Nikon 2013 Annual Report Download - page 41

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NIKON CORPORATION ANNUAL REPORT 2013
FINANCIAL SECTION
(c) Cash Equivalents
Cash equivalents are short-term investments that are readily
convertible into cash and that are exposed to insignificant risk
of changes in value.
Cash equivalents include time deposits, certificates of
deposit, commercial paper, and mutual funds invested in
bonds that represent short-term investments, all of which
mature or become due within three months of the date of
acquisition.
(d) Inventories
Inventories of the Company and its domestic subsidiaries are
stated at the lower of cost, determined principally by the aver-
age method, or net selling value. Inventories of foreign subsid-
iaries are stated at the lower of cost or market as determined
principally using the average method.
(e) Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation
of property, plant and equipment of the Company and its con-
solidated domestic subsidiaries is principally computed by the
declining-balance method, while the straight-line method is
applied to buildings (excluding facilities incidental to buildings),
and foreign subsidiaries apply the straight-line method, using
rates based on the estimated useful lives of the assets. The
range of useful lives is principally from 30 to 40 years for
buildings and from 5 to 10 years for machinery. The useful
lives for lease assets are the terms of the respective leases.
(f) Long-lived Assets
The Group reviews 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 recover-
able 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.
(g) Investment Securities
Investment securities are classified and accounted for,
depending on management’s intent, as follows:
i) held-to-maturity debt securities, which are expected to be
held to maturity with the positive intent and ability to hold to
maturity are reported at amortized cost; and
ii) available-for-sale securities, which are not classified as
held-to-maturity securities, are reported at fair value, with
unrealized gains and losses, net of applicable taxes,
reported in a separate component of equity.
Nonmarketable available-for-sale securities are stated
at cost determined by the moving-average method.
For other-than-temporary declines in fair value, investment
securities are reduced to net realizable value by a charge to
income.
The Company records investments in limited liability invest-
ment partnerships (deemed “investment securities” under
the provisions set forth in Article 2, Item 2 of the Financial
Instruments and Exchange Law) using the amount of interest
in such partnerships calculated based on ownership percent-
age and the most recent financial statements on the report
date stipulated in the partnership agreement.
(h) Retirement and Pension Plans
The Company has a defined-benefit corporate pension plan
(cash balance plan) and a defined-contribution pension plan,
and its consolidated domestic subsidiaries have a defined-
benefit corporate pension plan and unfunded retirement
benefit plans. Certain domestic subsidiaries have smaller
enterprise retirement allowance mutual aid system. Certain
foreign subsidiaries also have a defined-benefit plan and a
defined-contribution pension plan.
The Group accounts for the liability for retirement benefits
based on the projected benefit obligations and plan assets at
the balance sheet date.
In the fiscal year ended March 31, 2012, the Company con-
tributed ¥14,600 million in cash to a retirement benefit trust.
The contribution was made to improve the funding of the ben-
efit plan.
(i) Retirement Allowances for Directors
and Audit & Supervisory Board Members
Retirement allowances for directors and audit & supervisory
board members were recorded to state the liability at the
amount that would be required if all directors and audit &
supervisory board members retired at each balance sheet
date. However, the Company decided to abolish the Retirement
Benefits Plan for Directors and Audit & Supervisory Board
Members at the close of the Annual General Shareholders’
Meeting held on June 29, 2011 and make a final payment of
retirement benefits corresponding to the service period of
each of its directors and audit & supervisory board members,
in accordance with the resolution at the Annual General
Shareholders’ Meeting. The unpaid amount was recorded in
“Other long-term liabilities” in 2012 and 2013.