Yamaha 2008 Annual Report Download - page 73

Download and view the complete annual report

Please find page 73 of the 2008 Yamaha annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.

Page out of 96

  • 1
  • 2
  • 3
  • 4
  • 5
  • 6
  • 7
  • 8
  • 9
  • 10
  • 11
  • 12
  • 13
  • 14
  • 15
  • 16
  • 17
  • 18
  • 19
  • 20
  • 21
  • 22
  • 23
  • 24
  • 25
  • 26
  • 27
  • 28
  • 29
  • 30
  • 31
  • 32
  • 33
  • 34
  • 35
  • 36
  • 37
  • 38
  • 39
  • 40
  • 41
  • 42
  • 43
  • 44
  • 45
  • 46
  • 47
  • 48
  • 49
  • 50
  • 51
  • 52
  • 53
  • 54
  • 55
  • 56
  • 57
  • 58
  • 59
  • 60
  • 61
  • 62
  • 63
  • 64
  • 65
  • 66
  • 67
  • 68
  • 69
  • 70
  • 71
  • 72
  • 73
  • 74
  • 75
  • 76
  • 77
  • 78
  • 79
  • 80
  • 81
  • 82
  • 83
  • 84
  • 85
  • 86
  • 87
  • 88
  • 89
  • 90
  • 91
  • 92
  • 93
  • 94
  • 95
  • 96

71Annual Report 2008
(m) Leases
Non-cancelable leases are accounted for as operating leases regardless of whether such leases are classified as operating
or finance leases, except that leases which stipulate the transfer of ownership of the leased assets to the lessee are
accounted for as finance leases.
(n) Income taxes
Deferred income taxes are recognized by the asset and liability method. Under this method, deferred tax assets and liabilities
are determined based on the differences between financial reporting and the tax bases of the assets and liabilities and are
measured using the enacted tax rates and laws which will be in effect when the differences are expected to reverse.
(o) Derivative financial instruments
Derivative financial instruments are carried at fair value with any changes in unrealized gain or loss charged or credited to
income, except for those which meet the criteria for deferral hedge accounting under which the unrealized gain or loss is
deferred as an asset or a liability. Forward foreign exchange contracts which meet certain criteria are accounted for by the
allocation method which is utilized to hedge against risk arising from fluctuation in foreign exchange rates.
The Yamaha Group does not conduct an assessment of the effectiveness of its hedging activities because the relation-
ship between the anticipated cash flows fixed by the hedging activities and the avoidance of market risk is so clear that there
is no need to evaluate the performance of each hedge against that of the underlying hedged item.
2. CHANGES IN METHODS OF ACCOUNTING
(1) Change in method of depreciation
Pursuant to the revision of the Corporate Tax Law of Japan (the “Tax Law”) which went into effect on April 1, 2007, the Com-
pany and its domestic consolidated subsidiaries have adopted the declining-balance method for calculating depreciation of
tangible fixed assets acquired on or after April 1, 2007, using a rate that is 2.5 times that which would have been used if the
straight-line method had been applied.
As a result of this change, for the year ended March 31, 2008, operating income, and income before income taxes and
minority interests both decreased by ¥529 million ($5,280 thousand) and net income decreased by ¥349 million ($3,483
thousand) from the corresponding amounts which would have been recorded under the previous method.
The effect of this change on segment information is disclosed in Note 23.
In addition, pursuant to the revision of the Tax Law which went into effect on April 1, 2007, effective April 1, 2007, the
Company and its domestic consolidated subsidiaries have changed their method of accounting for depreciation of tangible
fixed assets acquired on or before March 31, 2007 to depreciating the residual value of such assets which have been fully
depreciated to their respective depreciable limits under the Tax Law to nominal value over a period of five years based on the
straight-line method.
As a result of this change, for the year ended March 31, 2008, operating income, and income before income taxes and
minority interests both decreased by ¥927 million ($9,252 thousand) and net income decreased by ¥588 million ($5,869
thousand) from the corresponding amounts which would have been recorded under the previous method.
The effect of this change on segment information is disclosed in Note 23.
(2) Accounting Standard for Presentation of Net Assets in the Balance Sheet
Effective the previous fiscal year, the Company adopted “Accounting Standard for Presentation of Net Assets in the Balance
Sheet” (Accounting Standards Board of Japan (ASBJ) Statement No. 5 issued on December 9, 2005) and “Guidance on Account-
ing Standard for Presentation of Net Assets in the Balance Sheet” (ASBJ Guidance No. 8 issued on December 9, 2005).
Total shareholders’ equity under the previous method of presentation was equivalent to ¥346,873 million at March 31, 2007.
(3) Accounting Standard for Directors’ Bonuses
Effective the previous fiscal year, the Company adopted “Accounting Standard for Directors’ Bonuses” (ASBJ Statement
No. 4 issued on November 29, 2005).
As a result, operating income, and income before income taxes and minority interests both decreased by ¥100 million
from the corresponding amounts which would have been recorded under the previous accounting standard.