Hyundai 2001 Annual Report Download - page 44

December 31, 2001 and 2000
Beginning in 1997, Korea and other countries in the Asia Pacific region experienced a severe contraction in substantially all
aspects of their economies. This situation is commonly referred to as the 1997 Asian Financial Crisis. In response to this
situation, the Korean government and the private sector began implementing structural reforms to historical business practices.
The Korean economy continues to experience difficulties, particularly in the areas of restructuring private enterprises and
reforming the banking industry. The Korean government continues to apply pressure to Korean companies to restructure into
more efficient and profitable firms. The banking industry is currently undergoing consolidation and uncertainty exists with
regard to the continued availability of financing. The Company may be either directly or indirectly affected by the situation
described above. The accompanying non-consolidated financial statements reflect management’s current assessment of the
impact to date of the economic situation on the financial position of the Company. Actual results may differ materially from
management’s current assessment.
2. Summary of Significant Accounting Policies
The significant accounting policies followed by the Company in the preparation of its non-consolidated financial statements are
summarized below.
Basis of Financial Statement Presentation
The Company maintains its official accounting records in Korean won and prepares statutory non-consolidated financial
statements in the Korean language (Hangul) in conformity with the accounting principles generally accepted in the Republic of
Korea. Certain accounting principles applied by the Company that conform with financial accounting standards and accounting
principles in the Republic of Korea may not conform with generally accepted accounting principles in other countries.
Accordingly, these non-consolidated financial statements are intended for use by those who are informed about Korean
accounting principles and practices. The accompanying non-consolidated financial statements have been condensed,
restructured, and translated into English (with certain expanded descriptions) from the Korean language non-consolidated
financial statements. Certain information included in the statutory Korean language non-consolidated financial statements, but
not required for a fair presentation of the Company's financial position, results of operations or cash flows, is not presented in
the accompanying non-consolidated financial statements.
The U.S. dollar amounts presented in these non-consolidated financial statements were computed by translating the Korean
won into U.S. dollars based on the Bank of Korea Basic Rate of "1,326.1 to US$1.00 at December 31, 2001, solely for the
convenience of the reader. This convenience translation into US dollars should not be construed as a representation that the
Korean won amounts have been, could have been, or could in the future be, converted at this or any other rate of exchange.
The significant accounting policies followed by the Company in the preparation of its non-consolidated financial statements are
summarized below.
Revenue Recognition
Revenue, including long-term installment sales, is recognized at the time of shipping motor vehicles and parts. Interest income
arising from long-term installment sales is recognized using the level yield method.
Valuation of Marketable Securities
Marketable securities are recorded at purchase price plus incidental costs. However, if the fair value of marketable securities
differs from the book value determined by weighted average method, the securities are stated at fair value and the valuation
gain or loss is reflected in current operations.
Allowance for Doubtful Accounts
The Company provides an allowance for doubtful accounts based on management’s estimate of the collectibility of receivables.
N OTES TO N ON -C ONSOLIDATED F INANCIAL S TATEMENTS
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2001 Annual Report Hyundai Motor Company