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066_
Kia Motors Annual Report 2007
(1) Summary of Significant Accounting Policies and Basis of Presenting Financial Statements
(a) Organization and Description of the Business
Kia Motors Corporation (the “Company”), one of the leading motor vehicle manufacturers in Korea, was established on December 1944 under the laws of the
Republic of Korea to manufacture and sell a range of passenger cars, recreational vehicles and other commercial vehicles in the domestic and international markets.
The Company owns and operates three principal automobile production sites: the Sohari factory, the Hwasung factory and the Kwangju factory.
The shares of the Company have been listed on the Korea Exchange since 1973. As of December 31, 2007, the Company’s largest shareholder is Hyundai Motor
Company, which holds 38.7 percent of the Company’s stock.
Major overseas subsidiaries for international sales are Kia Motors America, Inc. (KMA) in the United States, Kia Canada, Inc. (KCI) in Canada, Kia Motors Deutschland
GmbH (KMD) and Kia Motors Europe GmbH (KME) in Germany. Also, the Company established an overseas assembly subsidiary in Zilina, Slovak Republic on
February 26, 2004 to provide production capacity in Europe. The construction of the plant in Zilina was completed and the production started from the end of 2007.
(b) Basis of Presenting Financial Statements
The Company maintains its accounting records in Korean Won and prepares statutory non-consolidated financial statements in the Korean language in conformity
with 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 solely for use by only those who are informed about Korean accounting principles and
practices. The accompanying non-consolidated financial statements have been condensed, restructured and translated into English from the Korean language
non-consolidated financial statements.
Certain information included in the 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 accompanying non-consolidated financial statements include only the accounts of the Company, and do not consolidate the accounts of any of its
subsidiaries. Instead, these subsidiaries are accounted for under the equity method of accounting (see note 7).
Effective January 1, 2007, the Company adopted Statements of Korea Accounting Standards (“SKAS”) No. 11 Discontinued Operations, No. 21 Preparation and
Presentation of Financial Statements, No. 22 Share-Based Payments and No. 23 Earnings per Share. Certain accounts of the prior year’s non-consolidated financial
statements have been reclassified to conform to the current year’s presentation. These reclassifications have not resulted in any change to reported net income or
stockholders’ equity.
According to SKAS No. 21, Preparation and Presentation of Financial Statements, a statement of changes in equity has been included in the non-consolidated
financial statements for the year ended December 31, 2007and the capital adjustment account as of December 31, 2006 has been reclassified into capital
adjustments and accumulated other comprehensive income. In accordance with the transition requirements of SKAS No. 21, only the current year's non-
consolidated statement of changes in equity is required to be presented in the financial statements. A non-consolidated statement of comprehensive income has
been included in the notes to the financial statements.
(c) Cash Equivalents
The Company considers short-term financial instruments with maturities of three months or less at the acquisition date to be cash equivalents.
(d) Deposits
Deposits are held for cash management purposes. Short-term deposits, (including MMDAs, time deposits, installment savings deposits and restricted bank
deposits), are those maturing within one year and long-term deposits are those maturing after one year.
December 31, 2007 and 2006
Notes to Non-Consolidated Financial Statements