Isuzu 2015 Annual Report Download - page 28

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employment as of the balance sheet date is recognized as retirement
benefit obligation.
i) Income Taxes
Income taxes are accounted for on an accrual basis. Deferred tax
assets and liabilities are recognized for the future tax consequences
attributable to differences between the financial statements carrying
amounts of existing assets and liabilities and their respective tax bases.
Deferred tax assets and liabilities are measured using enacted tax
rates expected to apply to taxable income in the years in which those
temporary differences are expected to be recovered or settled. The
effect of change in tax rate is recognized in income in the period of the
change.
j) Net Income per Share
Net income per share of common stock is calculated based upon the
weighted average number of shares of common stock outstanding
during each year.
Basis for the calculation of net income per share at March 31, 2015 is
as follows:
Thousands of
Millions of yen U.S. dollars
Net Income ¥ 117,060 $ 974,122
Net income pertaining to common stock ¥ 117,060 $ 974,122
Average number of outstanding shares:
Common stock: 840,083,865
k) Appropriation of Retained Earnings
The appropriation of retained earnings is recorded in the fiscal year
in which such appropriation is approved by the board of directors or
shareholders.
l) Cash and Cash Equivalents
For the purpose of the consolidated statements of cash flows, the
Company considers all highly liquid investments with a maturity of
three months or less to be cash equivalents.
Reference for reconciliation between cash and cash equivalents
at end of the consolidated financial year is in Note 15. Consolidated
statements of cash flows, (1) Reconciliation for cash status between
balance sheets and cash flows.
m) Adoption of New Accounting Standard
(Adoption of Accounting Standard for Retirement Benefits and relat-
ed guidance)
Effective from the current consolidated fiscal year, the Company
and its consolidated subsidiaries applied provisions set forth in Section
35 of “Accounting Standard for Retirement Benefits” (ASBJ Statement
No.26 of March 26, 2015) and Section 67 of “Guidance of Accounting
Standard for Retirement Benefits” (ASBJ Statement No.25 of May
17, 2012), and as a result it adopted in their entirety the “Accounting
Standard for Retirement Benefits” (ASBJ Statement No.26, May 17,
2012, and hereinafter called “Accounting Standard for Retirement
Benefits”) and its implementation guidance – “Guidance on Accounting
Standard for Retirement Benefits” (ASBJ Guidance No.25, March 26,
2015, and hereinafter called “Guidance on Accounting Standard for
Retirement Benefits”). Consequently, the Company and its consolidated
subsidiaries revised the calculation method of retirement benefit
obligations and past service cost in such ways that the method of
attributing expected benefit to periods was changed from the one
based on service-period to the projected benefit method, and the
rate of discount from the one based on years similar to the average
remaining service years of employees to the single weighted average
rate of discount which reflects amount to be paid each of the projected
years of retirement benefit payment and the length of such years.
In accordance with transitional accounting as stipulated in Section 37
of “Accounting Standard for Retirement Benefits”, the effect of change
to the calculation method of retirement benefit obligations and past
service cost was deducted from retained earnings at the beginning of
the current consolidated fiscal year.
As a result, the liability for retirement benefits increased by 11,216
million yen ($93,334 thousands) and retained earnings decreased by
11,169 million yen ($92,940 thousands) as of April 1, 2014. On the other
hand, the impact of such changes was immaterial to operating income,
ordinary income and income before income taxes.
The impact to net income per share was also immaterial, while net
assets per share decreased by 13.29 yen ($0.11).
(Application of Accounting Standard for Business Combinations)
Effective from the current consolidated fiscal year, the Company
adopted “Revised Accounting Standard for Business Combinations”
(ASBJ Statement No.21, September 13, 2013), “Revised Accounting
Standard for Consolidated Financial Statements” (ASBJ Statement
No.22, September 13, 2013) and “Revised Accounting Standard for
Business Divestitures” (ASBJ Statement No.7, September 13, 2013)
(excluding Section 39 of “Revised Accounting Standard for Consolidated
Financial Statements”) as these accounting standards are applicable to
fiscal years beginning on or after April 1, 2014.
With the application of such standards, the Company adopted the
method of posting as capital surplus the difference resulting from
changes in equity with respect to subsidiaries that are still under its
control, and that of recognizing acquisition-related costs as expenditures
incurred for the consolidated fiscal year. For the business combination
implemented after the beginning of this current fiscal year, the
acquisition costs calculated by a tentative accounting method are to
be confirmed and revised. Also, this revision affects the consolidated
financial statement for the fiscal year during which the business
combination is done.
“Revised Accounting Standard for Business Combinations” and
related matters were applied in accordance with the transitional
handling specified in Section 58-2(4) of “Revised Accounting Standard
for Business Combinations”, Section 44-5(4) of “Revised Accounting
Standard for Consolidated Financial Statements”, and Section 57-4(4)
of “Revised Accounting Standard for Business Divestitures”, and the
Company applied these accounting standards from the beginning of the
current consolidated fiscal year and continues to do so thereafter.
Consequently, operating income, ordinary income and income before
income taxes for the current consolidated fiscal year rose by 438 million
yen ($3,648 thousands), respectively. On the other hand, capital surplus
at the end of the reporting consolidated year declined by 8,767 million
yen ($72,962 thousands).
Cash flow related to acquisition or sale by the Company of a
subsidiary’s shares, where such acquisition or sale would not change
the scope of consolidation, was included in “Cash Flow from Financing
Activities” while cash flow related to acquisition or sale by the Company
of a subsidiary’s shares, where such acquisition or sale would change the