Nikon 2009 Annual Report Download - page 38

36 Nikon Annual Report 2009
(s) Per Share Information
Basic net income per share is computed by dividing net income
available to common shareholders by the weighted-average num-
ber 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.
Cash dividends per share presented in the accompanying con-
solidated statements of income are dividends applicable to the
respective years including dividends to be paid after the end of
the year.
(t) New Accounting Pronouncements
Business Combinations—On December 26, 2008, the ASBJ
issued a revised accounting standard for business combinations,
ASBJ Statement No.21, “Accounting Standard for Business Com-
binations.” Major accounting changes under the revised account-
ing standard are as follows;
(1) The current accounting standard for business combinations
allows companies to apply the pooling of interests method
of accounting when certain specific criteria are met such
that the business combination is essentially regarded as a
uniting-of-interests. The revised standard requires to
account for such business combination by the purchase
method and the pooling of interests method of accounting
is no longer allowed.
(2) The current accounting standard accounts for the research
and development costs to be charged to income as incurred.
Under the revised standard, an in-process research and
development (IPR&D) acquired by the business combina-
tion is capitalized as an intangible asset.
(3) The current accounting standard accounts for a bargain
purchase gain (negative goodwill) to be systematically
amortized within 20 years. Under the revised standard, the
acquirer recognizes a bargain purchase gain in profit or loss
on the acquisition date after reassessing whether it has cor-
rectly identified all of the assets acquired and all of the lia-
bilities assumed with a review of such procedures used.
This standard is applicable to business combinations under-
taken on or after April 1, 2010 with early adoption permitted for
fiscal years beginning on or after April 1, 2009.
Unification of Accounting Policies Applied to Foreign
Associated Companies for the Equity Method—The current
accounting standard requires to unify accounting policies within
the consolidation group. However, the current guidance allows to
apply the equity method for the financial statements of its foreign
associated company which have been prepared in accordance with
generally accepted accounting principles in their respective juris-
dictions without unification of accounting policies.
On December 26, 2008, the ASBJ issued ASBJ Statement
No.16 (Revised 2008), “Revised Accounting Standard for Equity
Method of Accounting for Investments”. The new standard
requires adjustments to be made to conform the associate’s
accounting policies for similar transactions and events under sim-
ilar circumstances to those of the parent company when the asso-
ciate’s financial statements are used in applying the equity method
unless it is impractible to determine adjustments. In addition,
financial statements prepared by foreign associated companies in
accordance with either International Financial Reporting Stan-
dards or the generally accepted accounting principles in the
United States tentatively may be used in applying the equity
method if the following items are adjusted so that net income is
accounted for in accordance with Japanese GAAP unless they are
not material:
1) amortization of goodwill; 2) scheduled amortization of
actuarial gain or loss of pensions that has been directly recorded
in the equity; 3) expensing capitalized development costs of
R&D; 4) cancellation of the fair value model of accounting for
property, plant, and equipment and investment properties and
incorporation of the cost model of accounting; 5) recording the
prior years’ effects of changes in accounting policies in the income
statement where retrospective adjustments to the financial state-
ments have been incorporated; and 6) exclusion of minority inter-
ests from net income, if contained.
This standard is applicable to equity method of accounting for
investments effective on or after April 1, 2010 with early adoption
permitted for fiscal years beginning on or after April 1, 2009.
Asset Retirement Obligations—On March 31, 2008, the
ASBJ published a new accounting standard for asset retirement
obligations, ASBJ Statement No.18 “Accounting Standard for
Asset Retirement Obligations” and ASBJ Guidance No.21 “Guid-
ance on Accounting Standard for Asset Retirement Obligations”.
Under this accounting standard, an asset retirement obligation is
defined as a legal obligation imposed either by law or contract that
results from the acquisition, construction, development and the
normal operation of a tangible fixed asset and is associated with
the retirement of such tangible fixed asset.
The asset retirement obligation is recognized as the sum of the
discounted cash flows required for the future asset retirement and is
recorded in the period in which the obligation is incurred if a rea-
sonable estimate can be made. If a reasonable estimate of the asset
retirement obligation cannot be made in the period the asset retire-
ment obligation is incurred, the liability should be recognized when
a reasonable estimate of asset retirement obligation can be made.
Upon initial recognition of a liability for an asset retirement obliga-
tion, an asset retirement cost is capitalized by increasing the carry-
ing amount of the related fixed asset by the amount of the liability.
The asset retirement cost is subsequently allocated to expense
through depreciation over the remaining useful life of the asset.
Over time, the liability is accreted to its present value each period.
Any subsequent revisions to the timing or the amount of the origi-
nal estimate of undiscounted cash flows are reflected as an increase
or a decrease in the carrying amount of the liability and the capital-
ized amount of the related asset retirement cost.
This standard is effective for fiscal years beginning on or after
April 1, 2010 with early adoption permitted for fiscal years begin-
ning on or before March 31, 2010.