Isuzu 2002 Annual Report Download - page 23

ISUZU MOTORS LIMITED ANNUAL REPORT 2002
21
Notes to Consolidated Financial Statements
1. Basis of Presenting the Financial Statements
The accompanying consolidated financial statements of
Isuzu Motors Limited (“the Company”) and its consoli-
dated subsidiaries have been prepared from the consoli-
dated financial statements filed with the Minister of
Finance as required by the Securities and Exchange Law
of Japan, in accordance with accounting principles and
practices generally accepted in Japan, which may differ
in some material respects from accounting principles
and practices generally accepted in countries and juris-
dictions other than Japan.
In addition, the notes to the consolidated financial
statements include information which is not required
under accounting principles generally accepted in Japan
but is presented herein as additional information.
In order to facilitate the comprehension of these con-
solidated financial statements by readers outside Japan,
certain reclassifications have been made to the consoli-
dated financial statements prepared for domestic pur-
poses and the relevant notes and statements of
shareholders’ equity and statements of cash flows have
been added.
The yen amounts are rounded down in millions.
Therefore, total or subtotal amounts do not necessarily
correspond with the aggregation of such account balances.
U.S. dollar amounts have been translated from Japa-
nese yen for convenience only at the rate of ¥133.25=
US$1, the approximate exchange rate prevailing on the
Tokyo Foreign Exchange Market on March 29, 2002. The
translations should not be construed as a representation
that Japanese yen have been or could be converted into
U.S. dollars at that rate. The U.S. dollar amounts are
then rounded down in thousands.
Certain reclassifications have been made in the 2001
and 2000 financial statements to conform to the presen-
tation for 2002.
2. Summary of Significant Accounting Policies
a) Consolidation
The consolidated financial statements include the
accounts of the Company and significant subsidiaries.
All significant inter-company balances and transactions
have been eliminated in consolidation.
Investments in the main unconsolidated subsidiary
and significant affiliated companies (15% to 50% owned)
are accounted for by the equity method.
The differences at the time of acquisition between the
cost and underlying net equity of investments in consoli-
dated subsidiaries and in unconsolidated subsidiaries
and affiliated companies accounted for under the equity
method are, as a rule, amortized over periods of five
years after appropriate adjustments.
b) Foreign Currency Translation
The financial statements of consolidated foreign subsid-
iaries are translated into yen in accordance with the
Financial Accounting Standard on Foreign Currency
Transactions in Japan until the fiscal year 2000.
The Company has adopted the revised Financial
Accounting Standard for Foreign Currency Transactions
in Japan effective from April 1, 2000.
Based on the change in accounting principle, foreign
currency transaction adjustments, which were recorded
in ”Assets” in the prior fiscal year, are recorded in ”Equity”
or ”Minority Interests” at March 31, 2001.
c) Securities
Marketable securities, investments in securities and
investments in unconsolidated subsidiaries and affiliates
were principally valued at cost using the moving-
average method until the fiscal year 2000.
Marketable securities classified as other securities are
carried at fair value with changes in unrealized holding
gain or loss, net of the applicable income taxes, included
directly in shareholders’ equity. Non-marketable securi-
ties classified as other securities are carried at cost. Cost
of securities sold is determined by the moving-average
method from the fiscal year 2002.
The Company adopted a new financial accounting
standard for financial instruments in Japan effective
from April 1, 2000. The new accounting standard for
financial instruments requires that securities be classi-
fied into three categories: trading, held-to-maturity, or
other securities from the fiscal year 2001, and other se-
curities with a market value are stated at fair value from
the fiscal year 2002.
The difference between the acquisition cost and the
carrying value of other securities, including unrealized
gain and loss, is recognized in “Unrealized holding loss
on securities.”
Unrealized holding loss on other securities, net of the
applicable income taxes, was charged, in the amount of
¥2,213 million ($16,609 thousand), to shareholders’
equity from the fiscal year 2002.
The effect of the adoption of the new standard on the
consolidated balance sheets was to decrease invest-
ments by ¥2,204 ($16,545 thousand), to increase
deferred tax assets by ¥4 million ($37 thousand) and to
increase minority interests by ¥13 million ($100 thou-
sand) at March 31, 2002.
d) Inventories
Inventories of the Company are valued at cost using the
periodic-average method. Inventories of consolidated
subsidiaries are principally valued at cost using the
specific-identification method.