Fujitsu 2000 Annual Report Download - page 26

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1. Significant Accounting Policies
(a) Basis of presenting consolidated financial statements
The accompanying consolidated financial statements of Fujitsu Limited (the “Company”) and its consolidated
subsidiaries (together, the “Group”) have been prepared in accordance with accounting principles and practices
generally accepted in Japan and the regulations under the Securities and Exchange Law of Japan. The accounting
principles and practices adopted by the consolidated subsidiaries outside Japan in their respective countries basically
conform to those adopted by the Company. In presenting the accompanying consolidated financial statements, certain
items have been reclassified for the convenience of readers outside Japan.
The differences between the accounting principles and practices adopted by the Group and those prescribed by
International Accounting Standards (“IAS”) are set forth in Note 2.
(b) Principles of consolidation
The consolidated financial statements include the accounts of the Company and, with minor exceptions, those of
its majority-owned subsidiaries.
Acquisitions of companies are accounted for by the purchase method. Goodwill represents the excess of the
acquisition cost over the fair value of the net assets of the acquired companies, and is being amortized on a straight-
line basis over periods not exceeding 20 years.
Investments in affiliates, with minor exceptions, are accounted for by the equity method.
(c) Cash equivalents
For the purpose of the statement of cash flows, the Group considers all short-term, highly liquid instruments with
a maturity of three months or less to be cash equivalents.
(d) Translation of foreign currency accounts
Current receivables and payables denominated in foreign currencies are translated into Japanese yen at the exchange
rates in effect at the respective balance sheet dates. Noncurrent monetary items denominated in foreign currencies are
translated into Japanese yen at their historical exchange rates.
The asset and liability accounts of the consolidated subsidiaries outside Japan are translated into Japanese yen at
the applicable fiscal year-end rates. Income and expense accounts are translated at the average rate during the year.
The resulting translation adjustments are recorded in assets as cumulative translation adjustments in conformity with
accounting principles generally accepted in Japan.
(e) Revenue recognition
Revenues from sales of communications products and computer systems are generally recognized upon acceptance by
the customers, while revenues from sales of personal computers, peripherals, other equipment and electronic devices
are recognized when the products are shipped.
(f) Marketable securities
Marketable securities included in short-term investments, and investments and long-term loans are stated at the lower
of cost or market, cost being determined by the moving average method.
(g) Allowance for doubtful accounts
The allowance for doubtful accounts is provided at an amount deemed sufficient to cover estimated future losses.
(h) Inventories
Finished goods are mainly stated at cost determined by the moving average method.
Work in process is mainly stated at cost determined by the specific identification method and the average cost
method.
Raw materials are mainly stated at cost determined by the moving average method and the most recent purchase
price method.
Notes to Consolidated Financial Statements