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OLYMPUS 2006 41
9. NOTES AND ACCOUNTS PAYABLE
Notes and accounts payable as of March 31, 2006 and 2005, consisted of the following:
Thousands of
Millions of yen U.S. dollars
2006 2005 2006
Unconsolidated subsidiaries and affiliates .................................................................. ¥ 9 ¥ 370 $78
Trade .................................................................................................................. 85,732 95,033 754,496
Total .................................................................................................................. ¥85,741 ¥95,403 $745,574
10. SEVERANCE AND RETIREMENT ALLOWANCE
The Company and its consolidated subsidiaries adopted 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 liabilities for severance and retirements benefits included in the liability section of the consolidated balance sheet as of March 31,
2006 and 2005, consist of the following:
Thousands of
Millions of yen U.S. dollars
2006 2005 2006
Projected benefit obligation ...................................................................................... ¥ 119,322 ¥ 89,400 $ 1,037,583
Unrecognized prior service costs ............................................................................... 2,935 364 25,522
Unrecognized actuarial difference ............................................................................. (5,661) (13,448) (49,226)
Fair value of pension assets ...................................................................................... (115,764) (72,223) (1,006,643)
Prepaid pension expenses ........................................................................................ 7,695 4,803 66,912
Allowance for employees’ severance and retirement benefits .......................................... 8,527 8,896 74,148
Severance and retirement allowance for directors......................................................... ¥ 780 ¥ 995 $ 6,782
Total severance and retirement allowance ................................................................... ¥ 9,307 ¥ 9,891 $ 80,930
Note: Special retirement allowance amounting to ¥2,400 million that will be paid after fiscal 2006 was recorded in Accrued expenses on the consolidated balance sheet
as of March 31, 2005.
Included in the consolidated statements of operations for the years ended March 31, 2006 and 2005, are employees’ severance and
retirement benefit expenses comprising the following:
Thousands of
Millions of yen U.S. dollars
2006 2005 2006
Service costs—benefits earned during the year............................................................. ¥ 5,686 ¥ 4,679 $ 49,443
Interest cost on projected benefit obligation................................................................. 3,138 1,551 27,287
Expected return on plan assets .................................................................................. (4,681) (2,703) (40,704)
Amortization of actuarial difference ........................................................................... 6,341 5,828 55,139
Amortization of prior service costs............................................................................. (950) (344) (8,261)
Amortization of net transition obligation ..................................................................... —1,161 —
Severance and pension benefit expense...................................................................... ¥ 9,534 ¥10,172 $ 82,904
Note: Special retirement allowance amounting to ¥2,400 million that will be paid after fiscal 2006 was recorded in Provision for losses on business restructuring in the
consolidated statement of operations for the year ended March 31, 2005.
The discount rates used by the Company are mainly 2.0% in fiscal 2006 and 2.0% in fiscal 2005. The rate of expected return on plan
assets used by the Company is mainly 4.0% in fiscal 2006 and 2005. The estimated amount of all retirement benefits to be paid at the future
retirement date is allocated equally to each service year using the estimated number of total service years. Prior service costs and net transi-
tion obligation are both recognized as expense (or income) in equal amounts over mainly five years, and actuarial gains (or losses) are rec-
ognized as income (or expense) in equal amounts over mainly five years.
olympus ar06 25-52 06.7.28 4:48 PM ページ 41