Casio 2014 Annual Report Download - page 24

1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of CASIO COMPUTER CO., LTD. (“the Company”) and
its consolidated subsidiaries have been prepared in accordance with the provisions set forth in the Japanese
Financial Instruments and Exchange Law and its related accounting regulations, and in conformity with
accounting principles generally accepted in Japan (“Japanese GAAP”), which are different in certain
respects as to application and disclosure requirements from International Financial Reporting Standards.
The accompanying consolidated financial statements have been restructured and translated into English
(with certain expanded disclosure) from the consolidated financial statements of the Company prepared in
accordance with Japanese GAAP and filed with the appropriate Local Finance Bureau of the Ministry of
Finance as required by the Financial Instruments and Exchange Law. Certain supplementary information
included in the statutory Japanese language consolidated financial statements, but not required for fair
presentation, is not presented in the accompanying consolidated financial statements.
The translation of the Japanese yen amounts into U.S. dollars is included solely for the convenience of
readers outside Japan, using the prevailing exchange rate at March 31, 2014, which was ¥103 to U.S.$1. The
convenience translation should not be construed as a representation that the Japanese yen amounts have been,
could have been, or could in the future be, converted into U.S. dollars at this or any other rate of exchange.
2. Significant Accounting Policies
Consolidation
The accompanying consolidated financial statements include the accounts of the Company and signifi-
cant subsidiaries (together with the Company, the “Group”) which the Company controls through major-
ity voting rights or existence of certain conditions. Shares of associates of which the Company has the
ability to exercise significant influence over operating and financial policies are accounted for using the
equity method.
In the elimination of investments in subsidiaries, the portion of assets and liabilities of a subsidiary attrib-
utable to the subsidiary’s shares acquired by the Company are recorded based on the fair value as of the
respective dates when such shares are acquired. The amounts of assets and liabilities attributable to minor-
ity shareholders of the subsidiary are determined using the financial statements of the subsidiary.
Material intercompany balances, transactions and profits have been eliminated in consolidation.
The difference between the cost and underlying fair value of the net assets of investments in subsidiaries
at acquisition is included in other assets and is amortized on a straight-line basis over five years.
Cash flow statements
In preparing the consolidated statements of cash flows, cash on hand, readily available deposits and short-
term highly liquid investments with maturities not exceeding three months at the time of purchase are
considered to be cash and cash equivalents.
Foreign currency translation
All monetary assets and liabilities denominated in foreign currencies are translated at the current exchange
rates at the balance sheet date, and the translation gains and losses are credited or charged to income (loss).
Assets and liabilities of overseas subsidiaries are translated into yen at the current exchange rate at the
balance sheet date while their revenue and expenses are translated at the average exchange rate for the period.
Differences arising from such translation are included in net assets as foreign currency translation adjustment.
Securities and investment securities
Debt securities designated as held-to-maturity are carried at amortized cost using the straight-line method.
Other securities, except for trading securities (“available-for-sale securities”) for which fair value is readily
determinable, are stated at fair value as of the end of the period with unrealized gains and losses, net of
applicable deferred tax assets or liabilities, not reflected in earnings but directly reported as a separate
component under net assets. The cost of such securities sold is determined primarily by the moving-average
method. Available-for-sale securities for which fair value is not readily determinable are stated primarily at
moving-average cost.
Derivatives and hedge accounting
The accounting standard for financial instruments requires companies to state derivative financial instru-
ments at fair value and to recognize changes in the fair value as gains or losses unless derivative financial
instruments are used for hedging purposes.
If derivative financial instruments are used as hedges and meet certain hedging criteria, the Group defers
recognition of gains or losses resulting from changes in the fair value of derivative financial instruments until
the related losses or gains on the hedged items are recognized.
Also, if interest rate swap contracts are used as hedges and meet certain hedging criteria, the net
amount to be paid or received under the interest rate swaps is added to or deducted from the interest on
the assets or liabilities for which the swap contract is executed.
The Group uses forward foreign currency contracts and interest rate swaps as derivative financial instruments
primarily for the purpose of mitigating future risks of fluctuations of foreign currency exchange rates with respect
to foreign currency assets and liabilities and of interest rate changes with respect to cash management.
Forward foreign currency and interest rate swap contracts are subject to risks of foreign currency
exchange rate changes and interest rate changes, respectively.
The derivative transactions are executed and managed by the Company’s Finance Department in
accordance with the established policies and within the specified limits on the amounts of derivative
transactions allowed.
Allowance for doubtful accounts
The allowance for doubtful accounts is provided at an amount sufficient to cover probable losses on the
collection of receivables.
Notes to Consolidated Financial Statements
Years ended March 31, 2014 and 2013 Casio Computer Co., Ltd. and Consolidated Subsidiaries
Profile / Contents CASIO’s StrengthHistory To Our Stakeholders At a Glance Special Feature CSRCorporate Governance
PAGE 23
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