Annual Report 2002 [PDF/1.6MB]

2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (continued)i. Accrued Retirement BenefitsEffective April 1, 2000, the Company and its domestic subsidiaries adopted a new accounting standard for retirement benefits.In accordance with the new standard, accrued retirement benefits are provided based on the amount of projected benefitobligation reduced by pension plan assets at fair value at the end of the annual period.j. LeasesThe Companies lease certain equipment and fixtures under non-cancelable lease agreements referred to finance leases.Finance leases other than those which transfer the ownership of the leased property to the lessees are accounted for asoperating leases.k. Hedge AccountingThe Companies apply deferred hedge accounting to interest rate swaps to manage interest rate fluctuation risks based onthe Company's internal management rule.l. Interest CostThe Company capitalizes interest cost as a component of the acquisition costs of projects and land under development heldfor sale, if estimated acquisition costs are ¥500 million or more and development periods exceed one year.m. Income TaxesThe Companies recognize deferred income taxes arising from temporary differences between the tax basis of assets andliabilities and their reported amounts in the financial statements.n. Unrealized holding gains on landUnder the law on land revaluation and revised law on land revaluation, an affiliate company, which is accounted for by the equitymethod revaluated land held for its own use during the year ended March 31, 2002. The unrealized gain on land holdings, netof the applicable income taxes, is reported as a separate component of shareholders’ equity.o. Amounts Per ShareThe computation of basic net loss per share is based on the weighted average number of shares of common stock outstandingduring each year. The average number of shares used in the computation was 134,330 and 131,111 thousands for the yearsended March 31, 2002 and 2001, respectively.38