Bridgestone 2004 Annual Report Download - page 39

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Financial Section
Notes to Consolidated Financial Statements
Bridgestone Corporation and Subsidiaries
NOTE 1—NATURE OF OPERATIONS
Bridgestone Corporation (the “Company”) and its subsidiaries (hereinafter referred to collectively as the “Companies”) engage in
developing, manufacturing and marketing tires and diversified products. The Companies market their products worldwide and operate
manufacturing plants in every principal market. Development activities take place primarily in Japan, the United States of America
(the “U.S.”) and Europe. Tire operations include automotive maintenance and repairs, retail business and credit card management, as
well as tire development, manufacturing and marketing. Diversified products include industrial products, chemical products, automo-
tive components, construction materials, electronic equipment, bicycles and sporting goods.
NOTE 2—BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in the Japanese
Securities and Exchange Law and its related accounting regulations, and in conformity with accounting principles generally accepted in
Japan, which are different in certain respects as to application and disclosure requirements of the accounting principles generally
accepted in the U.S.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidat-
ed financial statements issued domestically in order to present them in a form which is more familiar to readers outside Japan. In addi-
tion, certain reclassifications have been made in the 2003 and 2002 financial statements to comform to the classifications used in 2004.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which the Company is incorporated
and operates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers
outside Japan and have been made at the rate of ¥104.21 to $1, the approximate rate of exchange at December 31, 2004. Such transla-
tions should not be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any
other rate.
NOTE 3—SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Consolidation
The consolidated financial statements include the accounts of the Company and all of its subsidiaries in which the Company has effec-
tive control. All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized
profits included in assets resulting from transactions within the Companies are eliminated.
Investments in affiliated companies, those owned 20% to 50%, are accounted for under the equity method with appropriate adjust-
ments for intercompany profits and dividends. Equity in earnings of the affiliated companies is included in other income (expenses) in
the consolidated statements of income.
The number of consolidated subsidiaries and affiliated companies for 2004 and 2003 is summarized below:
2004 2003
Consolidated subsidiaries 435 424
Affiliated companies 202 213
(b) Cash equivalents
Cash equivalents are short-term investments that are readily convertible into cash and that are exposed to insignificant risk of changes
in value. Cash equivalents include highly liquid investments with original maturities of three months or less.
(c) Allowance for doubtful accounts
Allowance for doubtful accounts is established in amounts considered to be appropriate based on the Companies’ past credit loss
experience and an evaluation of potential losses in the receivables outstanding.