Nikon 2004 Annual Report Download - page 29

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in the statements of operations and (b) For derivatives used for hedging purpose, if derivatives qualify for hedge accounting because of high
correlation and effectiveness between the hedging instruments and the hedged items, gains or losses on derivatives are deferred until maturity
of the hedged transactions.
The foreign exchange forward contracts and currency option contracts employed to hedge foreign exchange exposures for export sales
and purchases are measured at fair value and the related unrealized gains or losses are recognized in income. Forward contracts entered into
for forecasted transactions are also measured at fair value but the unrealized gains or losses on qualifying hedges are deferred until the under-
lying transactions are completed. The foreign currency swaps used to hedge the foreign currency fluctuations of long-term debt denominated
in foreign currencies are measured at fair value and the unrealized gains or losses are included in the carrying amounts of the debt. The
interest rate swaps which qualify for hedge accounting are measured at market value at the balance sheet date and the unrealized gains or
losses are deferred until maturity as other liability or asset.
(o) Per Share Information
Basic net income per share is computed by dividing net income available to common shareholders, which is more precisely computed than under
previous practices, by the weighted-average number of common shares outstanding for the period, retroactively adjusted for stock splits.
Diluted net income per share reflects the potential dilution that could occur if securities were exercised or converted into common stock.
Diluted net income per share of common stock assumes full conversion of the outstanding convertible notes and bonds at the beginning of
the year (or at the time of issuance) with an applicable adjustment for related interest expense, net of tax and full exercise of outstanding
warrants. Diluted income per share for the year ended March 31, 2003 is not disclosed because of the Company’s net loss position.
Cash dividends per share presented in the accompanying consolidated statements of operations are dividends applicable to the respective
years including dividends to be paid after the end of the year. Cash dividends per share for the year ended March 31, 2003 are not disclosed,
because there were no dividends.
(p) New Accounting Pronouncements
In August 2002, the Business Accounting Council issued a Statement of Opinion, “Accounting for Impairment of Fixed Assets”, and in October
2003 the Accounting Standards Board of Japan (ASB) issued ASB Guidance No.6, “Guidance for Accounting Standard for Impairment of Fixed
Assets”.These new pronouncements are effective for fiscal years beginning on or after April 1, 2005 with early adoption permitted for fiscal
year ending on or after March 31, 2004.
The new accounting standard requires an entity to review its long-lived assets for impairment whenever events or changes in circumstances
indicate that the carrying amount of an asset or asset group may not be recoverable. An impairment loss would be recognized if the carrying
amount of an asset or asset group exceeds the sum of the undiscounted future cash flows expected to result from the continued use and
eventual disposition of the asset or asset group. The impairment loss would be measured as the amount by which the carrying amount of the
asset exceeds its recoverable amount, which is the higher of the discounted cash flows from the continued use and eventual disposition of the
asset or the net selling price at disposition.
The Company is currently in the process of assessing the effect of adoption of these pronouncements.
3. ACCOUNTING CHANGE
The Emerging Issues Task Force in the United States of America reached a final consensus on Issue No.00-21(“EITF 00-21”), “Revenue
Arrangements with Multiple Deliverables”. Certain foreign subsidiaries adopted the provisions of EITF 00-21 for their transactions. The revenue
recognition for the stepper products was changed from the time of completion of the installation to the time of customer acceptance.
As a result of adopting the provision of EITF 00-21, there is no effect in operating income and income before income taxes and minority
interests for the year ended March 31, 2004, as compared with the amounts calculated by the previous method.
4. INVESTMENT SECURITIES
Investment securities at March 31, 2004 and 2003 consisted of the following:
Non-Current :
Equity securities
Trust bonds, debentures and other
Total
Thousands of
U.S. Dollars
2004
$516,524
9
$516,533
2003
¥37,485
49
¥37,534
2004
¥54,591
1
¥54,592
Millions of Yen