Omron 2007 Annual Report Download - page 62

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3. Inventories
New Accounting Standards
In June 2006, the FASB ratified the Emerging Issue Task Force
(“EITF”) consensus on EITF Issue 06-2, “Accounting for
Sabbatical Leave and Other Similar Benefits Pursuant to FASB
Statement No. 43.” EITF Issue 06-2 provides guidance for an
accrual of compensated absences that require a minimum serv-
ice period but have no increase in the benefit even with addi-
tional years of service. EITF Issue 06-2 is effective for fiscal years
beginning after December 15, 2006. The adoption of EITF Issue
06-2 will not have a material impact on the Companies’ consoli-
dated financial statements.
In June 2006, the FASB issued FASB Interpretation (“FIN”)
No. 48, “Accounting for Uncertainty in Income Taxes, an inter-
pretation of FASB Statement No.109”. FIN No. 48 clarifies the
accounting for uncertainty in income taxes by prescribing the
recognition threshold a tax position is required to meet before
being recognized in the financial statements. It also provides
guidance on derecognition, classification, interest and penalties,
accounting in interim periods, disclosure, and transition. FIN No.
48 is effective for fiscal years beginning after December 15,
2006. The Companies do not expect the adoption of FIN No. 48
will have a material impact on the Companies’ consolidated finan-
cial statements.
In September 2006, the FASB issued SFAS No. 157, “Fair
Value Measurements.” SFAS No. 157 defines fair value, estab-
lishes a framework for measuring fair value, and expands dis-
closures about fair value measurements. SFAS No. 157 is effec-
tive for fiscal years beginning after November 15, 2007. The
adoption of SFAS No. 157 will not have a material impact on the
Companies’ consolidated financial statements.
In September 2006, the FASB issued SFAS No. 158,
“Employers’ Accounting for Defined Benefit Pension and Other
Postretirement Plans.” SFAS No. 158 requires plan sponsors of
defined benefit pension and other postretirement benefit plans
(collectively, “postretirement benefit plans”) to recognize the
funded status of their postretirement benefit plans in the con-
solidated balance sheet, measure the fair value of plan assets
and benefit obligations as of the date of the fiscal year-end con-
solidated balance sheet, and provide additional disclosures. On
March 31, 2007, the Company adopted the recognition and dis-
closure provisions of SFAS No. 158. The effect of adopting SFAS
No. 158 on the Company’s financial condition at March 31, 2007
has been included in the accompanying consolidated financial
statements. SFAS No. 158’s provisions regarding the change in
the measurement date of postretirement benefit plans did not
have a material impact on the Company’s consolidated results of
operations and financial condition as the Company already uses
a measurement date of March 31 for the majority of its plans.
In February 2007, the FASB issued SFAS No. 159, “The Fair
Value Option for Financial Assets and Financial Liabilities-Including
an amendment of FASB Statement No. 115.” SFAS No. 159
provides companies with an option to report selected financial
assets and liabilities at fair value. Unrealized gains and losses
on items for which the fair value option has been elected will
be recognized in earnings. SFAS No. 159 is effective for fiscal
years beginning after November 15, 2007. The adoption of SFAS
No. 159 will not have a material impact on the Companies’ con-
solidated financial statements.
Inventories at March 31 consisted of:
2006
2007 2007
Finished products
Work-in-process
Materials and supplies
Total
Thousands of
U.S. dollars
Millions of yen
¥40,613
14,286
20,059
¥74,958
¥53,331
14,043
26,735
¥94,109
$451,958
119,008
226,568
$797,534
2. Translation into United States Dollars
The consolidated financial statements are stated in Japanese
yen, the currency of the country in which the Company is incor-
porated and operates. The translation of Japanese yen amounts
into U.S. dollar amounts is included solely for convenience of
the readers outside of Japan and has been made at the rate of
¥118 to $1, the approximate rate of exchange at March 31, 2007.
Such translation should not be construed as representations that
the Japanese yen amounts could be converted into U.S. dollars
at the above or any other rate.