Konica Minolta 2001 Annual Report Download - page 27

Konica Corporation/ Annual Report 200 1
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KONICA CORPORATION AND CONSOLIDATED SUBSIDIARIES
For the fiscal years ended Marc h 3 1 , 20 0 1 and 200 0
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1 . Basis of Pr esenting Financial Statements
The accompanying c onsolidated financial statements have been
prepared based on the accounts maintained by Konic a Corporation ( the
“Company”) and its c onsolidated subsidiaries in accordance with the
provisions set forth in the Japanese Commercial Code ( the “Code”) and
the Securities and Exchange Law, and in c onformity with accounting
principles and practic es generally accepted in Japan, which are different
in certain respects from the applic ation and disclosure requirements of
International Ac counting Standards.
Certain items presented in the consolidated financial statements
submitted to the Direc tor of Kanto Finance Bureau in Japan have been
rec lassified in these ac counts for the convenienc e of readers outside Japan.
Certain amounts previously reported have been rec lassified to
confirm to the current year classific ations.
As permitted under the Securities and Exchange Law of Japan,
amounts of less than one million yen have been omitted. As a result, the
totals shown in the accompanying c onsolidated financial statements
( both in yen and in dollars) do not nec essarily agree with the sums of
the individual amounts.
The consolidated financ ial statements are not intended to present
the consolidated financial position, results of operations and cash flows
in accordance with accounting princ iples and practices generally
accepted in c ountries and jurisdic tions other than Japan.
The consolidated statements of cash flows have been required to be
prepared with effect for the year ended March 3 1 , 2 0 0 0 in accordance
with new ac counting standards.
2 . Summary of Significant Accounting Policies
( a) Principles of Consolidation
The consolidated financ ial statements include the accounts of the
Company and, with c ertain exceptions which are not material, those of
its subsidiaries in which it has control. All significant interc ompany
transactions and acc ounts and unrealized profits are eliminated in
consolidation.
Investments in unconsolidated subsidiaries and significant affiliates
are accounted for by the equity method. Investments in insignific ant
affiliates are stated at cost.
The excess of cost over the underlying investments in subsidiaries is
rec ognized as goodwill and is amortized on a straight-line basis over a
five-year period.
( b) Translation of Foreign Currencies
Translation of For eign Currency Transactions
Until the year ended March 31, 2000, revenue and cost or expense items
arising from the transac tions of the Company denominated in foreign
currenc ies had been translated into Japanese yen at relevant exchange
rates prevailing at the time of transactions ( “historic al rates”) . All assets
and liabilities denominated in foreign currencies ( including short-term
monetary items) had been translated into yen at the historical rates.
Effective from the year ended March 3 1 , 2 0 0 1 , the Company and its
subsidiaries adopted the new Japanese ac counting standard for foreign
currenc y translation, which is effective for periods beginning on or after
April 1, 2 0 0 0 . Under the new standard, all monetary assets and liabilities
denominated in foreign c urrencies, whether long-term or short-term,
are translated into Japanese yen at the exchange rates prevailing at the
balance sheet date. Resulting gains and losses are included in net profit
or loss for the period. As a result of adopting the new method, income
before income taxes has increased by ¥ 7 1 4 million( US$5,7 6 3 thousand)
as compared with the amounts which would have been reported if the
previous standard had been applied consistently.
Translation of For eign Currency Financial Statements
The translations of foreign c urrency financial statements of overseas
consolidated subsidiaries and affiliates into Japanese yen are made by
applying the exc hange rates prevailing at the balance sheet dates for
balance sheet items, exc ept that the c ommon stoc k, additional paid-in
capital and retained earnings accounts are translated at the historical
rates and the statements of inc ome and retained earnings are translated
at average exchange rates.
Until the year ended March 31, 2000, the foreign currency
translation adjustments had been disc losed on the part of Assets or
Liabilities, and the new standards also c hanged the method of disclosure
on “foreign c urrency translation adjustments.”
For the c omparatively, the Foreign currency translation adjustments
March 3 1 , 2000 was rec lassified to the part of the shareholders’ equity.
( c) Cash and Cash Equivalents
Cash and c ash equivalents in the consolidated statements of cash flows
are c omposed of cash on hand, bank deposits able to be withdrawn on
demand and short-term investments with an original maturity of three
months or less and which represent a minor risk of fluctuation in value.
( d) Inventories
Inventories are valued principally on an average-c ost basis.
( e) Property, Plant and Equipment Depreciation
Depreciation of property, plant and equipment for the Company and
domestic consolidated subsidiaries is computed using the dec lining
balance method except for depreciation of buildings acquired after April
1 , 1 9 9 8 , based on the estimated useful lives of assets.
Depreciation of buildings ac quired after April 1 , 1 9 9 8 is computed
using the straight-line method. Depreciation of foreign subsidiaries is
computed using the straight-line method.
Ordinary maintenanc e and repairs are c harged to income as
incurred. Major replacements and improvements are capitalized. When
properties are retired or otherwise disposed of, the property and related
accumulated depreciation acc ounts are relieved of the applicable
amounts and any differenc es are c harged or credited to income.
( f) Income Taxes
Income taxes of the Company and its domestic subsidiaries consist of
corporate income taxes, loc al inhabitants taxes and enterprise taxes.
Deferred income taxes are provided for in respec t of temporary
differences between the tax basis of assets and liabilities and those as
reported in the consolidated financial statements.