Epson 2014 Annual Report Download - page 60

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the tax basis of assets and liabilities.
The Company applies the consolidated tax return system for the calculation of income taxes. Under the
consolidated tax return system, the Company consolidates all wholly owned domestic subsidiaries based on
Japanese tax regulations.
(13) Accounting method for retirement benefits
Projected benefit obligations are attributed to each period by the straight-line method over the estimated years of
service of the eligible employees.
Recognized prior service costs are amortized based on the straight-line method over a period of five years
beginning at the date of adoption of the plan amendment on Consolidated Statements of Operations. Recognized
actuarial gains and losses are amortized based on the straight-line method over a period of five years starting
from the beginning of the subsequent year on Consolidated Statements of Operations.
The unrecognized actuarial gains and losses and the unrecognized prior services costs have been recorded as
“Remeasurements of defined benefit plans” in “Accumulated other comprehensive income” after the effect of
income taxes in Net assets.
(14) Provision for recycling costs
At the time of sale, provision for recycling costs is calculated based on the estimated future returns of consumer
personal computers.
(15) Revenue recognition
Revenue from sale of goods is recognized at the time when goods are shipped. Revenue from services is
recognized when services are rendered and accepted by customers.
(16) Research and development costs
Research and development costs are charged as incurred.
(17) Leases
Epson leases certain office space, machinery and equipment and computer equipment from third parties using
capital leases. Most of the capital leases are other than those under which ownership of the assets will be
transferred to the lessee at the end of the lease term, and are depreciated/amortized in accordance with the
straight-line method over the periods of the leases, assuming no residual value.
(18) Net income per share
Net income per share is computed based on the weighted-average number of common shares outstanding during
each fiscal period.
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