Mitsubishi 2014 Annual Report Download - page 46

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.
(n) Accounting Standards issued but not yet effective
“Accounting Standard for Retirement Benefits” (ASBJ Statement
No. 26, May 17, 2012) and “Guidance on Accounting Standard for
Retirement Benefits” (ASBJ Guidance No. 25, May 17, 2012)
The standard and related guidance provide guidance for the
accounting for unrecognized actuarial differences and unrecognized
prior service costs, the calculation methods for retirement benefit
obligations and service costs, and enhancement of disclosures
taking into consideration improvements to financial reporting and
international trends.
This standard and related guidance were adopted as of the end
of fiscal year ended March 31, 2014. However, revisions to the
calculation methods for retirement benefit obligations and service
costs are scheduled to be adopted from the beginning of the fiscal
year ending March 31, 2015. MMC and its consolidated subsidiar-
ies are currently evaluating the effect these modifications will have
on its consolidated results of operations and financial position
2. Accounting Changes
From this fiscal year, MMC has applied the “Accounting Standard
for Retirement Benefits” (ASBJ Statement No. 26. May 17, 2012.
Hereinafter referred to as the “Standard”) and the “Guidance on
the Accounting Standard for Retirement Benefits” (ASBJ Guidance
No. 25, May 17, 2012. Hereinafter, the “Guidance”) (excluding,
however, provisions set forth in the main texts in Paragraph 35 of
the Standard and Paragraph 67 of the Guidance). In accordance
therewith, MMC has changed the method of recognizing the net
amount after deducting pension assets from retirement benefit
obligations as net defined benefit liability, and has recognized un-
recognized actuarial gains and losses and unrecognized prior service
costs within net defined benefit liability. If pension assets exceed
retirement benefit obligations, such an asset would be recognized
as others within investments and other assets.
For initial application of the Standard, etc., MMC applied the
transitional provisions in Paragraph 37 of the Standard, and has
made an adjustment of the effect of such change in remeasure-
ments of defined benefit plans in accumulated other comprehensive
income at the end of this fiscal year.
The effect of this change at the end of this fiscal year was immaterial.
3. U.S. Dollar Amounts
The U.S. dollar amounts in the accompanying consolidated financial
statements are included, solely for convenience, at ¥102.92 =
U.S.$1.00, the exchange rate prevailing on March 31, 2014. 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. Property, Plant and Equipment
Accumulated depreciation of property, plant and equipment at
March 31, 2014 and 2013 was ¥932,671 million ($9,062,104
thousand) and ¥940,905 million, respectively.
Impairment losses were recognized in the following asset groups
for the years ended March 31, 2014 and March 31, 2013:
(In millions
of yen)
(In thousands
of U.S. dollars)
For the year ended March 31, 2014
Location Application Assets Impairment loss amount
Yamaguchi,
Yamaguchi
and others
(32 sites)
Assets used
in sales
operations
Buildings, land
and others ¥ 539 $ 5,243
Chiba,
Chiba and
others
(16sites) Idle assets
Buildings, land
and others 2,032 19,749
Kurashiki,
Okayama
and others
(3sites)
Production
facilities
Machinery and
equipment,
tools, furniture
and fixture
and others 4,330 42,076
¥6,902 $67,069
MITSUBISHI MOTORS CORPORATION
Annual Report 2014
44