Omron 2009 Annual Report Download - page 70

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Notes to Consolidated Financial Statements
Omron Corporation and Subsidiaries
ative contract is entered into, the Companies designate
the derivative as a hedge of a forecasted transaction or the
variability of cash flows to be received or paid related to a
recognized asset or liability (“cash flow” hedge or “foreign
currency” hedge). The Companies formally document all
relationships between hedging instruments and hedged
items, as well as its risk management objective and strat-
egy for undertaking various hedge transactions. This
process includes linking all derivatives that are designated
as cash flow or foreign currency hedges to specific assets
and liabilities on the consolidated balance sheet or to spe-
cific firm commitments or forecasted transactions. Based
on the Companies’ policy, all foreign exchange forward
contracts, foreign currency swaps and interest rate swaps
entered into must be highly effective in offsetting changes
in cash flows of hedged items.
Changes in fair value of a derivative that is highly effec-
tive and that is designated and qualifies as a cash flow
or foreign currency hedge are recorded in other compre-
hensive income (loss), until earnings are affected by the
variability in cash flows of the designated hedged item.
Cash Dividends
Cash dividends are reflected in the consolidated financial
statements at proposed amounts in the year to which
they are applicable, even though payment is not approved
by shareholders until the annual general meeting of share-
holders held early in the following fiscal year. Resulting
dividends payable are included in Other current liabilities in
the consolidated balance sheets.
Revenue Recognition
The Companies recognize revenue when persuasive evi-
dence of an arrangement exists, delivery has occurred
and title and risk of loss has transferred, the sales price is
fixed or determinable, and collectibility is probable. These
criteria are met when products are received by customers
or services are performed.
Stock-Based Compensation
The Companies applied revised SFAS No.123, “Share
Based Payment,” and recognized a stock-based com-
pensation cost measured by the fair value method.
New Accounting Standards
In December 2007, the FASB issued SFAS No.141
(revised 2007), “Business Combinations” (“SFAS 141R”).
SFAS 141R establishes principles and requirements for
how an acquirer recognizes and measures in its financial
statements the identifiable assets acquired, the liabilities
assumed, any noncontrolling interest in the acquiree and
the goodwill acquired. SFAS 141R also establishes dis-
closure requirements to enable the evaluation of the
nature and financial effects of the business combination.
SFAS 141R is effective for fiscal years beginning on or
after December 15, 2008. The adoption of SFAS 141R
will not have a material impact on the Companies’ con-
solidated financial statements.
In December 2007, the FASB issued SFAS No.160,
“Noncontrolling Interests in Consolidated Financial
Statement, an amendment of ARB No.51” (“SFAS 160”).
SFAS 160 establishes accounting and reporting standards
for ownership interests in subsidiaries held by parties other
than the parent, the amount of consolidated net income
attributable to the parent and to the noncontrolling interest,
changes in a parent’s ownership interest, and the valuation
of retained noncontrolling equity investments then a sub-
sidiary is deconsolidated. SFAS 160 also establishes dis-
closure requirements that clearly identify and distinguish
between the interests of the parent and the interests of the
noncontrolling owners. SFAS 160 is effective for fiscal
years beginning on or after December 15, 2008. The adop-
tion of SFAS 160 will not have a material impact on the
Companies’ consolidated financial statements.
In March 2008, the FASB issued SFAS No.161,
“Disclosures about Derivative Instruments and Hedging
Activities, an amendment of FASB Statement No.133”
(“SFAS 161”). SFAS 161 amends and expands the cur-
rent disclosures required by SFAS No.133, “Accounting for
Derivative Instruments and Hedging Activities” (“SFAS
133”). SFAS 161 requires to provide greater transparency
about how and why an company uses derivative instru-
ments, how derivative instruments and related hedged
items are accounted for under SFAS 133 and its inter-
pretations, and how derivative instruments and related
hedged items affect a company’s financial position, results
of operations and cash flows. SFAS 161 does not change
the existing standards relative to recognition and meas-
urement of derivative instruments and hedging activities.
SFAS 161 is effective for fiscal years and interim periods
beginning after November 15, 2008. The adoption of SFAS
161 will not have a material impact on the Companies’
consolidated financial statements. See Note 20 for the
disclosures required by SFAS161.
In December 2008, the FASB issued FSP FAS
No.132(R)-1,“Employers’ Disclosures about Post retirement
Benefit Plan Assets” (“FSP 132R-1”). FSP 132R-1 requires
additional disclosures about plan assets including
investment allocation, fair value of major categories of
plan assets, development of fair value measurements,
and concentrations of risk. FSP 132R-1 is effective for
fiscal years ending after December 15, 2009. The
adoption of FSP 132R-1 will not have a material impact
on the Companies’ consolidated financial statements.
In May 2009, the FASB issued SFAS No.165,
“Subsequent Events” (“SFAS 165”). SFAS 165 defines
disclosures about the date through which companies
have evaluated subsequent events and the nature and
financial effect of nonrecognized subsequent events.
SFAS 165 is effective for fiscal year ending after June 15,
2009. The adoption of SFAS 165 will not have a material
impact on the Companies consolidated financial statements.