Notes to reconciliation of equity, profit or loss and other comprehensive income
A. Exchange differences on translating of foreign operations
Under IFRS 1, a first-time adopter may choose to deem the cumulative exchange differences on translating foreign operations as zero at the date of transition
to IFRS. We have chosen to apply this exemption and transferred all cumulative exchange differences on translating foreign operations into retained earnings at the date of transition to IFRS.
B. Deemed cost
Under IFRS 1, for property, plant and equipment,
a first-time adopter may use fair value as deemed cost at the date of transition to IFRS. We have applied this exemption and used fair value as the deemed cost at the date of transition to IFRS for certain item of property, plant and equipment.
C. Retirement benefit
Under U.S. GAAP, the prior service costs
and the actuarial gain and loss, resulted from defined benefit plan or unfunded retirement and severance plans which were incurred during the period but not recognized as the same periodic pension costs are recognized as accumulated other
comprehensive income by the amount after tax. The amounts recognized in accumulated other comprehensive income are subsequently recognized in profit or loss as a component of retirement benefit expenses over a period of time in the future.
Under IFRS, the prior service costs are expensed as incurred. The actuarial gain and loss are recognized in other comprehensive income by the amount after tax
and they are transferred from other components of equity to retained earnings directly without recording through profit or loss.
D. Income taxes
Under U.S. GAAP, all subsequent changes of deferred tax asset and liability due to a change in the tax rate, reassessment of recoverability are recognized in
profit or loss. Under IFRS, changes of deferred tax assets and liabilities on other comprehensive income are recognized in other comprehensive income.
In
addition, under U.S. GAAP, the temporary differences arising from the elimination of intercompany transaction are deferred as prepaid taxes using the sellers’ tax expenses. Under IFRS, above temporary differences are recognized as deferred tax
assets using the purchasers’ tax rates considering its recoverability.
E. Levies
Under U.S. GAAP, items qualified as levies such as property tax were recognized at the time of payment. Under IFRS, they were recognized on the date when an
obligation to pay arises.
F. Reclassification on the consolidated statement of financial position
Under the presentation requirement on IFRS15, refund liabilities included in “Less allowances for doubtful accounts and sales returns” was
reclassified into “Other current liabilities” on the consolidated statement of financial position. Under the presentation requirement on IAS 1 “Presentation of financial statements” (hereinafter, “IAS 1”),
“Investments accounted for using the equity method”, “Deferred tax assets” and “Provisions” were presented separately.
G.
Reclassifications on the consolidated statement of profit or loss
Under the presentation requirement on IAS1, “Share of net profit of investments
accounted for using the equity method” was presented separately on the consolidated statement of profit or loss.
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