Cost of securities sold is determined by the moving average method.
(g) Property, plant and equipment and depreciation
Depreciation of property, plant and equipment of the Company and its
consolidated subsidiaries is calculated principally by the straight-line
method based on the estimated useful lives and the residual value
determined by the Company. Significant renewals and additions are
capitalized at cost. Maintenance and repairs are charged to income.
(h) Leases
Noncancellable lease transactions that transfer substantially all risks
and rewards associated with the ownership of assets are accounted
for as finance leases. All other lease transactions are accounted for
as operating leases and relating payments are charged to income as
incurred. See Note 2(c).
(i) Retirement benefits
Accrued retirement benefits for employees have been provided
mainly at an amount calculated based on the retirement benefit
obligation and the fair value of the pension plan assets as of balance
sheet date, as adjusted for unrecognized net retirement benefit
obligation at transition, unrecognized actuarial gain or loss, and
unrecognized prior service cost. The retirement benefit obligation is
attributed to each period by the straight-line method over the
estimated years of service of the eligible employees. The net
retirement benefit obligation at transition is being amortized
principally over a period of 15 years by the straight-line method.
Actuarial gain or loss is amortized in the year following the year in
which the gain or loss is recognized primarily by the straight-line
method over periods (principally 8 years through 18 years) which are
shorter than the average remaining years of service of the
employees. Certain foreign consolidated subsidiaries have adopted
the corridor approach for the amortization of actuarial gain and loss.
Prior service cost is being amortized as incurred by the straight-line
method over periods (principally 9 years through 15 years) which are
shorter than the average remaining years of service of the
employees.
See Note 9 for the method of accounting for the separation of the
substitutional portion of the benefit obligation from the corporate
portion of the benefit obligation under Welfare Pension Fund Plan.
See Note 2(b) for adoption of a new accounting standard by a
consolidated subsidiary in the United Kingdom.
(j) Income taxes
Deferred tax assets and liabilities have been recognized in the
consolidated financial statements with respect to the differences
between financial reporting and the tax bases of the assets and
liabilities, and were measured using the enacted tax rates and laws
which will be in effect when the differences are expected to reverse.
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Nissan Motor Co., Ltd. and Consolidated Subsidiaries
Fiscal year 2004 (Year ended March 31, 2005)
FINANCIAL SECTION
Nissan Annual Report 2004 77