Olympus 2006 Annual Report Download - page 39

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OLYMPUS 2006 37
2. CHANGES IN ACCOUNTING POLICIES
(A) ACCOUNTING STANDARDS FOR THE IMPAIRMENT OF FIXED ASSETS
In the year ended March 31, 2006, the Company has adopted new accounting standards for the impairment of fixed assets in accordance
with “Accounting Standards for the Impairment of Fixed Assets” (“Opinion Concerning Establishment of Accounting Standards for the
Impairment of Fixed Assets,” Business Accounting Council, August 9, 2002) and “Implementation Guidance for Accounting Standards for the
Impairment of Fixed Assets,” (Accounting Standards Board of Japan, Financial Accounting Standard Implementation Guidance No. 6,
October 31, 2003). As a result of changes in standards, income before income taxes decreased ¥1,411 million ($12,270 thousand) com-
pared to the same period a year earlier.
Accumulated loss from impairment is deducted directly from the acquisition costs of the related assets in accordance with the revised dis-
closure requirements.
(B) CHANGE IN ACCOUNTING STANDARD FOR RETIREMENT BENEFITS IN THE UNITED KINGDOM ADOPTED BY THE
CONSOLIDATED SUBSIDIARY IN THE UK
In the year ended March 31, 2006, the consolidated subsidiary in the UK has adopted a new accounting standard for retirement benefits in
the United Kingdom.
The effect of this change was to decrease retained earnings by ¥4,183 million ($36,374 thousand) since the unrecognized net transition
obligation, amounting to ¥1,939 million ($16,861 thousand) and the unrecognized actuarial difference, amounting to ¥2,244 million
($19,513 thousand) were directly changed to retained earnings for the year ended March 31, 2006. The effect on net income of the adop-
tion of this new accounting standard is not material.
(C) ACCOUNTING STANDARDS FOR EMPLOYEE RETIREMENT AND SEVERANCE BENEFITS
By the partial amendment of “Accounting Standards for Employee Retirement and Severance Benefits” issued by Business Accounting Council
on June 16, 1998, unrecognized pension assets are allowed to be recognized as assets and profits.
In the year ended March 31, 2006, the Company adopted the partial amendment of “Corporate Accounting Standard No. 3 regarding
Employee Retirement and Severance Benefits” issued on March 16, 2005. Unrecognized pension assets are supposed to be recognized in
profit or loss as actuarial difference from the year ended March 31, 2007 onward.
3. MARKETABLE AND INVESTMENT SECURITIES
The following tables summarize acquisition costs, book values and fair value of securities with fair value as of March 31, 2006 and 2005:
Available-for-sale securities
Securities with book value (fair value) exceeding acquisition cost.
Millions of yen Thousands of U.S. dollars
2006 2005 2006
Acquisition Book Acquisition Book Acquisition Book
cost value Difference cost value Difference cost value Difference
Equity securities ................. ¥41,269 ¥ 65,778 ¥24,509 ¥17,660 ¥26,419 ¥8,759 $358,861 $571,983 $213,122
Bonds .............................. ——— 10 10 0 —— —
Others .............................. 36,078 37,371 1,293 97,208 98,532 1,324 313,722 324,965 11,243
Total .............................. ¥77,347 ¥103,149 ¥25,802 ¥114,878 ¥124,961 ¥10,083 $672,583 $896,948 $224,365
Securities with book value (fair value) under acquisition cost.
Millions of yen Thousands of U.S. dollars
2006 2005 2006
Acquisition Book Acquisition Book Acquisition Book
cost value Difference cost value Difference cost value Difference
Equity securities ................. ¥ 2,066 ¥ 1,962 ¥(104) ¥ 554 ¥ 512 ¥ (42) $ 17,965 $ 17,061 $ (904)
Bonds .............................. 1,200 1,200 —1,200 1,200 — 10,435 10,435 —
Others .............................. 60,000 59,279 (721) 3,171 2,743 (428) 521,739 515,469 (6,270)
Total .............................. ¥63,266 ¥62,441 ¥(825) ¥4,925 ¥4,455 ¥(470) $550,139 $542,965 $(7,174)
Note: The Company recognizes impairment loss when the fair market value of marketable and investment securities comes down to less than 50% of the acquisition
cost at the end of the period. In addition, the loss is also recognized when the fair market value declines more than 30% but less than 50%, unless the recovery
of the fair market value is reasonably expected under the market conditions, trends of earnings and other key measures.
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