Olympus 2008 Annual Report Download - page 44

42 OLYMPUS 2008
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
disclosure 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 was 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 was not material.
(e) Accounting Standards for Presentation of Net Assets in the Balance Sheet
In the year ended March 31, 2007, the Company has adopted new accounting standards, “Accounting Standard for Presentation of Net
Assets in the Balance Sheet” (Statement No. 5 issued by the Accounting Standards Board of Japan on December 9, 2005), and the imple-
mentation guidance for the accounting standard for presentation of net assets in the balance sheet (the Financial Accounting Standard
Implementation Guidance No. 8 issued by the Accounting Standards Board of Japan on December 9, 2005).
As of March 31, 2007, the consolidated balance sheets were prepared according to the new accounting standards comprising three
sections: assets, liabilities and net assets. The consolidated balance sheet as of March 31, 2006 prepared pursuant to the previous pre-
sentation rules comprises assets, liabilities, minority interests and shareholders’ equity sections. Under the new accounting standards,
the following items were presented differently at March 31, 2007 compared to March 31, 2006. The net assets section includes net unreal-
ized losses on hedging derivatives, net of taxes. Under the previous presentation rules, net unrealized losses on hedging derivatives, net
of taxes, were included in the assets or liabilities sections without considering the related income tax effects. Minority interests were
included in the net assets section at March 31, 2007. Under the previous presentation rules, companies were required to present minor-
ity interests between the non-current liabilities and the shareholders’ equity sections. The adoption of the new accounting standard had
no impacts on the consolidated statement of operations for the year ended March 31, 2007. Also, if the new accounting standards had not
been adopted at March 31, 2007, shareholders’ equity amounting to ¥334,394 million would have been presented.
(f) Accounting Standards for Statement of Changes in Net Assets
In the year ended March 31, 2007, the Company has adopted the new accounting standard, “Accounting Standard for Statement of Changes
in Net Assets” (Statement No. 6 issued by the Accounting Standards Board of Japan on December 27, 2005), and the implementation guid-
ance for the accounting standard for statement of changes in net assets (the Financial Accounting Standard Implementation Guidance No.
9 issued by the Accounting Standards Board of Japan on December 27, 2005).
The Company prepared the accompanying consolidated statement of changes in net assets for the year ended March 31, 2007 in accor-
dance with the new accounting standards. The accompanying consolidated statement of shareholders’ equity for the year ended March 31,
2006, which was voluntarily prepared for inclusion in the consolidated financial statements, has not been adapted to the new presentation
rules of 2007.
(g) Accounting Standards for Business Combination and Business Separation
In the year ended March 31, 2007, the Company has adopted “Accounting Standards for Business Combinations” (Business Accounting
Council, October 31, 2003) and “Accounting Standards for Business Separation” (Corporate Accounting Standard No. 7 regarding “the busi-
ness separation” issued on December 27, 2005) and “Implementation Guidance for Accounting Standards for Business Combinations and
separation” (Accounting Standards Board of Japan, Financial Accounting Standards Implementation Guidance No. 10, December 9, 2005).