Omron 2004 Annual Report Download - page 47

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Allowance for Doubtful Receivables
An allowance for doubtful receivables is established in amounts considered to be appropriate based primarily upon the Companies’
past credit loss experience and an evaluation of potential losses in the receivables outstanding.
Short-Term Investments and Investment Securities
The Companies classify all of their marketable debt and equity securities as available-for-sale. Available-for-sale securities are carried
at market value with the corresponding recognition of net unrealized holding gains and losses as a separate component of accumulat-
ed other comprehensive income, net of related taxes, until recognized. If necessary, individual securities classified as available-for-sale
are reduced to fair value by a charge to income in the period in which the decline is deemed to be other than temporary. Other invest-
ments are stated at the lower of cost or estimated net realizable value.The cost of securities sold is determined on the average cost
basis.
Inventories
Inventories are stated at the lower of cost, determined by the first-in, first-out method, or market.
Property, Plant and Equipment
Property, plant and equipment is stated at cost. Depreciation of property, plant and equipment has been computed principally on a
declining balance method based upon the estimated useful lives of the assets. The estimated useful lives primarily range from 3 to 50
years for buildings and from 2 to 15 years for machinery and equipment.
Goodwill and Other Intangible Assets
The Company accounts for its goodwill and other intangible assets in accordance with SFAS No.142, "Goodwill and Other Intangible
Assets,” which requires that goodwill no longer be amortized, but instead tested for impairment at least annually. SFAS No.142 also
requires recognized intangible assets be amortized over their respective estimated useful lives and reviewed for impairment. Any rec-
ognized intangible asset determined to have an indefinite useful life is not to be amortized, but instead tested for impairment until its life
is determined to no longer be indefinite.
Long-Lived Assets
Long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an
asset may not be recoverable. Recoverability of assets to be held and used is measured by a comparison of the carrying amount of an
asset to undiscounted cash flows expected to be generated by the asset. If such assets are considered to be impaired, the impair-
ment to be recognized is measured by the amount by which the carrying amount of the assets exceed the fair value. Assets to be dis-
posed of other than by sale are considered held and used until disposed of. Assets to be disposed of by sale are reported at the lower
of the carrying amount or fair value less costs to sell.
Advertising Costs
Advertising costs are charged to earnings as incurred. Advertising expense was ¥8,391 million ($79,160 thousand), ¥7,196 million and
¥7,931 million for the years ended March 31, 2004, 2003 and 2002, respectively.
Shipping and Handling Charges
Shipping and handling charges were ¥8,061 million ($76,047 thousand), ¥7,300 million and ¥7,342 million for the years ended March
31, 2004, 2003 and 2002, respectively, and are included in selling, general and administrative expenses in the consolidated state-
ments of operations.
Termination and Retirement Benefits
Termination and retirement benefits are accounted for in accordance with SFAS No.87, "Employers’ Accounting for Pensions” and are
disclosed in accordance with SFAS No.132 (revised 2003), “Employers’ Disclosures about Pensions and Other Postretirement
Benefits.” The provision for termination and retirement benefits includes amounts for directors and corporate auditors of the Company.