IAS 37, analysis of provisions, uncertainties, discount rate, current and non-current

Nihon Dempa Kogyo Co., Ltd. – Annual report – 31 March 2018

Industry – manufacturing

CONSOLIDATED STATEMENTS OF FINANCIAL POSITION (extract)

Nihon Dempa Kogyo Co., Ltd. and Consolidated Subsidiaries

As of March 31, 2018 and 2017

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  1. Provisions

 

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Asset retirement obligation

The Company made a provision for asset retirement obligation in respect of the Company’s obligation to the landlord to dismantle and remove leasehold improvements from a leased office at the end of the lease contract. Considering the long-term nature of the liability, the major uncertainties are the cost that will be incurred and the time the lease contract ends. The Company has estimated the cost using an estimate provided by a third party and the lease period in consideration of that of the Company’s former office and the useful life of the furniture and fixtures attached to the office. The provision has been calculated using a discount rate 0.8%.

Settlement for products sold

The Company made a provision for settlement for products sold regarding the damage incurred by customers attributed to the Company’s products.

The provision has been determined based on management’s estimate of the likely settlement amount. The provision has been calculated using a discount rate 0.3%.

 

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