The Group has a share option plan as an equity-settled share- based payment for directors and corporate officers. Share  options are measured at the grant date fair value, and the fair  value of share options is calculated using the binomial model. The fair value of share options determined at the grant date  is expensed over the vesting period with a corresponding  increase in equity by taking into account the number of share  options that will eventually vest. The Group operates defined benefit and defined contribution  retirement plans for its employees. Net defined benefit assets or liabilities are calculated as the  present value of the defined benefit obligation less the fair  value of plan assets and they are recognised in the consoli- dated statements of financial position as assets or liabilities.  The defined benefit obligation is calculated by using the pro- jected unit credit method. The present value of the defined  benefit obligation is calculated by the expected future pay- ments using discount rate. The discount rate is determined by  reference to market yield on high-quality corporate bonds  having maturity terms consistent with the estimated term of  the related pension obligations. Service cost and net interest expense (income) on the net  defined benefit liabilities (assets) are recognised in profit or loss. Actuarial gains and losses, the return on plan assets,  excluding amounts included in net interest, and any change in  the effect of the asset ceiling are recognised immediately in  other comprehensive income under “Remeasurements of  defined benefit plans”, and transferred from other components  of equity to retained earnings immediately. Contributions paid for defined contribution plans are expensed  in the period in which the employees provide the related service. Short-term employee benefits are expensed when the related  service is provided. Bonus accrual is recognised as a liability  when the Group has present legal or constructive obligations  resulting from past service rendered by the employees and  reliable estimates of the obligations can be made. When the Company reacquires its own ordinary shares, the  amount of the consideration paid including transaction costs is  deducted from equity. When the Company sells treasury  shares, the difference between the carrying amount and the  consideration received from the sale is recognised in equity. Proceeds from the issuance of ordinary shares by the Company  are included in share capital and capital surplus. Transaction  costs of issuing ordinary shares (net of tax) are deducted from  capital surplus. Non-current assets or disposal groups are classified as  “Assets held for sale” if their carrying amounts will be recovered  principally through a sale transaction rather than through con- tinuing use. To be classified as assets held for sale, the asset  must be available for immediate sale in its present condition,  and the sale must be highly probable. Specifically, manage- ment of the Group must have a firm commitment to execute  the plan to sell the asset and the sale is expected to be com- pleted within one year from the date of classification, as a  general rule. Assets held for sale are measured at the lower of  their carrying amounts and fair values less costs to sell, and  they are not depreciated or amortised while they are classified  as held for sale. Inventories are measured at the lower of cost and net realisable  value. The cost of inventories includes costs of purchase, costs  of conversion and all other costs incurred in bringing the inven- tories to their present location and condition. Net realisable  value is calculated as the estimated selling price in the ordinary  course of business less the estimated costs of completion and  estimated costs necessary to sell. Cost of inventories is  calculated mainly using the first-in, first-out (FIFO) method. Cash and cash equivalents comprise cash on hand, demand  deposits, and highly liquid short-term investments with maturi- ties of three months or less from the date of acquisition which  are subject to an insignificant risk of changes in value. Financial assets and financial liabilities arising from derivatives  are classified as either financial assets at FVTPL or financial  liabilities at FVTPL. (19) Share-based payment (20) Employee benefits (i) Retirement benefits (a) Defined benefit plans (16) Inventories (15) Cash and cash equivalents (17) Assets held for sale (i) Ordinary shares (b) Defined contribution plans (ii) Short-term employee benefits (ii) Treasury shares (18) Equity Financial Section 115 Annual Report 2014 _  Astellas Pharma Inc. 