Nikon 2015 Annual Report Download - page 54

52 NIKON REPORT 2015
Under the current accounting standard, any difference between
the fair value of the consideration received or paid and the
amount by which the minority interest is adjusted is accounted
for as an adjustment of goodwill or as prot or loss in the con-
solidated statement of income. Under the revised accounting
standard, such difference shall be accounted for as capital sur-
plus as long as the parent retains control over its subsidiary.
(ii) Presentation of the consolidated balance sheet—In the con-
solidated balance sheet, “minority interest” under the current
accounting standard will be changed to “noncontrolling inter-
est” under the revised accounting standard.
(iii) Presentation of the consolidated statement of income—In the
consolidated statement of income, “income before minority
interest” under the current accounting standard will be
changed to “net income” under the revised accounting stan-
dard, and “net income” under the current accounting stan-
dard will be changed to “net income attributable to owners of
the parent” under the revised accounting standard.
(iv) Provisional accounting treatments for a business combina-
tion—If the initial accounting for a business combination is
incomplete by the end of the reporting period in which the
business combination occurs, an acquirer shall report in its
nancial statements provisional amounts for the items for
which the accounting is incomplete. Under the current
accounting standard guidance, the impact of adjustments to
provisional amounts recorded in a business combination on
prot or loss is recognized as prot or loss in the year in
which the measurement is completed. Under the revised
accounting standard guidance, during the measurement
period, which shall not exceed one year from the acquisition,
the acquirer shall retrospectively adjust the provisional
amounts recognized at the acquisition date to reect new
information obtained about facts and circumstances that
existed as of the acquisition date and that would have
affected the measurement of the amounts recognized as of
that date. Such adjustments shall be recognized as if the
accounting for the business combination had been completed
at the acquisition date.
(v) Acquisition-related costs—Acquisition-related costs are costs,
such as advisory fees or professional fees, which an acquirer
incurs to effect a business combination. Under the current
accounting standard, the acquirer accounts for acquisition-
related costs by including them in the acquisition costs of the
investment. Under the revised accounting standard, acquisi-
tion-related costs shall be accounted for as expenses in the
periods in which the costs are incurred.
The above accounting standards and guidance for (i), (ii), (iii),
(iv), and (v) are effective for the beginning of annual periods begin-
ning on or after April 1, 2015. Earlier application is permitted from
the beginning of annual periods beginning on or after April 1,
2014, except for (ii) and (iii). In the case of earlier application, all
accounting standards and guidance above, except for (ii) and (iii),
shall be applied simultaneously.
The Company early applied the revised accounting standards and
guidance of (i) and (v) above, effective April 1, 2014, and (iv) for a
business combination occurring after April 1, 2014. Although these
revised accounting standards and guidance were applicable from
the beginning of the year, there was no impact on the consolidated
balance sheet and consolidated statement of income for the year
ended March 31, 2015.
In addition, the method of presentation was changed in the con-
solidated statement of cash ows. The cash ows for purchases or
sales of ownership interests in its subsidiary without a change in
consolidation scope are presented under nancing activities, and
cash ows for acquisition-related costs are presented under operat-
ing activities. However, there was no impact on the consolidated
statement of cash ows for the year ended March 31, 2015.
(d) Cash Equivalents
Cash equivalents are short-term investments that are readily con-
vertible into cash and that are exposed to insignicant risk of
changes in value.
Cash equivalents include time deposits, certicates of deposit,
commercial paper, and mutual funds invested in bonds that repre-
sent short-term investments, all of which mature or become due
within three months of the date of acquisition.
(e) Inventories
Inventories of the Company and its domestic subsidiaries are stated
at the lower of cost, determined principally by the average method,
or net selling value. Inventories of foreign subsidiaries are stated at
the lower of cost or market as determined principally using the aver-
age method.
(f) Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation of
property, plant and equipment of the Company and its consolidated
subsidiaries is principally computed by the straight-line method.
The major ranges of useful lives are from 30 to 40 years for build-
ings and from 5 to 10 years for machinery. The useful lives for lease
assets are the terms of the respective leases.
Prior to April 1, 2014, the Company and its domestic consolidated
subsidiaries had adopted the declining-line method for depreciation
of property, plant and equipment except for buildings. Effective April
1, 2014, however, the Company and its domestic consolidated sub-
sidiaries changed their method of depreciation for depreciation of
property, plant and equipment to straight-line method.
The change was based on a series of reviews over the deprecia-
tion method for property, plant and equipment within the Group, in
coordination with cost reduction in design and manufacturing pro-
cesses and a fundamental review of production structure, from the
perspective of strengthening the maturing core businesses under
the Medium-Term Management Plan “Next 100 – Transform to Grow”
for the period up to the year ending March 31, 2017. As a result of
Notes to Consolidated Financial Statements