Notes to Consolidated Financial Statements2

HOKURIKU ELECTRIC POWER COMPANY AND CONSOLIDATED SUBSIDIARIES
March 31, 2016

2. Change in Accounting Policies

(Application of Accounting Standard and other regulations for Business Combination)
 The Company has applied the "Accounting Standard for Business Combination" Accounting Standards Board of Japan Statement No.21, September 13, 2013, the "Accounting Standard for Consolidated Financial Statements" (Accounting Standards Board of Japan Statement No.22, September 13, 2013), the "Accounting Standard for Business Divestitures" (Accounting Standards Board of Japan Statement No.7, September 13, 2013), effective from the current consolidated fiscal year. Under the adopted accounting standards, the difference associated with the changes in the Company's ownership interest in subsidiaries in the case of subsidiaries under ongoing control of the Company recorded as capital surplus, and acquisition-related costs are recorded as expense for the consolidated fiscal year in which they are incurred. Also, as for business combination occurred on or after the beginning of the current consolidated fiscal year, the accounting method was changed to reflect the adjustments of the provisional allocation of acquisition costs for a business combination shall be reflected in the consolidated financial statements for the fiscal year in which the business combination occurred. In addition, the presentation for "Net income" and other related items was changed and "Minority interests" was changed to "Non-controlling interests." The consolidated financial statements for the previous consolidated fiscal year have been reclassified to reflect these changes in presentation.
 In consolidated cash flow statement for the current consolidated fiscal year, cash flows proceeds from purchase or sales of shares of subsidiaries resulting in scope of consolidation are mentioned in the category "Cash flows from financing activities."
 In accordance with the transitional treatment set forth in Article 58-2 (4) of the Accounting Standard for Business Combination, Article 44-5 (4) of the Accounting Standard for Consolidated Financial Statements and Article 57-4 (4) of Accounting Standard for Business Divestiture, these standards have been applying prospectively from the beginning of the current consolidated fiscal year.
 For reference, the effect of these changes is insignificant.


3. Accounting Standards Issued but Not yet Adopted

"Implementation Guidance on Recoverability of Deferred Tax Assets"
(Accounting Standards Board of Japan Guidance No. 26, March 28, 2016)
(1) Overview
 When transferring authority on the Japanese Institute of Certified Public Accountants' practical guide lines on accounting related to tax-effect accounting and practical guidelines for auditing (sections related to accounting treatment) to the Accounting Standards Board of Japan, the "Implementation Guidance on Recoverability of Deferred Tax Assets" groups companies into five categories with respect to guidelines related to the recoverability of deferred tax assets, principally those provided in the Japanese Institute of Certified Public Accountants Auditing Committee Report No.66, "Audit Treatment for Judgment of Recoverability of Deferred Tax Assets." The guidance basically applies the frame work for handling estimates of the amount of deferred tax assets recorded thereby providing guidelines for the application of the "Accounting Standards for Tax-Effect Accounting" (Business Accounting Council) for the recoverability of deferred tax assets.
(2) Application date
 The guidance will be applied from the beginning of the fiscal year commencing on or after April 1, 2016.
(3) Effect of application of the accounting standard and others
 At the time of preparation of the consolidated financial statements, there is no effect on such financial statements.


4. U.S. Dollar Amounts

 The accompanying consolidated financial statements are expressed in yen, and solely for the convenience of the reader, have been translated into U.S. dollars at the rate of ¥112.69 = U.S.$1, the approximate rate of exchange prevailing at March 31, 2016. The inclusion of such amounts is not intended to imply that yen have been or could be readily converted, realized or settled in U.S. dollars at that or any other rate.

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