Sumitomo Dainippon Pharma Annual Report 2017

c. Marketable and Investment SecuritiesAll marketable and investment securities are available-for-sale securities, which are not classied as either trading securities or held-to-maturity debt securities. Available-for-sale securities are reported at fair value with unrealized gains and losses net of applicable taxes shown as a separate component of net assets. Non-marketable available-for-sale securities are stated at cost, determined using the moving average method. If the fair value of investment securities declines below cost and the decline is material and other than temporary, the carrying value is impaired to net realizable value by a charge to income.d. InventoriesInventories are stated at the lower of weighted-average cost or net realizable value. Certain overseas consolidated subsidiaries use the FIFO (rst-in, rst-out) costing method for which inventories are stated at the lower of cost or net realizable value.e. Property, Plant and EquipmentProperty, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation of all tangible xed assets is computed using the straight-line method over the estimated useful life of the asset. Ranges of useful lives used in the computation of depreciation are as follows: Buildings and structures 3–60 years Machinery and equipment 2–17 yearsf. Intangible AssetsIntangible assets are stated at cost less accumulated amortization, which is computed using the straight-line method over the estimated useful lives from the date they are available for use.g. GoodwillGoodwill represents the excess of the purchase price over the fair value of the net assets of businesses acquired and is amortized using the straight-line method over 20 years.h. Impairment of Long-Lived AssetsLong-lived assets presented as property, plant and equipment, and intangible assets on the consolidated balance sheets are carried at cost less depreciation or amortization and are reviewed for impairment whenever events or changes in circumstances indicate that the carrying amount of an asset or asset group may not be recoverable. An impairment loss is recognized if the carrying amount exceeds the sum of the undiscounted future cash ows expected to result from the continued use and eventual disposition of the asset or asset group. The impairment loss is measured as the amount by which the carrying amount exceeds its recoverable amount. The recoverable amount of an asset is the greater of its discounted cash ows and its fair value less cost to sell.i. Retirement and Severance BenetsUpon retirement or termination of employment, employees are normally entitled to lump-sum and/or annuity payments based on their rate of payment at the time of retirement or termination and length of service. The Group has a lump-sum plan, a dened benet pension plan and a dened contribution plan for employees. The asset and liability for retirement benet is recognized based on projected benet obligations and the fair value of plan assets at the balance sheet date. The Company and certain consolidated subsidiaries have retirement benets plans that primarily consist of a lump-sum payment plan, dened benet plans, and a dened contribution pension program. The estimated amount of all retirement benet to be paid at future retirement dates is allocated to periods of service based on the plan’s benet formula. Past service costs are amortized using the Notes to Consolidated Financial StatementsSumitomo Dainippon Pharma Co., Ltd. and Consolidated SubsidiariesYears Ended March 31, 2017 and 2016Financial SectionSumitomo Dainippon Pharma Co., Ltd. Annual Report 201773

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