Trend Micro 2009 Annual Report Download - page 25

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27
years) of employees at the time of occurrence of such difference.
(4) Policy for translation of major foreign currency assets and liabilities into Yen
Foreign currency denominated receivables and payables are translated into Japanese
yen at period-end rates of exchange and the resulting foreign currency translation
adjustments are taken into account in regards to profits and losses.
Assets and liabilities of foreign subsidiaries are translated into Japanese yen at period-
end spot exchange rate and all income and expense accounts are translated at average
exchange rate. The resulting translation adjustments are included in foreign currency
translation adjustment and minority interest.
(5) Revenue Recognition Policy
Sales recognition policy for PCS
Basically, the product license agreement contracted with the end-user contains
provisions concerning PCS (customer support and upgrading of products and its pattern
files). The Company applies the following revenue recognition method for the portion of
PCS.
Portion of PCS revenue is recognized separately from total revenue and is deferred as
deferred revenues under current and non-current liabilities based on the contracted
period. Deferred revenue is finally recognized as revenue evenly over the contracted
period.
(6) Consumption tax
Accounting subject to consumption tax are stated at the amount net of the related
consumption tax.
(7) Valuation of assets and liabilities of consolidated subsidiaries
Assets and liabilities of the consolidated subsidiaries are measured at fair value.
(8) Amortization of Goodwill
Goodwill is amortized evenly over the appropriate period not exceeding 20 years.
(9) All the amounts shown in yen in this document have been expressed in the unit of one
million (1,000,000) yen with any amount less than such unit being disregarded.
󲃕Changes in accounting policy)
1. Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements
Effective from this fiscal year, “Practical Solution on Unification of Accounting Policies Applied
to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ Practical Issues Task
Force No.18, May 17, 2006) has been applied, and accordingly made any necessary
modifications to its consolidated financial statements. The effect of this change is minimal
2. Accounting Standard for Lease Transactions
Non-ownership-transfer finance leases were subject to accounting treatment for operating
leases. However, effective from this fiscal year, the Company has adopted the “Accounting
Standard for Lease Transactions” (ASBJ Statement No. 13; March 30, 2007) and the “Guidance
on Accounting Standard for Lease Transactions” (ASBJ Statement Guidance No. 16; March 30,
2007). Please note that this change will have zero effect. The conventional accounting
treatment still applies to non-ownership-transfer finance leases that commenced before the
starting day in order to apply the new revised accounting standard for the lease transactions
(NOTES TO THE CONSOLIDATED BALANCE SHEET)
Accumulated depreciation of property and equipment: 8,945 million yen