Nintendo 2015 Annual Report Download - page 29

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- 27 -
(6) Amortization method of goodwill and period thereof
Goodwill is mainly amortized on a straight-line basis over five years. Immaterial goodwill is amortized in full
in the same fiscal year in which it is incurred.
(7) Scope of cash and cash equivalents in the consolidated statements of cash flow
“Cash and cash equivalents” include cash on hand, time deposit which can be withdrawn on demand and
short-term investments, with little risk of fluctuation in value and maturity of three months or less of the
acquisition date, which are promptly convertible to cash.
(8) Other important matters in preparing the consolidated financial statements
Accounting for consumption taxes
Consumption taxes and local consumption taxes are accounted for by the tax exclusion method.
Changes in accounting policies
Application of accounting standard for retirement benefits, etc.
Effective beginning the fiscal year ended March 31, 2015, Nintendo has adopted Article 35 of the “Accounting
Standard for Retirement Benefits” (ASBJ Statement No.26 of May 17, 2012; hereafter the “Accounting Standard”)
and Article 67 of the “Guidance on the Accounting Standard for Retirement Benefits,” (ASBJ Guidance No.25 of
March 26, 2015) and has changed the calculation methods for retirement benefit obligations and service costs. The
method of attributing estimated retirement benefits to periods has been changed from the straight line basis to the
benefit formula basis, and the method of determining the discount rate has been revised from a method based on an
approximation of the employees’ average remaining service period to a method of using a single weighted average
discount rate reflecting the estimated payment period and the amount for each estimated payment period of the
retirement benefit.
With respect to application of the Accounting Standard, in accordance with transitional accounting treatments as
stated in Article 37 of the Accounting Standard, the effect of the changes in calculation methods for retirement
benefit obligations and service costs has been reflected in retained earnings at the beginning of the fiscal year ended
March 31, 2015.
As a result, net defined benefit liability and net defined asset have increased by ¥484 million (U.S.$4 million) and
¥3,078 million (U.S.$25 million) respectively at the beginning of the fiscal year ended March 31, 2015, while
retained earnings and deferred tax liabilities regarding them have increased by ¥1,673 million (U.S.$13 million) and
¥920 million (U.S.$7 million) respectively at the same point in time. There is minimal impact on operating income,
ordinary income or income before income taxes and minority interests in the fiscal year ended March 31, 2015.