Pioneer 2010 Annual Report Download - page 35

Unification of Accounting Policies Applied to Foreign
Affiliated Companies for the Equity Method—
The current accounting standard requires unification of
accounting policies within the consolidation group. However,
the current guidance allows application of the equity method
for the financial statements of its foreign affiliated companies
which have been prepared in accordance with generally
accepted accounting principles in their respective jurisdictions
without unification of accounting policies.
In March 2008, the ASBJ issued ASBJ Statement No. 16,
“Accounting Standard for Equity Method of Accounting for
Investments.” The new standard requires that adjustments
be made to conform the affiliate’s accounting policies for
similar transactions and events under similar circumstances
to those of the investors when the affiliate’s financial state-
ments are used in applying the equity method unless it is
impracticable to determine adjustments. In addition, financial
statements prepared by foreign affiliated companies in
accordance with either International Financial Reporting
Standards or the generally accepted accounting principles in
the United States tentatively may be used in applying the
equity method if the following items are adjusted so that net
income is accounted for in accordance with Japanese GAAP
unless they are not material: 1) amortization of goodwill; 2)
scheduled amortization of actuarial gain or loss of pensions
that has been directly recorded in the equity; 3) expensing
capitalized development costs of R&D; 4) cancellation of the
fair value model accounting for property, plant, and equip-
ment and investment properties and incorporation of the cost
model accounting; 5) recording the prior years' effects of
changes in accounting policies in the income statement
where retrospective adjustments to the financial statements
have been incorporated; and 6) exclusion of minority inter-
ests from net income, if contained.
This standard is applicable to equity method of accounting
for fiscal years beginning on or after April 1, 2010 with early
adoption permitted for fiscal years beginning on or after April
1, 2009.
Accounting Changes and Error Corrections—
In December 2009, ASBJ issued ASBJ Statement No. 24
“Accounting Standard for Accounting Changes and Error
Corrections” and ASBJ Guidance No. 24 “Guidance on
Accounting Standard for Accounting Changes and Error
Corrections.” Accounting treatments under this standard and
guidance are as follows;
(1) Changes in Accounting Policies:
When a new accounting policy is applied with revision of
accounting standards, a new policy is applied retrospec-
tively unless the revised accounting standards include
specific transitional provisions. When the revised account-
ing standards include specific transitional provisions, an
entity shall comply with the specific transitional provisions.
(2) Changes in Presentations
When the presentation of financial statements is changed,
prior period financial statements are reclassified in accor-
dance with the new presentation.
(3) Changes in Accounting Estimates
A change in an accounting estimate is accounted for in the
period of the change if the change affects that period only,
and is accounted for prospectively if the change affects
both the period of the change and future periods.
(4) Corrections of Prior Period Errors
When an error in prior period financial statements is
discovered, those statements are restated.
This accounting standard and the guidance are appli-
cable to accounting changes and corrections of prior period
errors which are made from the beginning of the fiscal year
that begins on or after April 1, 2011.
Segment Information Disclosures—
In March 2008, the ASBJ revised ASBJ Statement No. 17
“Accounting Standard for Segment Information Disclosures”
and issued ASBJ Guidance No. 20 “Guidance on Accounting
Standard for Segment Information Disclosures.” Under the
standard and guidance, an entity is required to report financial
and descriptive information about its reportable segments.
Reportable segments are operating segments or aggrega-
tions of operating segments that meet specified criteria.
Operating segments are components of an entity about
which separate financial information is available, and such
information is evaluated regularly by the chief operating
decision maker in deciding how to allocate resources and in
assessing performance. Generally, segment information is
required to be reported on the same basis as is used inter-
nally for evaluating operating segment performance and
deciding how to allocate resources to operating segments.
This accounting standard and the guidance are applicable to
segment information disclosures for the fiscal years begin-
ning on or after April 1, 2010.
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PIONEER CORPORATION Annual Report 2010