Epson 2007 Annual Report Download - page 65

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Annual Report 2007
Prior to June 23 2006, with respect to the Company’s directors and statutory auditors, who are not covered by
the benefit plans for employees described above, provision was made for retirement benefits based on internal rules
regarding directors’ and statutory auditors’ retirement benefits. On June 23, 2006, the plan was terminated and the
benefits granted prior to the termination date were included in other long-term liabilities account.
(14) Accrued recycle costs
At the time of sale, accrued recycle costs are provided for the estimated future returns of consumer personal com-
puters.
(15) Presentation of equity and consolidated statements of changes in equity
On December 9, 2005, the ASBJ issued an Accounting Standard — ASBJ Statement No. 5 “Accounting Standard
for Presentation of Net Assets in the Balance Sheet” and its Implementation Guidance — ASBJ Guidance No. 8
“Guidance on Accounting Standard for Presentation of Net Assets in the Balance Sheet”. Effective as of April 1,
2006, Epson has adopted these new accounting standards. Under these new accounting standards, certain items,
which were previously presented as assets or liabilities, are now presented as components of equity. Such items
include minority interest in subsidiaries and any unrealized gains or losses on derivative instruments.
On December 27, 2005, the ASBJ issued another Accounting Standard — ASBJ Statement No. 6 “Accounting
Standard for Statement of Changes in Net Assets” and its Implementation Guidance — ASBJ Guidance No. 9
“Guidance on Accounting Standard for Statement of Changes in Net Assets”. Effective as of April 1, 2006, Epson
has adopted these new accounting standards. The consolidated statements of changes in shareholders’ equity,
which was previously voluntarily prepared in line with the international accounting practices, is now required under
these new accounting standards and has been renamed “Consolidated Statements of Changes in Equity” from the
current fiscal year.
(16) Revenue recognition
Revenue from sale of goods is recognized at the time when goods are shipped. Revenue from services is recog-
nized when services are rendered and accepted by customers.
(17) Research and development costs
Research and development costs are expensed as incurred.
(18) Leases
Epson leases certain office space, machinery and equipment and computer equipment from third parties.
Under Japanese accounting standards, capital leases, other than those under which ownership of the assets
will be transferred to the lessee at the end of the lease term, are allowed to be accounted for as operating leases
with footnote disclosure of the estimated acquisition cost, estimated accumulated depreciation and future estimated
lease payments.
Epson has recorded substantially all leases as operating leases in the manner described in the preceding para-
graph.
(19) Net income per share
Net income per share is computed based on the weighted-average number of common shares outstanding during
each fiscal period.
(20) Dividends
Dividends are charged to retained earnings in the fiscal year in which they are paid after approval by the sharehold-
ers. In addition to year-end dividends, the board of directors may declare interim cash dividends by resolution to the
shareholders of record as of September 30 of each year.
(21) Reclassifications
Certain prior year amounts have been reclassified to conform to the presentations for the year ended March 31,
2007.