recording the prior years’ effects of changes in accounting policies in the income statement where retrospective adjustments to the financial statements have been incorporated; and (6) exclusion of minority interests from net income, if included. This standard is applicable to the equity method of accounting for fiscal years beginning on or after April 1, 2010 with early adoption permitted for fiscal years beginning on or after April 1, 2009. 

Asset Retirement Obligations —In March 2008, the ASBJ pub- lished a new accounting standard for asset retirement obligations, ASBJ Statement No. 18, “Accounting Standard for Asset Retire- ment Obligations,” and ASBJ Guidance No. 21, “Guidance on Accounting Standard for Asset Retirement Obligations.” Under this accounting standard, an asset retirement obligation is defined as a legal obligation imposed either by law or contract that results from the acquisition, construction, development and the normal opera- tion of a tangible fixed asset and is associated with the retirement of such tangible fixed asset. The asset retirement obligation is recognized as the sum of the discounted cash flows required for the future asset retirement and is recorded in the period in which the obligation is incurred if a reasonable estimate can be made. If a reasonable estimate of the asset retirement obligation cannot be made in the period the asset retirement obligation is incurred, the liability should be recognized when a reasonable estimate of the asset retirement obligation can be made. Upon initial recognition of a liability for an asset retirement obligation, an asset retirement cost is capitalized by increasing the carrying amount of the related fixed asset by the amount of the liability. The asset retirement cost is subsequently allocated to expense through depreciation over the remaining useful life of the asset. Over time, the liability is accreted to its present value each period. Any subsequent revisions to the timing or the amount of the original estimate of undiscounted cash flows are reflected as an increase or a decrease in the carrying amount of the liability and the capitalized amount of the related asset retirement cost. This standard is effective for fiscal years beginning on or after April 1, 2010 with early adoption permitted for fiscal years beginning on or before March 31, 2010. 

Accounting Changes and Error Corrections —In December 2009, ASBJ issued ASBJ Statement No. 24, “Accounting Standard for Accounting Changes and Error Corrections,” and ASBJ Guid- ance No. 24, “Guidance on Accounting Standard for Accounting Changes and Error Corrections.” Accounting treatments under this standard and guidance are as follows: 

(1) Changes in accounting policies 

When a new accounting policy is applied with revision of account- ing standards, a new policy is applied retrospectively unless the revised accounting standards include specific transitional provi- sions. When the revised accounting standards include specific transitional provisions, an entity shall comply with the specific tran- sitional provisions. 

(2) Changes in presentation 

When the presentation of financial statements is changed, prior period financial statements are reclassified in accordance with the new presentation. 

(3) Changes in accounting estimates 

A change in an accounting estimate is accounted for in the period of the change if the change affects that period only, and is accounted for prospectively if the change affects both the period of the change and future periods. 

## (4) Corrections of prior period errors 

When an error in prior period financial statements is discovered, those statements are restated. 

This accounting standard and the guidance are applicable to accounting changes and corrections of prior period errors which are made from the beginning of the fiscal year that begins on or after April 1, 2011. 

Segment Information Disclosures —In March 2008, the ASBJ revised ASBJ Statement No. 17, “Accounting Standard for Seg- ment Information Disclosures,” and issued ASBJ Guidance No. 20, “Guidance on Accounting Standard for Segment Information Dis- closures.” Under the standard and guidance, an entity is required to report financial and descriptive information about its reportable segments. Reportable segments are operating segments or aggre- gations of operating segments that meet specified criteria. Operat- ing segments are components of an entity about which separate financial information is available and such information is evaluated regularly by the chief operating decision maker in deciding how to allocate resources and in assessing performance. Generally, seg- ment information is required to be reported on the same basis as is used internally for evaluating operating segment performance and deciding how to allocate resources to operating segments. This accounting standard and the guidance are applicable to segment information disclosures for the fiscal years beginning on or after April 1, 2010. 

## 3. Business Combinations 

## Share Acquisition of Overseas Operating Companies by Inax Corporation 

(a) Names of the companies acquired, their major businesses, major reasons for the acquisition, the date of the acquisition, legal form of the acquisition, names of the companies after the acquisition, and the ownership ratios acquired, are as follows: 

(1) Names of the companies acquired and their major business 

Names of the Companies Acquired 

A-S CHINA PLUMBING PRODUCTS Ltd. A-S CHINA Co., Ltd.* 1 AMERICAN STANDARD JIANGMEN FITTINGS Co., Ltd.* 1 A-S (SHANGHAI) POTTERY Co., Ltd.* 1 A-S (GUANGZHOU) ENAMELWARE Co., Ltd.* 1 HUA MEI SANITARY WARE Co., Ltd.* 1 A-S (TIANJIN) POTTERY Co., Ltd.* 1 AMERICAN STANDARD B&K (THAILAND) PUBLIC Co., Ltd. IDEAL STANDARD (THAILAND) Ltd. CERAMIC SANITARYWARE Pte. Ltd. AMERICAN STANDARD VIETNAM, Inc.* 2 AMERICAN STANDARD KOREA, Inc. PT AMERICAN STANDARD INDONESIA AMERICAN STANDARD PHILIPPINES LIMITED, Co. AMERICAN STANDARD BATH&KITCHEN INDIA Pte. Ltd. 

*1 denotes subsidiaries of A-S CHINA PLUMBING PRODUCTS Ltd. 

*2 denotes subsidiaries of CERAMIC SANITARYWARE Pte. Ltd. 

Major Business 

Plumbing fixtures business 

