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63
Annual Report 2006
Goodwill
Under IFRS 3 “Business Combinations,” goodwill should not be amortized and IAS 36 “Impairment of
Assets” should be applied. The Group amortizes goodwill by the straight-line method over periods not
exceeding 20 years as indicated in Note 1. (i) Intangible assets.
Retirement benefits
Under IAS 19, the unrecognized net obligation upon the application of new accounting principles and
practices should be recognized immediately. The accounting principles and practices for this obligation
are indicated in Note 10.
Scope of consolidation
Under IAS 27 and its interpretations SIC 12, Special Purpose Entities (SPEs) should be consolidated when
the substance of the relationship between an entity and an SPE indicates that the entity controls the SPE.
The Company and its consolidated subsidiaries in Japan have not consolidated certain qualifying
SPEs in conformity with Japanese GAAP.
Uniformity of accounting policies
Under IAS 27, unification of accounting policies for consolidated accounts is required. Under IAS 28,
uniformity of accounting policies for affiliates is required as well.
Under Japanese GAAP, uniformity of accounting policies is required for similar transactions and events
under similar circumstances, in principle. However, it is permitted to use financial statements prepared in
accordance with local GAAP of foreign subsidiaries, unless the difference in accounting principles and prac-
tices will lead to unreasonable consequences. The consolidated subsidiaries within the Group outside Japan
have adopted the accounting principles and practices in their respective countries as indicated in Note 1. (a)
Basis of presenting consolidated financial statements and the principles of consolidation while some sub-
sidiaries have adopted IFRS in countries where IFRS can be applied.
As a result of future revisions of IFRS or other effects, there is a possibility that certain differences may
arise for the accounting principles and practices that are not discussed above.
3. U.S. Dollar Amounts
The Company and its consolidated subsidiaries in Japan maintain their books of account in yen. The
U.S. dollar amounts included in the accompanying consolidated financial statements and the notes thereto
represent the arithmetic results of translating yen into U.S. dollars at ¥118 = US$1, the approximate
exchange rate at March 31, 2006.
The U.S. dollar amounts are presented solely for the convenience of readers and the translation is not
intended to imply that the assets and liabilities which originated in yen have been or could readily be
converted, realized or settled in U.S. dollars at the above or any other rate.