Summary of Consolidated Full Year Results for 2011

(7) Changes in the basis of presenting consolidated financial statements
Previous Year Current Year
(From 1 Jan. 2010 (From 1 Jan. 2011
To 31 Dec. 2010) To 31 Dec. 2011)
(Change of accounting policy)
Regarding the standard for recording income from
contract work, the percentage of the completion
method had been applied to construction projects
worth 5 billion yen or more with a construction period
of more than one year and the completed contract
method had been applied to other construction
projects. The Group applied the Accounting Standards
for Construction Contracts (Accounting Standards
Board of Japan (ASBJ) Statement No. 15, December
27, 2007) and the Implementation Guidance on
Accounting Standards for Construction Contracts
(Implementation Guidance of ASBJ Statement No. 18,
December 27, 2007) in the current consolidated
financial year. From construction contracts started
during the current consolidated financial year, the
percentage of the completion method (cost related
method for estimation of complete percentage) is
applied to construction projects recognized to hold
certainty of outcomes for the portion completed by the
end of the period and the completed contract method is
applied to other construction projects. The change
caused an increase of 441 million yen in net sales, and
an increase of 44 million yen in operating income,
ordinary income, and net income before taxes,
compared with the previous method. The effects on
segment information are described in the
corresponding areas.
(Change of accounting policy)
Some consolidated subsidiaries, which had adopted the
declining balance method for tangible fixed assets,
changed the depreciation method to the straight-line
method in the current consolidated financial year. The
change was implemented because the straight-line
method is a more rational depreciation method to further
improve the appropriateness of periodical accounting of
profit and loss. It was a result of re-examination
regarding the investment purposes and the use of
refineries held by the consolidated subsidiaries, given
the change in economic environment for the oil
industry. The change caused an increase of 1,995
million yen in operating income and ordinary income,
and an increase of 1,990 million yen in net income
before taxes, compared with the previous method. The
effects on segment information are described in the
corresponding areas.
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(Change of accounting policy)
From the current consolidated financial year,
“Accounting Standards for Asset Retirement
Obligations” (Accounting Standards Board of Japan
[ASBJ] Statement No. 18, March 31, 2008) and
“Guidance on Accounting Standards for Asset
Retirement Obligations” (ASBJ Guidance No. 21,
March 31, 2008) have been applied. As a result,
operating income and ordinary income each declined
by 141 million yen, and income before income taxes
and minority interests declined by 1,922 million yen.
(Additional information)
Based on the “Accounting Standard for Consolidated
Financial Statements” (ASBJ Statement No. 22 of
December 26, 2008), the Group applies the “Cabinet
Office Ordinance Partially Revising Regulation on
Terminology, Forms and Preparation of Financial
Statements” (Cabinet Office Ordinance No.5, March
24, 2009). As a result, “Income before minority
interests” is included in the consolidated financial
statements in the current consolidated financial year.