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58 Hitachi, Ltd. Annual Report 2010
and the Company has not previously presented the segment information required to be disclosed in the footnotes to the
consolidated financial statements based on ASC 280. However, in September 2008, the SEC issued its “Foreign Issuer
Reporting Enhancements” (FIRE) rule. The FIRE rule eliminated an instruction to the Form 20-F that is filed under the Securities
Exchange Act of 1934 that permitted certain FPIs to omit segment disclosures required by ASC 280, as well as other
enhancements. This aspect of the FIRE rule regarding elimination of the ability to omit segment disclosures is effective for
fiscal years ended on or after December 15, 2009. As a result, the Company retrospectively adopted ASC 280 beginning
April 1, 2008. The Company’s consolidated financial statements for the year ended March 31, 2008 do not disclose segment
information required by ASC 280.
(z) Guarantees
The Company recognizes, at the inception of the guarantee, a liability for the fair value of the obligation undertaken in issuing
the guarantee in accordance with ASC 460, “Guarantees.”
(aa) Fair Value Measurement
The Company adopted ASC 820, “Fair Value Measurements and Disclosures” for all financial assets and liabilities and non-
financial assets and liabilities on a recurring basis on April 1, 2008 and for non-recurring valuations of non-financial assets and
non-financial liabilities on April 1, 2009. This guidance defines fair value as the price that would be received to sell an asset
or paid to transfer a liability (an exit price) in an orderly transaction between market participants at the measurement date. For
the determination of fair value, the Company considers the principal or most advantageous market where the Company would
transact and considers assumptions that market participants would use in pricing the asset or liability.
(ab) Accounting Changes
The Company adopted the provisions of ASC 805, “Business Combinations,” and the provisions of ASC 810 regarding
noncontrolling interests in a subsidiary on April 1, 2009. These provisions improve and simplify the accounting for business
combinations and the reporting of noncontrolling interests in consolidated financial statements. The provisions of ASC 805
require an acquiring entity in a business combination to recognize all the assets acquired, liabilities assumed and any
noncontrolling interest in an acquiree at the full amount of their fair values as of the acquisition date. Also, the related provisions
of ASC 810 clarify that a noncontrolling interest in a subsidiary should be reported as equity in the consolidated financial
statements and all the transactions resulting in changes in a parent’s ownership interest in a subsidiary that do not result in
deconsolidation are equity transactions. The adoption of the provisions of ASC 805 did not have a material effect on the
Company’s consolidated financial statements upon adoption, however, the additional required disclosures are presented in
note 30. The changes in equity resulting from accounting treatment in accordance with the provisions of ASC 810 are presented
in note 13.
The Company adopted the provisions regarding fair value measurements that are included primarily in ASC 820, “Fair Value
Measurements and Disclosures,” on April 1, 2009, for non-recurring valuations of non-financial assets and non-financial
liabilities, such as those used in measuring impairments of goodwill, other intangible assets, other long-lived assets and fair
value measurements of non-financial assets acquired and non-financial liabilities assumed in business combinations
consummated after the effective date. The adoption of these provisions did not have a material effect on the Company’s
consolidated financial statements.
The Company adopted the provisions of ASC 470, “Debt,” related to debt with conversion and other options on April 1, 2009.
These provisions require that issuers of convertible debt instruments that may be settled in cash or other assets upon conversion
separately account for the liability and equity components in a manner that reflects the entity’s nonconvertible debt borrowing
rate when interest cost is recognized in subsequent periods. The requirements must be applied retrospectively to all periods
presented. For the year ended March 31, 2010, the adoption of these provisions did not have a material effect on the Company’s
consolidated financial statements.