Trend Micro 2009 Annual Report Download - page 32

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34
<Lease assets>
Lease assets arising from non-ownership-transfer finance leases
The Company has applied a straight-line method, which assumes that a useful life
is equal to the lease period and that an estimated residual value is zero. There are
no lease assets applicable the straight-line method in the consolidated fiscal term.
The conventional accounting treatment still applies to non-ownership-transfer
finance leases that commenced before the starting day in order to apply a new
revised accounting standard for the lease transactions..
3. Accounting policies for allowances
Allowance for bad debt In order to reserve future losses from default of
notes and accounts receivable, bad debt provision
is provided. The amount is determined using the
percentage based on actual doubtful account loss
against total of debts. As for high-risk
receivables, expected unrecoverable amount is
considered individually.
Allowance for loss on investments
in subsidiaries and affiliates
In order to reserve future loss from investments
in subsidiaries, estimated loss from investments
in subsidiaries is provided based on the
consideration of the relevant subsidiary’s
financial condition and expected recoverability.
Allowance for bonuses Bonuses for employees are provided at an
estimate of the amount
Allowance for bonuses is not provided during this
fiscal year.
Allowance for sales return In order to reserve future losses from sales return
subsequent to the fiscal year end, allowance for
sales return is provided based on the past
experience in the sales return.
Allowance for retirement benefits: In order to reserve future losses arising from the
retirement of employees, allowance for
retirement benefits recognized to have been
incurred at the end of the period is provided
based on retirement benefit liabilities projected
at the end of the period.
Actuarial difference is recognized in the following
fiscal year.
󲃕Additional information󲃖
The proposal to pay retirement benefits for termination resulting from the abolition of the
retirement benefits scheme for directors and corporate auditors was approved by the
Shareholders at the annual shareholders meeting held on 25 March 2009. Based on the resolution,
the Company has removed all retirement benefits for termination in the fiscal term.
4. 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.