 applicable taxes, reported in a separate component of equity. 

Non-marketable available-for-sale securities are stated at cost determined by the moving-average method. For other than tempo- rary declines in fair value, investment securities are reduced to net realizable value by a charge to income. 

h. Property, Plant and Equipment —Property, plant and equip- ment are stated at cost. Depreciation of property, plant and equip- ment of the Company and its consolidated domestic subsidiaries is computed substantially by the declining-balance method at rates based on the estimated useful lives of the assets, while the straight- line method is applied to buildings acquired after April 1, 1998. The depreciation of property, plant and equipment of foreign consoli- dated subsidiaries is computed on the straight-line method over the estimated useful lives of the assets. The range of useful lives is principally from 8 to 50 years for buildings and structures, and from 7 to 12 years for machinery and equipment. 

Regarding the leased assets related to the finance leases for which ownership is not transferred, the useful lives of such assets are deemed to be the lease periods, and depreciation is calculated by the straight line depreciation method, depreciating the residual value of such assets to zero over the useful life. For finance leases for which ownership is not transferred to the lessee and the lease transaction was begun prior to March 31, 2008, the accounting treatment follows the method applicable to ordinary rental transactions. 

i. Long-lived Assets —The Group reviews its long-lived assets for impairment whenever events or changes in circumstances indi- cate the carrying amount of an asset or asset group may not be recoverable. An impairment loss would be recognized if the carry- ing amount of an asset or asset group exceeds the sum of the undiscounted future cash flows expected to result from the con- tinued use and eventual disposition of the asset or asset group. The impairment loss would be measured as the amount by which the carrying amount of the asset exceeds its recoverable amount, which is the higher of the discounted cash flows from the contin- ued use and eventual disposition of the asset or the net selling price at disposition. 

j. Allowance for Loss on Factory Restructurings —In order to prepare against loss on factory closures, which were determined as a part of the restructuring of the Group companies’ factories, the Company appropriated an amount deemed to be reasonable in 2009 and 2010. 

k. Bond Issue Costs —Bond issue costs are charged to income as incurred. 

l. Employees’ Retirement Benefits —The Group has non- contributory and contributory funded pension plans. The Group accounted for the liability for employees’ retirement benefits based on the projected benefit obligations and plan assets at the balance sheet date. 

Effective April 1, 2009, the Group applied ASBJ Statement No. 19, “Partial Amendments to Accounting Standard for Retirement Benefit (Part 3).” The adoption of the new accounting standard for the year ended March 31, 2010 had no effect on the consolidated financial statements. 

m. Retirement Allowances for Directors and Corporate  Auditors —Retirement allowances for directors and corporate auditors of certain consolidated subsidiaries are recorded to state the liability at the amount that would be required if all directors and corporate auditors retired at each balance sheet date. 

n. Research and Development Costs —Research and develop- ment costs are charged to income as incurred. 

o. Leases —In March 2007, the ASBJ issued ASBJ Statement No. 13, “Accounting Standard for Lease Transactions,” which revised the previous accounting standard for lease transactions issued in June 1993. The revised accounting standard for lease transactions is effective for fiscal years beginning on or after April 1, 2008 with early adoption permitted for fiscal years beginning on or after April 1, 2007. 

Under the previous accounting standard, finance leases that were deemed to transfer ownership of the leased property to the lessee were to be capitalized. However, other finance leases were permitted to be accounted for as operating lease transactions if certain “as if capitalized” information is disclosed in the notes to the lessee’s financial statements. The revised accounting standard requires that all finance lease transactions should be capitalized to recognize lease assets and lease obligations in the balance sheet. In addition, the revised accounting standard permits leases which existed at the transition date and do not transfer ownership of the leased property to the lessee to be accounted for as operating lease transactions. 

The Group applied the revised accounting standard effective April 1, 2008. In addition, the Group accounted for leases which existed at the transition date and do not transfer ownership of the leased property to the lessee as operating lease transactions. 

All other leases are accounted for as operating leases. 

p. Construction Contracts —In December 2007, the ASBJ issued ASBJ Statement No. 15, “Accounting Standard for Construction Contracts,” and ASBJ Guidance No. 18, “Guidance on Accounting Standard for Construction Contracts.” Under the previous  Japanese GAAP, either the completed-contract method or the percentage-of-completion method was permitted to account for construction contracts. Under this new accounting standard, the construction revenue and construction costs should be recognized by the percentage-of-completion method, if the outcome of a con- struction contract can be estimated reliably. When total construc- tion revenue, total construction costs and the stage of completion of the contract at the balance sheet date can be reliably measured, the outcome of a construction contract can be estimated reliably. If the outcome of a construction contract cannot be reliably esti- mated, the completed-contract method should be applied. When it is probable that the total construction costs will exceed total con- struction revenue, an estimated loss on the contract should be immediately recognized by providing for a loss on construction contracts. This standard is applicable to construction contracts and software development contracts, and effective for fiscal years beginning on or after April 1, 2009. The Group applied the new accounting standard effective April 1, 2009. The effect of this change was to increase sales by ¥4,176 million ($44,881  thousand), and operating income and income before income taxes and minority interests by ¥550 million ($5,916 thousand) for the year ended March 31, 2010. 

