Nikon 2015 Annual Report Download - page 57

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NIKON REPORT 2015
Financial and Corporate Data
(p) Derivatives and Hedging Activities
The Group enters into derivative nancial instruments (“deriva-
tives”), including foreign exchange forward contracts, currency
options, foreign currency swaps, and interest rate swaps to hedge
foreign exchange risk and interest rate exposures. The Group does
not use derivatives for trading or speculative purposes.
Derivatives and foreign currency transactions are classied and
accounted for as follows: (i) all derivatives are recognized princi-
pally as either assets or liabilities and remeasured at fair value, and
gains or losses on derivative transactions are recognized in the
statement of income and (ii) for derivatives used for hedging pur-
poses, if derivatives qualify for hedge accounting because of high
correlation and effectiveness between the hedging instruments and
the hedged items, gains or losses on derivatives are deferred until
maturity of the hedged transactions.
The foreign exchange forward contracts and currency option con-
tracts employed to hedge foreign exchange exposures for export
sales and import purchases are measured at fair value and the
related unrealized gains or losses are recognized in income. Forward
contracts entered into for forecast transactions are also measured at
fair value, but the unrealized gains or losses on qualifying hedges
are deferred until the underlying transactions have been completed.
The foreign currency swaps used to hedge the foreign currency uc-
tuations of long-term debt denominated in foreign currencies are
measured at fair value and the unrealized gains or losses are
included in the carrying amounts of the debt. The interest rate
swaps which qualify for hedge accounting are measured at market
value at the balance sheet date, and the unrealized gains or losses
are deferred until maturity.
(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, retroactively adjusted
for stock splits.
Diluted net income per share reects 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 consoli-
dated statement of income are dividends applicable to the respec-
tive years including dividends to be paid after the end of the year.
(r) Changes in Presentation
Consolidated balance sheet
For the year ended March 31, 2015, deferred tax assets included in
“other” under noncurrent assets in the previous year, were individually
presented in the balance sheet as the materiality has increased. The
amount of deferred tax assets in the previous year was ¥7,647 million.
(s) 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:
(i) Changes in accounting policies:
When a new accounting policy is applied following revision of
an accounting standard, the new policy is applied retrospec-
tively, unless the revised accounting standard includes specic
transitional provisions, in which case the entity shall comply
with the specic transitional provisions.
(ii) Changes in presentation
When the presentation of nancial statements is changed, prior-
period nancial statements are reclassied in accordance with
the new presentation.
(iii) 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.
(iv) Corrections of prior-period errors
When an error in prior-period nancial statements is discovered,
those statements are restated.