Mitsubishi 2011 Annual Report Download - page 46

rates. In order to manage those risks, MMC and its consolidated
subsidiaries enter into various derivative agreements including
forward foreign exchange contracts and interest rate swaps.
Forward foreign exchange contracts are utilized to manage risks
arising from forecast exports of finished goods and related foreign
currency receivables. Interest rate swaps are utilized to manage
interest rate risk for loans. MMC and its consolidated subsidiaries
do not utilize derivatives for speculation or trading purposes.
Derivative financial instruments are recorded at fair value,
excluding certain instruments described below which are recorded
in accordance with the special hedge provisions of the accounting
standard.
Forward foreign exchange contracts related to forecast exports
of finished goods are accounted for using deferral hedge account-
ing. Deferral hedge accounting requires unrealized gains or losses
to be deferred as liabilities or assets.
MMC and its consolidated subsidiaries have also developed a
hedging policy to control various aspects of the derivative transac-
tions including authorization levels and transaction volumes. Based
on this policy, within certain limits, MMC and its consolidated
subsidiaries hedge the risks arising from the changes in foreign cur-
rency exchange rates and interest rates. Forward foreign exchange
contracts are designated to hedge the exposure to variability in
expected future cash flows.
For interest rate swaps accounted for as special hedges, instead
of measuring hedge effectiveness, confirmation of the conditions
for special hedge accounting is carried out.
2. Changes in Accounting Policies
(Accounting Standards for Asset Retirement Obligations)
“Accounting Standards for Asset Retirement Obligations” (ASBJ
Statement No. 18, issued on March 31, 2008) and “Guidance
on Accounting Standard for Asset Retirement Obligations” (ASBJ
Guidance No. 21, issued on March 31, 2008) have been applied
from this fiscal year. Accordingly, operating income decreased by
¥288 million ($3,465 thousand) and income (loss) before income
taxes and minority interests decreased by ¥3,319 million ($39,927
thousand) as compared to the amount that would have been
recorded under the previous method.
(Accounting Standards for Presentation of Comprehensive Income)
“Accounting Standards for Presentation of Comprehensive Income”
(ASBJ Statement No.25, issued on June 30, 2010) has been applied
from this fiscal year. In accordance with this new standard, a con-
solidated statement of comprehensive income for the year ended
March 31, 2010 is not presented. The comparative information for
the year ended March 31, 2010 is disclosed in Note 13.
3. U.S. Dollar Amounts
The U.S. dollar amounts in the accompanying consolidated financial
statements are included, solely for convenience, at ¥83.15 =
U.S.$1.00, the exchange rate prevailing on March 31, 2011. This
translation should not be construed as a representation that the
Yen amounts represent or have been, or could be, converted into
U.S. dollars at that or any other rate.
4. Notes and Accounts Receivable–Trade, and Finance
Receivables
The outstanding balances of trade notes and accounts receivable
sold to others which have been deducted from the respective
accounts amounted to ¥14,300 million ($171,978 thousand) and
¥18,000 million as of March 31, 2011 and 2010, respectively.
5. Property, Plant and Equipment
Accumulated depreciation of property, plant and equipment at
March 31, 2011 and 2010 was ¥1,071,675 million ($12,888,464
thousand) and ¥1,099,678 million, respectively.
Impairment losses were recognized in the following asset groups
for the years ended March 31, 2011 and March 31, 2010:
(In millions
of yen)
(In thousands
of U.S. dollars)
For the year ended March 31, 2011
Location Application Assets Impairment loss amount
Yokohama,
Kanagawa
and others
(18 sites)
Assets used
in sales
operations
Land,
buildings and
others ¥ 76 $ 920
Imabari,
Ehime and
others
(8 sites) Idle assets
Land,
buildings and
others 9 115
The
Netherlands
and others
(5 sites)
Production
facilities
Machinery and
equipment,
furniture and
fixtures and
others 2,891 34,774
¥2,977 $35,810
MITSUBISHI MOTORS CORPORATION
Annual Report 2011
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