreign subsidiaries provide for doubtful accounts at an esti-
mated amount of probable bad debt.
Inventories—Inventories are stated principally at the lower of
cost (first-in, first-out) or market (replacement cost or net re-
alizable value).
Property, plant and equipment—Property, plant and equip-
ment is stated at cost. Depreciation is determined by the
declining-balance method at rates based on estimated useful
lives except for the leased equipment. The leased equipment
is depreciated by the straight-line method over the lease term.
In accordance with revisions of the Corporation Tax Law,
buildings, excluding building fixtures, acquired after March
31, 1998 are depreciated using the straight-line method. Also
effective April 1, 1998, in accordance with revisions referred
to above, the Company and its consolidated domestic sub-
sidiaries shortened the estimated useful lives of buildings,
excluding building fixtures.
Software costs— In accordance with the provisional rule of
the JICPA’s Accounting Committee Report No. 12 “Practical
Guidance for Accounting for Research and Development
Costs, etc.” (the “Report”), the Group accounts for software
which was included in other assets in investments and other
assets in the same manner in 2000 as in 1999.
Pursuant to the Report, software is categorized by the
following purposes and depreciated using the following two
methods.
(Software for market sales) The production costs for mas-
ter product are capitalized and depreciated over no more than
3 years by the projected revenue basis.
(Software for internal use) The acquisition costs of soft-
ware for internal use are depreciated over 5 years by the
straight-line method.
Employees’ severance and retirement benefits—Under the
terms of the employees’ severance and retirement plan, eligi-
ble employees are entitled under most circumstances, upon
mandatory retirement or earlier voluntary severance, to sever-
ance payments based on compensation at the time of
severance and years of service.
Employees’ severance and retirement benefits of the Com-
pany and some of its consolidated subsidiaries are covered by
two kinds of pension plans. Remaining consolidated sub-
sidiaries mainly provide for the allowance for employees’ sev-
erance and retirement benefits in amounts required had all
employees retired voluntarily at the balance sheet date.
Certain of such consolidated subsidiaries cover a part of em-
ployees’ severance and retirement benefits by a pension plan.
Excess portion of allowance for employees’ severance and
retirement benefits due to introduction of the pension plan
has been amortized on a straight-line basis over the amortiza-
tion period of prior service costs.
Accounting for certain lease transactions—Finance leases,
which do not transfer titles to lessees, are accounted for in the
same manner as operating leases under accounting principles
generally accepted in Japan.
Amortization of goodwill—Goodwill is amortized over 5
years by the straight-line method.
Income taxes—Taxes on income consist of corporation,
inhabitants and enterprise taxes.
Deferred income taxes are provided for the items relating
to intercompany profit elimination in connection with calcu-
lation of consolidated results of operations. In addition, some
foreign subsidiaries recognize the deferred income taxes in
accordance with accounting practices prevailing in their re-
spective countries of domicile.
The Group recognizes 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 income before income taxes
included in the statement of operations of each of the Group.
The asset and liability approach is used to recognize deferred
tax assets and liabilities for the expected future tax conse-
quences of temporary differences.
The amount of deferred income taxes attributable to the
net tax effects of the temporary differences when the
Company initially applied the tax effect accounting at April
1, 1998 was reflected as an adjustment of ¥6,308 million to
the retained earnings brought forward from the previous
year.
Appropriations of retained earnings—Appropriations of
retained earnings are accounted for and reflected in the
accompanying consolidated financial statements when ap-
proved by the shareholders.
Amounts per share of common stock—Net income (loss) per
share of common stock has been computed based on the
weighted average number of shares of common stock out-
standing during each fiscal year (less the treasury stock). For
diluted net income per share, the number of shares outstand-
ing is adjusted to assume the conversion of the convertible
bonds. Related interest expense, net of income taxes, is elimi-
nated.
Cash dividends per share represent the actual amount ap-
plicable to the respective years.