Ricoh 2002 Annual Report Download - page 37

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( g) Plant and Equipment
Depreciation of plant and equipment is computed principally by using the declin-
ing-balance method over the estim ated useful lives. Most foreign subsidiaries have
adopted the straight-line m ethod for computing depreciation, which currently ac-
counts for approximately 40% of the consolidated depreciation expense.
Effective rates of depreciation for the years ended March 31, 2000, 2001 and
2002 are sum marized below:
Certain leased buildings, m achinery and equipment are accounted for as
capital leases in conform ity with SFAS No. 13, “Accounting for Leases.” The ag-
gregate cost included in plant and equipment and related accumulated
depreciation as of March 31, 2001 and 2002 were as follows:
The related future m inim um lease payments and the present value of the net
minim um lease payments as of March 31, 2002 were ¥3,286 m illion ( $24,707
thousand) and ¥3,113 million ( $23,406 thousand) , respectively.
Ordinary m aintenance and repairs are charged to incom e as incurred. Maj or
replacements and im provements are capitalized. When properties are retired or
otherwise disposed of, the property and related accum ulated depreciation ac-
counts are relieved of the applicable am ounts, and any differences are included in
other incom e or expenses.
( h) Goodwill
Ricoh has classified the cost in excess of fair value of the net assets of m ajor com -
panies acquired in purchase transactions as goodwill. Goodwill is being am ortized
on a straight-line method over the estim ated periods benefited, not to exceed 20
years.
( i) Pension and Retirement Allowances Plans
Ricoh conform s with SFAS No. 87, “Em ployers’ Accounting for Pensions,” in ac-
counting for pension and retirem ent allowances plans.
( j) Income Taxes
Ricoh conform s with SFAS No. 109, “Accounting for Incom e Taxes,” which re-
quires an asset and liability approach for financial accounting and reporting for
income taxes.
Income taxes are currently provided for undistributed earnings of foreign
subsidiaries and affiliates except for those that are deemed to be perm anent in-
vestments.
( k) Advertising
The costs of advertising are expensed as incurred.
( l) Shipping and Handling Costs
Shipping and handling costs, which m ainly include transportation to customers,
are included in Selling, General and Administrative Expenses on the consolidated
statem ents of incom e. Shipping and handling costs were ¥11,123 million and
¥13,332 m illion ( $100,241 thousand) for the years ended March 31, 2001 and
2002, respectively.
( m) Impairment Loss on Long-Lived Assets
Ricoh conform s with SFAS No. 121, “Accounting for the Im pairment of Long-
Lived Assets and for Long-Lived Assets to Be Disposed Of,” in accounting for im -
pairm ent losses on long-lived assets and certain identifiable intangibles. In
perform ing the review for recoverability of long-lived assets and certain identifi-
able intangibles, Ricoh estim ates the future cash flows expected to result from the
use of the asset and its eventual disposition. An impairm ent loss is recognized if
the sum of the expected future cash flows ( undiscounted and without interest
charges) is less than the carrying am ount of the asset. For purposes of such com-
parison, portions of unallocated excess of cost over net assets acquired were at-
tributed to related long-lived assets and identifiable intangible assets, based upon
the relative fair values of such assets at acquisition. Measurement of an im pair-
ment loss for long-lived assets and identifiable intangibles is based on the fair val-
ue of the asset.
( n) Ear nings Per Share
Basic net income per common share is calculated by dividing net income by the
weighted-average num ber of shares outstanding during the reported period. The
calculation of diluted net income per common share is sim ilar to the calculation
of basic net income per share, except that the weighted-average num ber of shares
outstanding includes the additional dilution from potential common stock equiv-
alents such as convertible bonds.
( o) Accounting for Stock Splits
Before September 30, 2001, the stock splits of common stock m ade at various
times had been accounted for by transferring an am ount equivalent to the par
value of such stocks from additional paid-in capital to common stock in the case
of capitalization by resolution of the Board of Directors. However, no accounting
recognition was m ade for stock splits when comm on stock already included a por-
tion of the proceeds from shares issued at a price in excess of par value. The
Japanese Com mercial Code, am ended effective on October 1, 2001, no longer re-
quires a transfer from additional paid-in capital to comm on stock in such cases
( see Note 12) .
In the United States, distributions of shares in com parable circumstances are
required to be accounted for by transferring am ounts equal to the fair market val-
ue of the shares issued from retained earnings to com m on stock and additional
paid-in capital.
( p) Consolidated Statements of Cash Flows
Cash and cash equivalents include highly liquid investm ents with a maturity of
three m onths or less at the date of purchase.
The following noncash transactions have been excluded from the consolidat-
ed statements of cash flows:
Thousands of
U.S. dollars
2 0 0 2
$49,459
2 9 ,8 1 2
Millions of yen
Aggregate cost
Accum ulated depreciation
¥ 6 ,5 7 8
3,965
¥6,413
3,448
2 0 0 2
2001
8 .3 %
4 0 .6
2001
8.0%
36.6
2000
7.9%
37.6
2 0 0 2
Buildings
Machinery and equipment