 applicable taxes, reported in a separate component of equity. Non-marketable available-for-sale securities are stated at cost  determined by the moving-average method. For other than tempo- rary declines in fair value, investment securities are reduced to net  realizable value by a charge to income. h. Property, Plant and Equipment —Property, plant and equip- ment are stated at cost. Depreciation of property, plant and equip- ment of the Company and its consolidated domestic subsidiaries is  computed substantially by the declining-balance method at rates  based on the estimated useful lives of the assets, while the straight- line method is applied to buildings acquired after April 1, 1998. The  depreciation of property, plant and equipment of foreign consoli- dated subsidiaries is computed on the straight-line method over  the estimated useful lives of the assets. The range of useful lives is  principally from 8 to 50 years for buildings and structures, and from  7 to 12 years for machinery and equipment. Regarding the leased assets related to the finance leases for  which ownership is not transferred, the useful lives of such assets  are deemed to be the lease periods, and depreciation is calculated  by the straight line depreciation method, depreciating the residual  value of such assets to zero over the useful life. For finance leases  for which ownership is not transferred to the lessee and the lease  transaction was begun prior to March 31, 2008, the accounting  treatment follows the method applicable to ordinary rental  transactions. i. Long-lived Assets —The Group reviews its long-lived assets for  impairment whenever events or changes in circumstances indi- cate the carrying amount of an asset or asset group may not be  recoverable. An impairment loss would be recognized if the carry- ing amount of an asset or asset group exceeds the sum of the  undiscounted future cash flows expected to result from the con- tinued use and eventual disposition of the asset or asset group.  The impairment loss would be measured as the amount by which  the carrying amount of the asset exceeds its recoverable amount,  which is the higher of the discounted cash flows from the contin- ued use and eventual disposition of the asset or the net selling  price at disposition. j. Allowance for Loss on Factory Restructurings —In order to  prepare against loss on factory closures, which were determined as  a part of the restructuring of the Group companies’ factories, the  Company appropriated an amount deemed to be reasonable in  2009 and 2010. k. Bond Issue Costs —Bond issue costs are charged to income  as incurred. l. Employees’ Retirement Benefits —The Group has non-  contributory and contributory funded pension plans. The Group  accounted for the liability for employees’ retirement benefits based  on the projected benefit obligations and plan assets at the balance  sheet date. Effective April 1, 2009, the Group applied ASBJ Statement No.  19, “Partial Amendments to Accounting Standard for Retirement  Benefit (Part 3).” The adoption of the new accounting standard for  the year ended March 31, 2010 had no effect on the consolidated  financial statements. p. Construction Contracts —In December 2007, the ASBJ issued  ASBJ Statement No. 15, “Accounting Standard for Construction  Contracts,” and ASBJ Guidance No. 18, “Guidance on Accounting  Standard for Construction Contracts.” Under the previous   Japanese GAAP, either the completed-contract method or the  percentage-of-completion method was permitted to account for  construction contracts. Under this new accounting standard, the  construction revenue and construction costs should be recognized  by the percentage-of-completion method, if the outcome of a con- struction contract can be estimated reliably. When total construc- tion revenue, total construction costs and the stage of completion  of the contract at the balance sheet date can be reliably measured,  the outcome of a construction contract can be estimated reliably. If  the outcome of a construction contract cannot be reliably esti- mated, the completed-contract method should be applied. When it  is probable that the total construction costs will exceed total con- struction revenue, an estimated loss on the contract should be  immediately recognized by providing for a loss on construction  contracts. This standard is applicable to construction contracts and  software development contracts, and effective for fiscal years  beginning on or after April 1, 2009. The Group applied the new  accounting standard effective April 1, 2009. The effect of this  change was to increase sales by ¥4,176 million ($44,881   thousand), and operating income and income before income taxes  and minority interests by ¥550 million ($5,916 thousand) for the  year ended March 31, 2010. All other leases are accounted for as operating leases. The Group applied the revised accounting standard effective  April 1, 2008. In addition, the Group accounted for leases which  existed at the transition date and do not transfer ownership of the  leased property to the lessee as operating lease transactions. Under the previous accounting standard, finance leases that  were deemed to transfer ownership of the leased property to the  lessee were to be capitalized. However, other finance leases were  permitted to be accounted for as operating lease transactions if  certain “as if capitalized” information is disclosed in the notes to the  lessee’s financial statements. The revised accounting standard  requires that all finance lease transactions should be capitalized to  recognize lease assets and lease obligations in the balance sheet.  In addition, the revised accounting standard permits leases which  existed at the transition date and do not transfer ownership of the  leased property to the lessee to be accounted for as operating  lease transactions. o. Leases —In March 2007, the ASBJ issued ASBJ Statement No.  13, “Accounting Standard for Lease Transactions,” which revised  the previous accounting standard for lease transactions issued in  June 1993. The revised accounting standard for lease transactions  is effective for fiscal years beginning on or after April 1, 2008 with  early adoption permitted for fiscal years beginning on or after April  1, 2007. m. Retirement Allowances for Directors and Corporate   Auditors —Retirement allowances for directors and corporate  auditors of certain consolidated subsidiaries are recorded to state  the liability at the amount that would be required if all directors and  corporate auditors retired at each balance sheet date. n. Research and Development Costs —Research and develop- ment costs are charged to income as incurred. JS Group Corporation Annual Report 2010 64