Nintendo 2016 Annual Report Download - page 32

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(2) Depreciation and amortization methods of significant depreciable and amortizable assets
(i) Property, plant and equipment (excluding leased assets):
The Company and its domestic consolidated subsidiaries apply the declining balance method, but certain
tools, furniture and fixtures are subject to depreciation based on their useful lives in line with their
commercial obsolescence. However, the straight-line method is applied for buildings, except for
accompanying facilities, acquired on April 1, 1998 or thereafter. Overseas consolidated subsidiaries apply
the straight-line method based on the estimated economic useful lives.
Useful lives of main assets are as follows:
Buildings and structures 3-60 years
(ii) Intangible assets (excluding leased assets):
Intangible assets are amortized using the straight-line method. Software for internal use is amortized over
the estimated internal useful life (principally five years).
(iii) Leased assets
Leased assets in finance lease transactions that do not transfer ownership
The straight-line method with no residual value is applied, regarding the lease term as useful life.
(3) Accounting for significant reserves
(i) Allowance for doubtful accounts
The Company and its domestic consolidated subsidiaries provide the allowance for doubtful accounts
based on the historical analysis of loss experience for general receivables and on individual evaluations of
uncollectible amounts for specific receivables including doubtful accounts. Overseas consolidated
subsidiaries provide the allowance for doubtful accounts based on the individual evaluation of uncollectible
amount for each of receivables.
(ii) Provision for bonuses
The Company and certain consolidated subsidiaries provide the reserve for the estimated amount of
bonuses to be paid to the employees.
(4) Accounting method for retirement benefit liability
(i) Periodic allocation method for estimated benefit obligation
Upon calculating the retirement benefit obligations, the estimated benefit obligation is attributed to periods
up until the end of the fiscal year ended March 31, 2016, on a benefit formula basis.
(ii) Amortization method for actuarial gains and losses and past service cost
Actuarial gains and losses and past service cost are processed collectively in the year in which they are
incurred.
(iii) Application of simple method at small enterprises, etc.
Some consolidated subsidiaries apply a simple method in which an estimated amount required to be paid
for voluntary retirement benefits at the end of the fiscal year is deemed as the retirement benefit obligations
in the calculations of net defined benefit liability and retirement benefit expenses.
Assets in the Company’s defined benefit corporate pension plan are recorded as “Net defined benefit asset”
under investments and other assets as the plan assets exceeded the retirement benefit obligations.
(5) Standards of translation into yen of significant assets or liabilities denominated in foreign currencies
All the monetary receivables and payables of the Company and its domestic consolidated subsidiaries
denominated in foreign currencies are translated into Japanese yen based on the spot rate of exchange in the
foreign exchange market on the respective account closing dates. The foreign exchange gains and losses from
translation are recognized in the accompanying consolidated statements of income. Assets or liabilities of
overseas consolidated subsidiaries, etc. are translated into yen based on the spot rate of exchange in the
foreign exchange market on the account closing date, while revenue and expenses are translated into yen
based on the average rate of exchange for the fiscal year. The differences resulting from such translations are
included in “Foreign currency translation adjustment” and “Non-controlling interests” under net assets.