Ricoh 2007 Annual Report Download - page 52

51 ANNUAL REPORT 2007
The Company and certain of its subsidiaries have various contributory and
noncontributory employees’ pension fund plans in trust covering substantially
all of their employees. Under the plans, employees are entitled to lump-sum
payments at the time of termination or retirement, or to pension payments.
Contributions to above pension plans have been made to provide future pension
payments in conformity with an actuarial calculation determined by the
current basic rate of pay.
On March 31, 2007, Ricoh adopted the recognition and disclosure provisions of
SFAS No.158, “Employers’ Accounting for Defined Benefit Pension and Other
Postretirement Plans,” for the measurement of pension liabilities. Under SFAS
158, Ricoh recognized the funded status (i.e., the difference between the fair
value of plan assets and the projected benefit obligations) of its pension fund
plans in the consolidated balance sheets as of March 31, 2007, with a
corresponding adjustment in initially applying SFAS 158 to accumulated other
comprehensive income, net of tax. The adjustment to accumulated other
comprehensive income at adoption represents the unrecognized net actuarial
loss, unrecognized prior service cost, and unrecognized transition obligation, all
of which were previously netted against the plans’ funded status in the
consolidated balance sheets pursuant to the provisions of SFAS 87. These
amounts will be subsequently recognized as net periodic benefit cost pursuant
to Ricoh’s historical accounting policy for amortizing such amounts.
Furthermore, actuarial gains and losses that arise in subsequent periods and are
not recognized as net periodic benefit cost in the same periods will be
recognized as a component of other comprehensive income. Those amounts
will be subsequently recognized as a component of total net periodic benefit cost
on the same basis as the amounts recognized in accumulated other
comprehensive income at adoption of SFAS 158.
The changes in the consolidated balance sheets as of March 31, 2007 arising
from the adoption of SFAS 158 are set out below:
12. PENSION AND RETIREMENT ALLOWANCE PLANS
Millions of Yen
Before application Adjustments After application
of SFAS 158 of SFAS 158
Lease deposits and other ¥ 97,645 ¥ 710 ¥ 98,355
Net deferred tax assets 36,287 (502) 35,785
Accrued expenses and other 138,946 4,414 143,360
Accrued pension and severance costs 99,681 (653) 99,028
Minority interests 57,689 (820) 56,869
Accumulated other comprehensive income 29,731 (2,733) 26,998
Thousands of U.S. Dollars
Before application Adjustments After application
of SFAS 158 of SFAS 158
Lease deposits and other $ 827,500 $ 6,017 $ 833,517
Net deferred tax assets 307,517 (4,254) 303,263
Accrued expenses and other 1,177,508 37,407 1,214,915
Accrued pension and severance costs 844,754 (5,534) 839,220
Minority interests 488,890 (6,949) 481,941
Accumulated other comprehensive income 251,958 (23,161) 228,797
The changes in the benefit obligation and plan assets of the pension plans for the years ended March 31, 2006 and 2007 are as follows:
Thousands of
Millions of Yen U.S. Dollars
2006 2007 2007
Change in benefit obligations:
Benefit obligations at beginning of year ¥343,623
¥368,813 $3,125,534
Service cost 14,691 15,687 132,941
Interest cost 10,192 11,121 94,246
Plan participants’ contributions 517 682 5,780
Actuarial loss 10,437 963 8,161
Settlement (654) (142) (1,203)
Benefits paid (14,408) (16,473) (139,602)
Foreign exchange impact 4,415 9,817 83,195
Benefit obligations assumed in connection with business acquisition - 7,503 63,585
Benefit obligations at end of year ¥368,813 ¥397,971 $3,372,636