Nikon 2013 Annual Report Download - page 43

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NIKON CORPORATION ANNUAL REPORT 2013
FINANCIAL SECTION
market value at the balance sheet date, and the unrealized
gains or losses are deferred until maturity. Interest rate
swaps, which qualify for hedge accounting and meet specific
matching criteria, are not remeasured at market value, but the
differential paid or received under the swap agreements is
recognized and included in interest expense or income.
(q) Per Share Information
Basic net income per share is computed by dividing net income
available to common shareholders by the weighted-average
number of common shares outstanding for the period, retro-
actively 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 issu-
ance) 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
consolidated statement of income are dividends applicable to
the respective years including dividends to be paid after the
end of the year.
(r) Accounting Changes and Error Corrections
In December 2009, the ASBJ issued ASBJ Statement No. 24,
“Accounting Standard for Accounting Changes and Error
Corrections,” and ASBJ Guidance No. 24, “Guidance on
Accounting Standard for Accounting Changes and Error
Corrections.” Accounting treatments under this standard
and guidance are as follows:
(1) Changes in Accounting Policies:
When a new accounting policy is applied with revision of an
accounting standard, a new policy is applied retrospectively
unless the revised accounting standard includes specific
transitional provisions, in which case the entity shall com-
ply with the specific transitional provisions.
(2) Changes in Presentation
When the presentation of financial statements is changed,
prior-period financial statements are reclassified in
accordance with the new presentation.
(3) Changes in Accounting Estimates
A change in an accounting estimate is accounted for in the
period of the change if the change affects that period only,
and is accounted for prospectively if the change affects both
the period of the change and future periods.
(4) Corrections of Prior-Period Errors
When an error in prior-period financial statements is
discovered, those statements are restated.
(s) New Accounting Pronouncements
Accounting Standard for Retirement Benefits—On May 17,
2012, the ASBJ issued ASBJ Statement No. 26, “Accounting
Standard for Retirement Benefits” and ASBJ Guidance No. 25,
“Guidance on Accounting Standard for Retirement Benefits,”
which replaced the Accounting Standard for Retirement Ben-
efits that had been issued by the Business Accounting Council
in 1998 with an effective date of April 1, 2000, and the other
related practical guidance, and followed by partial amend-
ments from time to time through 2009.
Major changes are as follows:
(1) Treatment in the balance sheet
Under the current requirements, actuarial gains and losses
and past service costs that are yet to be recognized in profit
or loss are not recognized in the balance sheet, and the
difference between retirement benefit obligations and plan
assets (hereinafter, “deficit or surplus”), adjusted by such
unrecognized amounts, is recognized as a liability or asset.
Under the revised accounting standard, actuarial gains
and losses and past service costs that are yet to be recog-
nized in profit or loss shall be recognized within equity
(accumulated other comprehensive income), after adjusting
for tax effects, and any resulting deficit or surplus shall be
recognized as a liability (liability for retirement benefits)
or asset (asset for retirement benefits).
(2) Treatment in the statement of income and the statement of
comprehensive income
The revised accounting standard does not change how to
recognize actuarial gains and losses and past service costs
in profit or loss. Those amounts would be recognized in
profit or loss over a certain period no longer than the
expected average remaining working lives of the employ-
ees. However, actuarial gains and losses and past service
costs that arose in the current period and have not yet been
recognized in profit or loss shall be included in other com-
prehensive income and actuarial gains and losses and past
service costs that were recognized in other comprehensive
income in prior periods and then recognized in profit or loss
in the current period shall be treated as reclassification
adjustments.
This accounting standard and the guidance are effective for
the end of annual periods beginning on or after April 1, 2013,
with earlier application being permitted from the beginning of
annual periods beginning on or after April 1, 2013. However, no
retrospective application of this accounting standard to con-
solidated financial statements in prior periods is required.
The Company expects to apply the revised accounting stan-
dard from the end of the annual period beginning on April 1,
2013, and is in the process of measuring the effects of applying
the revised accounting standard in future applicable periods.