This excerpt taken from the KNM 6-K filed Jan 13, 2006.
Generally, allowance for doubtful accounts is calculated based on the actual ratio of bad debt losses incurred. For specific accounts with higher possibility of bad debt loss, the allowance is determined by independent judgment.
Provided for the payment of bonuses to employees by the estimated amount of payment.
Allowance for retirement benefits to be paid to employees as of balance sheet date is calculated based on the estimated amount of the projected benefit obligation and the plan assets at the fiscal year-end.
Unrecognized actuarial net gain or loss will be amortized from the following fiscal year within the average remaining service period of 12 years on a straight-line basis.
Required amount for retirement benefits to be paid to directors as of balance sheet date is reserved as liability. This allowance is regarded as liability stipulated in Article 43 of the Enforcement Regulations of the Commercial Code of Japan.
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