Honda 2007 Annual Report Download - page 83

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81
assessed that the difference between the total amounts of
equity in income on the consolidation basis and those on the
parent-only basis had been immaterial to the Company’s
consolidated financial statements under the income
statement approach. This misstatement resulted in an accu-
mulated understatement of equity in income of affiliates and
the carrying value of the investments in affiliates in the
consolidated financial statements.
3. The Company reclassified the residual tax effect of mini-
mum pension liabilities included in accumulated other com-
prehensive income during the year ended March 31, 2006,
which related to corporate tax rate changes in the past
based on the proportional allocation over the expiration of
unrecognized obligation. However, the residual tax effect
should have been reclassified only when the pension plan is
liquidated or dissolved under the portfolio approach. This
misstatement resulted in an understatement of accumulated
other comprehensive loss and corresponding overstatement
in income tax benefit.
The impact of the affected line items in the consolidated
balance sheet at the beginning of fiscal year ended March
31, 2007 is as follows.
Consolidated Balance Sheet
Yen (millions)
Cumulative Effect of
Prior Year Adjustment
Assets 123
as of April 1, 2006
Investments and advances:
Investments in and advances to affiliates (4,546) 36,274 — 31,728
Total investments and advances (4,546) 36,274 — 31,728
Property, plant and equipment, at cost:
Less accumulated depreciation and amortization 109,308 — — 109,308
Net property, plant and equipment (109,308) — — (109,308)
Other assets 43,722 — — 43,722
Total assets (70,132) 36,274 — (33,858)
Yen (millions)
Cumulative Effect of
Prior Year Adjustment
Liabilities, Minority Interests and Stockholders’ Equity 1 2 3
as of April 1, 2006
Other liabilities (1,818) 14,305 — 12,487
Total liabilities (1,818) 14,305 — 12,487
Minority interests in consolidated subsidiaries (1,854) — — (1,854)
Stockholders’ equity:
Retained earnings (66,460) 21,969 (18,149) (62,640)
Accumulated other comprehensive income (loss), net — — 18,149 18,149
Total stockholders’ equity (66,460) 21,969 — (44,491)
Total liabilities, minority interests and stockholders’ equity (70,132) 36,274 — (33,858)
(v) Reclassifications and Revisions of Classifications
Certain revisions for misclassifications and reclassifications
have been made to the prior years’ consolidated financial
statements to conform to the presentation used for the fiscal
year ended March 31, 2007. Detailed information is provided
in note 3.