Annual Report 2004 [PDF/1.1MB]

c. Cash and Cash Equivalents
For the purposes of the consolidated statements of cash flows, cash and cash equivalents consist of cash on hand,
deposits with banks withdrawable on demand, net of overdrafts, and all highly liquid short-term investments which are readily
convertible to cash subject to an insignificant risk of any changes in their value and which were purchased with an original
maturity of three months or less.
d. Investments in Securities
The accounting standard for financial instruments requires that securities be classified into three categories: trading, held-to
maturity or other securities. Under this standard, trading securities are carried at fair value and held-to maturity debt
securities are carried at amortized cost. Marketable securities classified as other securities are carried at fair value with
any changes in unrealized holding gain or loss, net of the applicable income taxes, included directly in shareholders' equity.
Non-marketable securities classified as other securities are carried at cost. Cost of securities sold is determined principally
by the moving average method.
e. Inventories
Inventories are stated principally at cost determined by the moving-average method.
f. Derivatives
Derivative financial instruments are stated at fair value.
g. Property and Equipment
Property and equipment are carried at cost, except that one affiliate has revalued its land pursuant to the laws on land
revaluation.
Depreciation is computed by the declining-balance method over the estimated useful lives of the assets except for those
held by certain consolidated subsidiaries which apply the straight-line method. The straight-line method is applied to buildings
acquired subsequent to April 1, 1998.
h. Allowance for Doubtful Receivables
The Company and its domestic consolidated subsidiaries provide an allowance for doubtful receivables at the estimated
aggregate amount of probable bad debts plus an amount calculated based on their historical experience of bad debts.
The overseas consolidated subsidiaries provide an allowance for doubtful receivables at the estimated aggregate amount of
probable bad debts.
i. Accrued Retirement Benefits
Accrued retirement benefits for employees have been provided mainly at an amount calculated based on the retirement
benefit obligation and the fair value of the pension plan assets as of balance sheet dates, as adjusted for the unrecognized
net retirement benefit obligation at transition, unrecognized actuarial gain or loss, and unrecognized prior service cost. The
retirement benefit obligation is attributed to each period by the straight-line method over the estimated years of service of
the eligible employees. The net retirement benefit obligation at transition is being amortized principally over a period of 15
years by the straight-line method.
Actuarial gain and loss are amortized in the year following the year in which the gain or loss is recognized primarily by the
straight-line method over the average remaining years of service of the employees. Prior service cost is being amortized
as incurred by the straight-line method over the average remaining years of service of the employees.
See Note 6 for the method of accounting for the separation of the substitutional portion from the corporate portion of the
benefit obligation under Welfare Pension Fund Plan.
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