Olympus 2005 Annual Report Download - page 42

40 O LYMPUS 2 00 5
8. NO TES AND ACCO UNTS PAYABLE
Notes and accounts payable as of March 31, 2005 and 2004, consisted of the following:
Thousands of
Millions of yen U.S. dollars
2005 2004 2004
Unco nsolidated subsidiaries and affiliates .................................................................. ¥370 ¥75 $ 3 ,364
Trade .................................................................................................................. 95,033 77,012 863,936
Total .................................................................................................................. ¥95,403 ¥77,087 $867,300
9. SEVERANCE AND RETIREMENT ALLO WANCE
The Company and its consolidated subsidiaries adopt the accounting standard for employees’ severance and retirement benefits, under which
the liabilities and expenses for severance and retirement benefits are determined based on the amounts obtained by actuarial calculations.
The Company restructured the pension scheme entirely by transferring back the substitutional portion of the Employees’ Pension Insurance
Scheme and establishing the new Employees’ Pension Fund in fiscal 2004.
The liabilities for severance and retirements benefits included in the liability section of the consolidated balance sheets as o f March 31,
2005 and 200 4 , consist of the following:
Thousands of
Millions of yen U.S. dollars
2005 2004 2005
Projected benefit obligation...................................................................................... ¥ 89,400 ¥ 84,28 0 $ 812,727
Unrecognized prior service costs ............................................................................... 364 689 3,309
Unrecognized actuarial difference ............................................................................. (13,44 8) (18,010) (122,25 5)
Fair value of pension assets...................................................................................... (72,223) (67,844) (656,573)
Unrecognized net transition obligation ....................................................................... —(1 ,161) —
Prepaid pension expenses ........................................................................................ 4,803 8,692 43,665
Allowance for employees’ severance and retirement benefits .......................................... 8,896 6,646 80 ,873
Severance and retirement allo wance for directors......................................................... ¥ 995 ¥ 1,257 $ 9 ,045
Total severance and retirement allowance ................................................................... ¥ 9,891 ¥ 7,903 $ 8 9,918
No te: Special retirement allowance amounting to ¥2,40 0 million ($21,8 18 thousand) that will be paid after fiscal 2 006 was recorded in Accrued expenses on the
consolidated balance sheet as of M arch 31 , 2005.
Included in the consolidated statements of o perations for the year ended March 31,2005 and 2 0 04, are employees’ severance and retire-
ment benefit expenses co mprising the following:
Thousands of
Millions of yen U.S. dollars
2005 20 04 2005
Service costs—benefits earned during the year............................................................. ¥ 4,679 ¥ 3,264 $ 42,536
Interest cost on projected benefit o bligation................................................................. 1,5 5 1 2,07 8 14,100
Expected return on plan assets .................................................................................. (2,703) (2,478) (24,573 )
Amortization of actuarial difference ........................................................................... 5,828 6,206 52 ,982
Amortization of prior service costs............................................................................. (344) (967) (3,127)
Amortization of net transition obligation ..................................................................... 1,16 1 1,407 1 0,555
Severance and pension benefit expense ...................................................................... ¥10,172 ¥ 9,510 $ 92,473
No te: Special retirement allowance amounting to ¥2,40 0 million ($21,8 18 thousand) that will be paid after fiscal 2 006 was recorded in Provision for losses on business
restructuring in the consolidated statement of operations for the year ended M arch 31, 20 05.
The discount rate used by the Company is 2.0% in fiscal 2005 and 200 4 . The rates of expected return on plan assets used by the
Company are mainly 4.0% in fiscal 2 005 and 4.0% in fiscal 2 004. The estimated amount o f all retirement benefits to be paid at the future
retirement date is allocated equally to each service year using the estimated number o f to tal service years. Prior service co sts and net transi-
tion obligation are bo th recognized as expense (or income) in equal amounts o ver mainly five years, and actuarial gains (or losses) are rec-
ognized as income (or expense) in equal amounts o ver mainly five years. Pension assets for the substitutional portion maintained by the
Employees’ Pension Fund were transferred back on February 27, 2004 to the government’s scheme. As a result, the Company recorded gains
amounting to ¥8,584 millio n in fiscal 2004.