Mitsubishi 2002 Annual Report Download - page 48

46
(f) Depreciation
Depreciation of property, plant and equipment at MMC and its consolidated subsidiaries is principally calculated by the
declining-balance method or the straight-line method over the estimated useful lives of the respective assets.
Significant renewals and additions are capitalized at cost. Maintenance and repairs are charged to expenses.
(g) Retirement benefits
Accrued retirement benefits for employees at March 31, 2002 and 2001 have been provided mainly at an amount calcu-
lated based on the retirement benefit obligation and the fair value of the pension plan assets as adjusted for unrecognized
actuarial gain or loss and unrecognized prior service cost.
The transition difference of ¥128,370 million arising from the adoption of the new accounting standard for retirement
benefits is charged to expenses and the amortization cost is included in other income and expenses for the year ended
March 31, 2001 and it is not presented for the year ended March 31, 2002. See Notes 3(b) and 11.
Prior service cost is being amortized by the straight-line method over periods of 10 to 22 years and 10 to 18 years in the
years ended March 31, 2002 and 2001, respectively, which are within the estimated average remaining service years of the
employees.
Actuarial gain and loss are amortized by the straight-line method within 10 to 22 years and 10 to 18 years for the years
ended March 31, 2002 and 2001, respectively, which is within the estimated average remaining service years of the em-
ployees.
Certain directors and corporate auditors of MMC and its domestic consolidated subsidiaries are customarily entitled to
lump-sum payments under their respective unfunded severance benefit plans subject to the stockholders’ approval. Provi-
sion for severance benefits for those officers have been made at an estimated amount.
(h) Revenue recognition
Revenue is generally recognized on sales of products at the time of shipment.
Certain domestic and foreign subsidiaries recognize revenues by the installment sales method whereby gross profit on
such sales is deferred and credited to income in proportion to the amount of the installment receivables which become due.
(i) Income taxes
MMC and its consolidated subsidiaries provide for income taxes applicable to all items included in the consolidated state-
ments of operations regardless of when such taxes are payable. Income taxes arising from temporary differences in the
recognition of assets and liabilities for tax and financial reporting purposes are reflected as deferred income taxes in the
consolidated financial statements by the asset and liability method.
Deferred tax assets and liabilities were measured using the enacted tax rates which will be in effect when the temporary
differences are expected to reverse.
(j) Translation of foreign currency accounts
The accounts of the consolidated foreign subsidiaries are translated into yen as follows:
a. Asset and liability items are translated at the rate of exchange in effect on the balance sheet date of each subsidiary;
b. Components of stockholders’ equity are translated at their historical rates at acquisition or upon occurrence; and
c. Revenues, expenses and cash flow items are translated at the average rate for the financial year of each subsidiary.
Translation adjustments are included in “Stockholders’ equity” and “Minority interests.”