Pioneer 2014 Annual Report Download - page 35

q. Foreign Currency Translations
All short-term and long-term monetary receivables
and payables denominated in foreign currencies are
translated into Japanese yen at the exchange rates
at the consolidated balance sheet date. The foreign
exchange gains and losses from translation are rec-
ognized in the consolidated statement of operations
to the extent that they are not hedged by forward
exchange contracts.
r. Foreign Currency Financial Statements
The balance sheet accounts of the consolidated for-
eign subsidiaries are translated into Japanese yen
at the current exchange rate as of the consolidated
balance sheet date, except for equity, which is trans-
lated at the historical rate. Differences arising from
such translations are shown as “Foreign currency
translation adjustments” in a separate component of
equity. Revenue and expense accounts of consoli-
dated foreign subsidiaries are translated into yen at
the average exchange rate.
s. Derivatives and Hedging Activities
The Group uses derivative financial instruments
to manage its exposures to fluctuations in foreign
exchange and interest rates. Foreign exchange for-
ward contracts and currency swaps are utilized by
the Group to reduce foreign currency exchange and
interest rate risks associated with assets and liabilities
denominated in foreign currencies and debt obliga-
tions. The Group does not enter into derivatives for
trading or speculative purposes.
Derivative financial instruments and foreign cur-
rency transactions are classified and accounted for as
follows: (a) all derivatives are recognized as either assets
or liabilities and measured at fair value, and gains
or losses on derivative transactions are recognized in
the consolidated statement of operations and (b) for
derivatives used for hedging purposes, if such deriva-
tives qualify for hedge accounting because of high
correlation and effectiveness between the hedging
instruments and the hedged items, gains or losses on
derivatives are deferred until maturity of the hedged
transactions.
The foreign currency forward contracts, currency
options and currency swaps are utilized to hedge
foreign currency exposures in export sales and pro-
curements from overseas suppliers. Trade receivables
and trade payables denominated in foreign currencies
are translated at the contracted rates if the currency
swaps qualify for hedge accounting.
t. Per Share Information
Basic net income (loss) per share is computed by
dividing net income (loss) available to common share-
holders by the weighted-average number of shares
of common stock outstanding for the period, after
deduction of treasury stock, retroactively adjusted for
stock splits. Diluted net income (loss) per share for
the years ended March 31, 2014 and 2013, is not
disclosed as there were no potentially dilutive securi-
ties for the years ended March 31, 2014 and 2013.
Diluted net income (loss) per share reflects the
potential dilution that could occur if securities were
exercised or converted into common stock. Diluted
net income (loss) per share of common stock as-
sumes full conversion of the outstanding convertible
notes and bonds at the beginning of the year (or at
the time of issuance) with an applicable adjustment
for related interest expense, net of tax, and full exercise
of outstanding warrants.
Cash dividends per share presented in the ac-
companying consolidated statement of operations are
dividends applicable to the respective years including
dividends to be paid after the end of the year.
u. New Accounting Pronouncements
Accounting Standards for Business Combinations
and Consolidated Financial Statements —
On September 13, 2013, the ASBJ issued revised
ASBJ Statement No. 21, “Accounting Standard for
Business Combinations,” revised ASBJ Guidance
No. 10, “Guidance on Accounting Standards for
Business Combinations and Business Divestitures,”
and revised ASBJ Statement No. 22, “Accounting
Standard for Consolidated Financial Statements.”
Major accounting changes are as follows:
(a) Transactions with noncontrolling interest — A parent’s
ownership interest in a subsidiary might change if the
parent purchases or sells ownership interests in its
subsidiary. The carrying amount of minority interest is
adjusted to reflect the change in the parent’s ownership
interest in its subsidiary while the parent retains its
controlling interest in its subsidiary. Under the cur-
rent accounting standard, any difference between the
fair value of the consideration received or paid and
the amount by which the minority interest is adjusted
is accounted for as an adjustment of goodwill or as
profit or loss in the consolidated statement of opera-
tions. Under the revised accounting standard, such
difference shall be accounted for as capital surplus as
long as the parent retains control over its subsidiary.
(b) Presentation of the consolidated balance sheet — In
the consolidated balance sheet, “Minority interest”
under the current accounting standard will be changed
to “Noncontrolling interest” under the revised account-
ing standard.
33
Pioneer Corporation
Annual Report 2014