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38 OLYMPUS 2007
(l) AMOUNTS PER SHARE
Basic earnings per share (EPS) is computed by dividing income available to common shareholders by the weighted-average number of com-
mon shares outstanding for each fiscal year. Diluted EPS is similar to basic EPS except that the weighted-average of common shares outstand-
ing is increased by the number of additional common shares that would have been outstanding if the potentially dilutive common shares had
been issued. For the years ended for March 31, 2007, 2006 and 2005, there were no dilutive common shares which have resulted in a dilu-
tive effect. Accordingly, the Company’s basic and dilutive earnings per share computations are the same for the periods presented.
Cash dividends per common share are the amounts applicable to the respective periods.
(m) TRANSLATION OF FOREIGN CURRENCY FINANCIAL STATEMENTS
In accordance with the accounting standards for foreign currency translations, assets and liabilities denominated in foreign functional curren-
cies are translated at exchange rates at the balance sheet date. Shareholders’ equity accounts are translated at historical exchange rates.
Revenues and expenses denominated in foreign functional currencies are translated at average exchange rates for each corresponding fiscal
year. Differences arising from translation are presented as “Foreign currency translation adjustments” in a separate component of net assets as
of March 31, 2007, and of shareholders’ equity as of March 31, 2006.
2. CHANGES IN ACCOUNTING POLICIES
(a) ACCOUNTING STANDARDS FOR THE IMPAIRMENT OF FIXED ASSETS
In the year ended March 31, 2006, the Company had 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 compared 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 STANDARDS FOR RETIREMENT BENEFITS IN THE UNITED KINGDOM ADOPTED BY CONSOLIDATED
SUBSIDIARY IN THE UNITED KINGDOM
In the year ended March 31, 2006, consolidated subsidiary in the UK had adopted a new accounting standard for retirement benefits there.
The effect of this change was to decrease retained earnings by ¥4,183 million since the unrecognized net transition obligation, amounting
to ¥1,939 million and the unrecognized actuarial difference, amounting to ¥2,244 million were directly charged to retained earnings for the
year ended March 31, 2006. The effect on net income of the adoption 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.
(d) ACCOUNTING STANDARDS FOR BONUSES TO DIRECTORS AND CORPORATE AUDITORS
In the year ended March 31, 2007, the Company has adopted new accounting standards for the bonuses to directors and corporate auditors
in accordance with “Accounting Standards for the Bonuses to Directors” (Corporate Accounting Standard No. 4 regarding the bonuses to
directors and corporate auditors issued on November 29, 2005).
The effect on net income of the adoption of this new accounting standard is not material.