Nikon 1999 Annual Report Download - page 20

(e) Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation of the Company and domestic subsidiaries is computed using the declining-
balance method, while the straight-line method is applied to the property, plant and equipment of foreign subsidiaries at rates based on the
estimated useful lives of the assets.
(f) Retirement Benefits
The Company and major domestic subsidiaries have non-contributory funded pension plans covering substantially all of their employees of the
Company and such subsidiaries. Foreign subsidiaries have principally contributory pension plans.
Other domestic subsidiaries have unfunded severance payment plans and established a liability for severance indemnities at 40% of the
amount which would be required if all employees voluntarily terminated their employment at each balance sheet date.
(g) Leases
All leases are accounted for as operating leases by the Company and its domestic subsidiaries. Under Japanese accounting standards for
leases, finance leases that deem to transfer ownership of the leased property to the lessee are to be capitalized, while other finance leases are
permitted to be accounted for as operating lease transactions if certain “as if capitalized” information is disclosed in the notes to the lessee’s
financial statements.
(h) Income Taxes
Effective April 1, 1998, the Company and consolidated subsidiaries adopted accounting for allocation of income taxes based on the asset and
liability method. The cumulative effect of the application of interperiod tax allocation in prior years in the amount of ¥8,725 million ( $72,380
thousand ) is included as an adjustment to retained earnings as of April 1, 1998.
Deferred income taxes are recorded to reflect the impact of temporary differences between assets and liabilities recognized for financial
reporting purposes and such amounts recognized for tax purposes together with the tax effect of loss carryforwards. These deferred taxes are
measured by applying currently enacted tax laws to the temporary differences.
(i) Research and Development Expenses
Research and development expenses are charged to income as incurred.
(j) Foreign Currency Transactions
Balances denominated in foreign currencies, except for those hedged by forward exchange contracts, are translated into Japanese yen at the
current exchange rates in effect at each balance sheet date for monetary current assets and liabilities, and at historical rates for non-current
assets and liabilities. Foreign currency balances hedged by forward exchange contracts are translated into Japanese yen at the contracted
rates. Exchange and translation gains or losses are credited or charged to income as incurred.
(k) Foreign Currency Financial Statements
The balance sheet accounts and revenue and expense accounts of the foreign subsidiaries are translated into Japanese yen at the current
exchange rates as of the balance sheet date except for shareholders’ equity, which is translated at the historical exchange rates. The
differences resulting from such translations are reflected in the accompanying consolidated balance sheets as investments and other assets -
other.
(l) Per Share Information
Net income per share is computed based on the weighted average number of shares of common stock outstanding during each year. Diluted
net income per share is not disclosed because it is anti-dilutive.
Cash dividends per share shown in the consolidated statements of operations are presented on an accrual basis and include interim
dividends paid and year ended dividends to be approved after the balance sheet date.
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