Mitsubishi 1999 Annual Report Download - page 46

Notes to consolidated financial statements
44
(k) Amounts per share
The computation of basic net income (loss) per share is based on the weighted average number of shares outstanding
during each year. Fully diluted net income per share is computed based on the weighted average number of shares of
common stock outstanding each year after giving effect to the dilutive potential of common shares to be issued upon the
exercise of warrants and the conversion of convertible bonds. Fully diluted net loss per share for the year ended March
31, 1998 is not presented as a loss was recorded. Cash dividends per share represent cash dividends declared as
applicable to each respective year.
(l) Appropriation of retained earnings
Cash dividends, bonuses to directors and statutory auditors and other appropriations of retained earnings are recorded in
the financial year in which the appropriations are approved at a general meeting of the stockholders.
(m) Leases
Noncancelable lease transactions are accounted for as operating leases regardless of whether such leases are classified as
operating or capital leases, except that lease agreements which stipulate the transfer of ownership of the leased property
to the lessee are accounted for as capital leases.
(n) Reclassifications
Certain amounts previously reported have been reclassified to conform to the current year.
The significant items are as follows:
a. At March 31, 1998 the legal reserve of ¥9,029 million was reclassified to retained earnings.
b. At March 31, 1998 consolidation adjustments of ¥28,096 million were reclassified to intangible assets.
c. For the year ended March 31, 1998, enterprise tax of ¥1,033 million was reclassified from selling, general and
administrative expenses to income taxes.
d. For the year ended March 31, 1998, amortization of consolidation adjustments of ¥5,532 million was reclassified to
selling, general and administrative expenses.
e. For the year ended March 31, 1998, equity in losses of unconsolidated subsidiaries and affiliates of ¥254 million was
reclassified to other non-operating expenses.
2. Changes in Accounting Policies
a. Effective April 1, 1998, certain domestic subsidiaries changed their method of computing depreciation on
buildings from the declining-balance method to the straight-line method in order to achieve a more appropriate
allocation of cost reflecting their long-term stable usage. This effect of this change was to decrease ordinary loss
by ¥1,769 million ($14,674 thousand) and to increase income before income taxes by the same amount for the year
ended March 31, 1999.
b. Most of MMC's domestic subsidiaries calculated the accrual for employees' bonuses based on the actual amount
paid in the prior period. For the year ended March 31, 1999, however, due to a recent revision to the Corporation
Tax Law of Japan as well as to the implementation of the current compensation scheme which is more dependent
on performance, these subsidiaries began calculating accrued bonuses based on the best estimate of the amounts to
be paid. Given the current business circumstances, this change was made to achieve a more accurate accrual of
employees' bonuses. The effect of this change was to decrease ordinary loss by ¥2,400 million ($19,909 thousand)
and to increase income before income taxes by the same amount for the year ended March 31, 1999.