Nintendo 2006 Annual Report Download - page 29

27 Nintendo Co., Ltd. and consolidated subsidiaries
H. Retirement and Severance Benefits and Pension Plan
The Company and certain consolidated subsidiaries are calculating the reserve for employee retirement and severance benefits
with actuarially projected amounts on the basis of the cost of retirement benefit and plan assets at the end of fiscal year.
Actuarial calculation difference are processed collectively, mainly in the accrued year.
In addition, because the Company’s plan assets exceeded the cost of retirement benefits during the current consolidated
accounting period, “Reserve for employee retirement and severance benefits” is booked as “Prepaid plan assets” in “Other
assets”.
From the year ended March 31, 2006, the Company adopted the partial amendment of the Japanese Accounting Standards
for Employee Retirement and Severance Benefits. The effect by this application for the year ended March 31, 2006 increased
“Income before income taxes and minority interests” by ¥2,677 million ($22,882 thousand).
At the Annual General Meeting of Shareholders held on June 29, 2005, the discontinuance of the directors and auditors
retirement allowance system was approved along with payment of a final allowance to directors and auditors who took office
until that time. Since the final allowances are to be paid at the time of retirement based on each director or auditor’s tenure as
of June 29, 2005, the amount is booked as part of “Non-current accounts payable”.
I. Research and Development and Computer Software
Expenses relating to research and development activities are charged to income as incurred.
Computer software for the internal use included in “Other assets” is amortized using the straight-line method over the
estimated useful lives.
J. Leases
All leases are accounted for as operating leases. Under the Japanese accounting standards for leases, finance leases that are
deemed to transfer ownership of the leased assets to the lessee are to be capitalized, while other finance leases are permitted
to be accounted for as operating lease transactions if certain “as if capitalized” information is disclosed in the notes to the
lessee’s financial statements.
K. Appropriations of Retained Earnings
Appropriations of retained earnings are reflected in the consolidated financial statements for the following year upon
shareholders’ approval.
L. Per Share Information
The computations of net income per share of common stock are based on the weighted average number of shares
outstanding excluding the number of treasury stock during each fiscal year. The average numbers of common stock used in the
computation for the years ended March 31, 2006 and 2005 were 128,822 thousand and 131,600 thousand, respectively.
Cash dividends per share represent the amounts applicable to the respective years including dividends to be paid after end of
the fiscal year.
The balance of “Cash and cash equivalents” includes loans on repurchase agreement secured by marketable securities with a
market value of ¥15,939 million ($136,232 thousand) as of March 31, 2006.
Note 3. Supplemental Information on Cash and Cash Equivalents