Nikon 2014 Annual Report Download - page 60

(e) Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation of
property, plant and equipment of the Company and its consolidated
domestic subsidiaries is principally computed by the declining-bal-
ance method, while the straight-line method is applied to buildings
(excluding facilities incidental to buildings), and foreign subsidiar-
ies apply the straight-line method, using rates based on the esti-
mated 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 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.
(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) Marketable 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 secu-
rities are reduced to net realizable value by a charge to income.
The Company records investments in limited liability investment
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 percentage and the most recent financial state-
ments 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 con-
solidated domestic subsidiaries have a defined-benefit corporate
pension plan and unfunded retirement benefit plans. Certain
domestic subsidiaries have a smaller enterprise retirement allow-
ance mutual aid system. Certain foreign subsidiaries also have
defined-benefit plans and defined-contribution pension plans.
Effective April 1, 2000, the Company and its domestic subsidiar-
ies adopted a new Accounting Standard for Retirement Benefits and
accounted for the liability for retirement benefits based on the pro-
jected benefit obligations and plan assets at the balance sheet date.
Prior service costs and actuarial gains or losses are being amortized
over 10 years.
In May 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
Benefits 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 were followed by partial amend-
ments from time to time through 2009.
(a) Under the revised accounting standard, actuarial gains and losses
and past service costs that are yet to be recognized in profit or
loss are recognized within equity (accumulated other comprehen-
sive income), after adjusting for tax effects, and any resulting def-
icit or surplus is recognized as a liability (liability for retirement
benefits) or asset (asset for retirement benefits).
(b) The revised accounting standard does not change how to recog-
nize actuarial gains and losses and past service costs in profit or
loss. Those amounts are recognized in profit or loss over a cer-
tain period no longer than the expected average remaining ser-
vice period of the employees. 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 are included
in other comprehensive income and actuarial gains and losses
and past service costs that were recognized in other comprehen-
sive income in prior periods and then recognized in profit or loss
in the current period shall be treated as reclassification
adjustments.
(c) The revised accounting standard also made certain amendments
relating to the method of attributing expected benefit to periods
and relating to the discount rate and expected future salary
increases.
This accounting standard and the guidance for (a) and (b) above
are effective for the end of annual periods beginning on or after
April 1, 2013, and for (c) above are effective for the beginning of
annual periods beginning on or after April 1, 2014, or for the begin-
ning of annual periods beginning on or after April 1, 2015, subject
to certain disclosure in March 2015, both 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 consolidated financial statements in prior
periods is required.
The Company applied the revised accounting standard and guid-
ance for retirement benefits for (a) and (b) above, effective March
31, 2014. As a result, liability for retirement benefits of ¥1,537
FINANCIAL INFORMATION
Notes to Consolidated Financial Statements
58 NIKON REPORT 2014