Yamaha 2006 Annual Report Download - page 61

Yamaha Annual Report 2006 61
(n) Land revaluation
Pursuant to the “Law Concerning the Revaluation of Land,” land used for the business operations of the Company, two consolidat-
ed subsidiaries and an affiliate was revalued. The excess of the revalued carrying amount over the book value before revaluation has
been included in shareholders’ equity.
This land revaluation was determined based on the official standard notice prices. It was conducted in accordance with the
relevant regulations of the Corporation Tax Law of Japan with certain adjustments as deemed necessary.
(o) Appropriation of retained earnings
Under the Commercial Code of Japan (the “Code”), the appropriation of retained earnings with respect to a given financial period is
made by resolution of the shareholders at a general meeting held subsequent to the close of such financial period. The accounts for
that period do not, therefore, reflect such appropriations. On May 1, 2006 the new Corporation Law of Japan (“the Law”), which
superseded the Commercial Code, went into effect. Under the Code, the Company was permitted to declare an annual dividend as
well as an interim dividend. Under the Law, flexible payment of dividends is permissable subject to certain limits on appropriation of
retaired earnings as well as to approval by resolution of the shareholders. Refer to Note 22.
2. CHANGE IN METHOD OF ACCOUNTING
A new Japanese accounting standard for Impairment of Fixed Assets was issued in August 2002 and went into effect for financial
years beginning on or after April 1, 2005. Early adoption was permissible for the financial year beginning on or after April 1, 2004.
The new standard requires that tangible and intangible fixed assets be carried at cost less depreciation, and be reviewed for impair-
ment whenever events or changes in circumstances indicate that the carrying amount of an asset may not be recoverable.
Companies are required to recognize an impairment loss in their income statement or if certain indicators of assets impairment exist
and if the book value of the fixed assets exceeds the undiscounted sum of their future cash flows.
Effective April 1, 2004, the Company and its consolidated subsidiaries opted for early adoption of the new accounting standard
for the impairment of fixed assets. The effect of the adoption of this standard was to recognize an impairment loss of ¥32,703 mil-
lion and to decrease depreciation expense by ¥1,238 million for the year ended March 31, 2005. As a result, income before income
taxes and minority interests decreased by ¥31,464 million for the year ended March 31, 2005.
After recognition of an impairment loss, “fixed assets” represents the total recoverable amount which is stated at the carrying
amount less the accumulated impairment loss. See Note 21 for loss on impairment of fixed assets and the related effects on seg-
ment information.
3. U.S. DOLLAR AMOUNTS
Solely for the convenience of the reader, the accompanying financial statements for the year ended March 31, 2006 have been
presented in U.S. dollars by translating all yen amounts at ¥117.47 = U.S.$1.00, the exchange rate prevailing on March 31, 2006.
This translation should not be construed as a representation that yen have been, could have been, or could in the future be converted
into U.S. dollars at the above or any other rate.
Investments in and advances to unconsolidated subsidiaries and affiliates
Other
Investment securities
2006
$ 766,953
364,408
$1,131,370
2005
¥ 70,859
30,155
¥ 101,015
2006
¥ 90,094
42,807
¥ 132,902
Millions of Yen
Thousands of
U.S. Dollars
4. INVESTMENT SECURITIES
Investment securities at March 31, 2006 and 2005 were as follows: