Omron 2010 Annual Report Download - page 102

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The Companies have adopted ASC No.280, “Segment
Reporting” (previously SFAS No.131, “Disclosures about
segments of Enterprise and Related Information”) since
the year ended March 31, 2010.
Segment Information
ASC No.280 (previously SFAS No.131) establishes the dis-
closure of information about operating segments in financial
statements. Operating segments are defined as compo-
nents of an enterprise about which separate financial
information is available that is evaluated regularly by the
chief operating decision maker in deciding how to allocate
resources and in assessing performance. The operating
segments are determined based on the nature of the prod-
ucts and services offered.
The Companies disclosure operating segments in five
segments: “Industrial Automation Business,” “Electronic
and Mechanical Components Business,” “Automotive
Electronic Components Business,” “Social Systems Solutions
Business” and “Healthcare Business,” which are mainly
based on the Companies’ consideration of their lines of
business, positioning within the Companies of their busi-
nesses. And, the Companies totalize operating segments
other than the above five segments and disclosures them
in “Other.”
The primary products included in each segment are as
follows:
(1) Industrial Automation Business (IAB): Relays, sensors,
switches, programmable logic controllers, timers, vision
sensors, automated optical inspection devices, safety
components, temperature controllers, motion con-
trollers.
(2) Electronic and Mechanical Components Business
(EMC): Relays, switches, components and units for
amusement devices, connectors, combination jogs.
(3) Automotive Electronic Components Business (AEC):
Smart entry devices, power window switches, various
auto motive relays.
(4) Social Systems Solutions Business (SSB): Railway infra-
structure systems, traffic control and road control sys-
tems, security systems, payment systems.
(5) Healthcare Business (HCB): Digital blood pressure mon-
itors, digital thermometers, body composition monitors,
pedometers, patient monitors, nebulizers.
(6) Other: Computer peripheral equipments, MEMS
acoustic sensors, remote monitoring notice systems,
LCD backlight.
The accounting policies of the segment information are
substantially the same as those described in the signifi-
cant accounting policies in Note 1.
Revenues and expenses directly associated with spe-
cific segments are disclosed in the figures of each segment’s
operating result.
Based on the Companies’ allocation method used by
their management to evaluate results of each segment,
revenues and expenses not directly associated with spe-
cific segments are allocated to each segment or included
in “Eliminations and others.”
In addition, on the year ended March 31, 2010, the
Companies re-formed “Electronic Components Business”
to “Electronic and Mechanical Components Business”
to aim to enhance their Mechanical-Compo. And, the
Companies transferred their LCD backlight business and
their micro device business under Electronic Components
Business umbrella to a new organization under direct con-
trol of the President. With these changes, the Companies’
operating segments are altered from “Industrial Automation
Business,” “Electronic Components Business,” “Automotive
Electronic Components Business,” “Social Systems Business,”
“Healthcare Business” and “Other” to “Industrial Automation
Business,” “Electronic and Mechanical Components
Business,” “Automotive Electronic Components Business,”
“Social Systems Solutions Business” and “Healthcare
Business.” To reflect the results, the Companies have restat-
ed the figures of the segment information for the prior years to
conform to the current year presentation.
22. Segment Information
Notes to Consolidated Financial Statements
Omron Corporation and Subsidiaries
Investment Securities
Investment securities mainly consist of listed stocks. These
are classified as Level 1, because the fair value of the
investment securities is valued using a quoted market price
in active markets for identical assets and can be observed.
Derivatives
Derivatives consist of foreign exchange forward contracts,
foreign currency swaps and interest rate swaps. These are
classified as Level 2, because the fair value is valued using
the observable market data such as foreign exchange rates
or interest rates.
Assets and Liabilities Measured at Fair Value on a
Nonrecurring Basis
Long-lived assets with a carrying amount of ¥217 million
($2,333 thousand) were written down to their fair value of
¥0 million ($0 thousand), resulting in an impairment loss
of ¥217 million ($2,333 thousand), which was included in
earnings for the fiscal year ended March 31, 2010. These
assets were classified as Level 3, because these fair val-
ues were not valued using observable inputs.
Non-marketable investment securities with a carrying
amount of ¥142 million ($1,527 thousand) were written
down to their fair value of ¥27 million ($290 thousand),
resulting in an other-than-temporary impairment charge of
¥115 million ($1,237 thousand), which was included in earn-
ings for the fiscal year ended March 31, 2010. These
investments were classified as Level 3, because these fair
values were not valued using observable inputs.