4. CONSOLIDATED FINANCIAL STATEMENTS
|
||||||||||
The consolidated financial statements of NTT have been prepared in conformity with accounting principles generally accepted in the United States of America (Financial Accounting Standards Board (“FASB”) Accounting Standards Codification (“ASC”), etc.). |
||||||||||
Business Combinations Effective April 1, 2009, NTT Group adopted the accounting pronouncement issued by FASB in December 2007 relating to business combinations. This pronouncement requires use of the acquisition method of accounting, defines the acquirer, establishes the acquisition date and broadens the scope to all transactions and other events in which one entity obtains control over one or more other businesses. The adoption of this pronouncement did not have a material impact on the results of operations or the financial position of NTT Group. Noncontrolling Interests in Consolidated Financial Statements Effective April 1, 2009, NTT Group adopted the accounting pronouncement issued by FASB in December 2007 relating to noncontrolling interests in consolidated financial statements. This pronouncement establishes accounting and reporting standards for the noncontrolling interest (previously referred to as minority interests) in a subsidiary and for the deconsolidation of a subsidiary. This pronouncement requires the presentation that the noncontrolling interest should be reclassified to equity and consolidated net income should be adjusted to include net income attributed to the noncontrolling interest in the consolidated financial statements. This pronouncement also requires single method of accounting as equity transactions for changes in a parent’s ownership interest in a subsidiary that do not result in deconsolidation. The adoption of this pronouncement has an impact on the presentation of noncontrolling interests in the consolidated financial statements including retrospective reclassification. The repurchases of shares by the subsidiary resulting in changes in NTT’s ownership interest in the subsidiary have been accounted for as equity transactions with noncontrolling interests. In November 2009, NTT DOCOMO repurchased 154,065 shares for 20,000 million yen. As a result, NTT’s interest in NTT DOCOMO increased from 66.2% to 66.4%. “Additional paid-in capital” decreased by 2,061 million yen in the consolidated balance sheet as of March 31, 2010 related to the repurchase transactions. Accounting for Financial Guarantee Insurance Contracts Effective April 1, 2009, NTT Group adopted the accounting pronouncement issued by FASB in May 2008 relating to accounting for financial guarantee insurance contracts. This pronouncement prescribes accounting for insurers of financial obligations, bringing consistency to recognizing and recording premiums and to loss recognition. This pronouncement also requires expanded disclosures about financial guarantee insurance contracts. The adoption of this pronouncement did not have a material impact on the results of operations or the financial position of NTT Group. Subsequent event Effective April 1, 2009, NTT Group adopted the accounting pronouncement issued by FASB in May 2009 and February 2010 relating to subsequent events. This pronouncement requires that the effect of subsequent events that occurred after the balance-sheet date and before the date the financial statements are “issued” should be evaluated. The adoption of this pronouncement did not have an impact on the results of operations or the financial position of NTT Group. The FASB Accounting Standards Codification and the Hierarchy of Generally Accepted Accounting Principles Effective July 1, 2009, NTT Group adopted the accounting pronouncement issued by FASB in June 2009 relating to the FASB Accounting Standards Codification and the hierarchy of generally accepted accounting principles. This pronouncement prescribes the change which divides non-governmental U.S. GAAP into the authoritative Codification and the non-authoritative guidance, doing away with the previous four-level hierarchy. The financial statements that adopt this pronouncement should follow the Codification in place of legacy accounting pronouncements. The adoption of this pronouncement did not have an impact on the results of operations or the financial position of NTT Group. Improving Disclosure about Fair Value Measurements Effective January 1, 2010, NTT Group adopted Accounting Standards Update (“ASU”) 2010-06 “Improving Disclosures about Fair Value Measurements” issued by FASB, which requires new disclosures pursuant to ASC 820 “Fair Value Measurements and Disclosures.” This pronouncement prescribes new disclosures about recurring or nonrecurring fair-value measurements including significant transfers into and out of Level 1 and Level 2 fair-value measurements, which are part of the fair value hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. This pronouncement also prescribes new disclosures regarding the reconciliation of Level 3 fair-value measurements, which requires the description of the gross amount of purchases, sales, issuances, and settlements rather than the net amount. The new reconciliation of Level 3 fair-value measurements disclosure requirement is effective for interim and annual reporting periods beginning after December 15, 2010. The adoption of this pronouncement did not have an impact on the results of operations or the financial position of NTT Group.
Marketable Securities ASC320, “Investments - Debt and Equity Securities” applies. Inventories Inventories are stated at the lower of cost or market. The cost of telecommunications equipment to be sold is determined by the first-in first-out method. Property, Plant and Equipment Property, plant, and equipment are stated at cost. Depreciation is computed principally using the declining-balance method with the exception of buildings for which the straight-line method is used. Goodwill and Other Intangible Assets ASC350, “Intangibles - Goodwill and Other” applies. Liability for Employees’ Retirement Benefits ASC715, “Compensation - Retirement Benefits” applies. Derivative Financial Instruments ASC815, “Derivatives and Hedging” applies. Income Taxes Income taxes are computed based on income (loss) before income taxes in the consolidated statements of income. According to the asset and liability approach, the expected future tax consequences of temporary differences between the carrying amounts and the tax basis of assets and liabilities and of operating loss carryforward are recognized as deferred tax assets or liabilities.
On May 14, 2010, the board of directors resolved that the basic policy on cancellation of treasury stock owned by the Company was adopted as stated below.
| ||||||||||
|
Copyright (c) 2010 Nippon telegraph and telephone corporation |