Mitsubishi 2012 Annual Report Download - page 55

promulgated on December 2, 2011. The staged reduction of the
national corporate tax rate and a special reconstruction corporate
tax will apply to corporate taxes effective for the years beginning on
or after April 1, 2012.
As a result, the effective statutory tax rate used to measure the
Company’s deferred tax assets and liabilities was changed from
40.2% to 37.6% for temporary differences expected to be realized
or settled in the period from April 1, 2012 to March 31, 2015 and
to 35.2% for temporary differences expected to be realized or
settled from the years beginning April 1, 2015. The effect by the
change in these tax rates is considered immaterial.
19. Asset Retirement Obligations
(a) Overview
MMC and its consolidated subsidiaries have obligations associated
with the restoration and removal of tangible fixed assets at the end
of lease term pertaining to certain property lease agreements, and
have obligations associated with removal of hazardous substances.
(b) Method for measuring the amount of asset retirement obligations
The useful lives of assets from acquisition or construction date has
been estimated ranging from 2 years to 59 years, and the amount
of asset retirement obligations has been measured using the dis-
count rates ranging from 0.2 % to 4.4%.
(c) MMC has changed its estimate during this year as it has become
clear that the expected removal cost at the time of asset retire-
ment would exceed the original estimate. This change in esti-
mate resulted in an increase of ¥896 million ($10,913 thousand)
to the carrying amount of asset retirement obligations. Changes
in the amount of asset retirement obligations for the years
ended March 31, 2012 and 2011 were as follows:
(In millions of yen)
(In thousands
of U.S. dollars)
For the year ended March 31,
2012 2011 2012
Balance at beginning
of year (*) ¥6,358 ¥6,288 $77,363
Increase due to the
acquisition of property,
plant and equipment 24 3299
Discount accretion
expense 125 119 1,532
Decrease due to the
settlement of asset
retirement obligations (4) —(56)
Increase due to change
in estimate 896 —10,913
Others 13 (53) 160
Balance at end of year ¥7,414 ¥6,358 $90,212
(*) Effective April 1, 2010, “Accounting Standard for Asset Retirement
Obligations” (ASBJ Statement No. 18 issued on March 31, 2008) and the
“Implementation Guidance on Accounting Standard for Asset Retirement
Obligations” (ASBJ Guidance No. 21 issued on March 31, 2008) were
adopted. The balance at the beginning of year for the year ended March
31, 2011 was recorded adopting this new standard.
20. Investment and Rental Property
For the years ended March 31, 2012 and 2011, no notes are
provided as the amount of the investment and rental property is
considered immaterial.
21. Segment Information
(a) Overview of reportable segment
The reportable segments of the Group are components for which
discrete financial information is available, and for which operating
results are regularly reviewed by MMC’s decision making bodies
including the Board of Directors to make decisions about resource
allocation to the segments and to assess their performance.
The main business of the Group is automobile business, involv-
ing development, design, manufacturing and sales of automobiles
and component parts. In addition, as financial service business, we
engage in sales finance and leasing services for Group products.
Accordingly, based on the types of products and services offered,
the Group determined “automobile business” and “financial service
business” as two reportable segments.
MITSUBISHI MOTORS CORPORATION
Annual Report 2012 53