Konica Minolta 2002 Annual Report Download - page 27
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Please find page 27 of the 2002 Konica Minolta annual report below. You can navigate through the pages in the report by either clicking on the pages listed below, or by using the keyword search tool below to find specific information within the annual report.25 Konica 2002NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
KONICA CORPORATION AND CONSOLIDATED SUBSIDIARIES
For the fiscal years ended March 31, 2002 and 2001
1. Basis of Presenting Financial Statements
The accompanying consolidated financial statements have been
prepared based on the accounts maintained by Konica Corporation
(the “Company”) and its consolidated subsidiaries in accordance
with the provisions set forth in the Japanese Commercial Code (the
“Code”) and the Securities and Exchange Law, and in conformity
with accounting principles and practices generally accepted in
Japan, which are different in certain respects from the application
and disclosure requirements of International Accounting
Standards.
Certain items presented in the consolidated financial state-
ments submitted to the Director of Kanto Finance Bureau in Japan
have been reclassified in these accounts for the convenience of
readers outside Japan.
Certain amounts previously reported have been reclassified to
conform to the current year classifications.
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 consolidated financial
statements (both in yen and in dollars) do not necessarily agree
with the sums of the individual amounts.
The consolidated financial statements are not intended to
present the consolidated financial position, results of operations
and cash flows in accordance with accounting principles and prac-
tices generally accepted in countries and jurisdictions other than
Japan.
2. Summary of Significant Accounting Policies
(a) Principles of Consolidation
The consolidated financial statements include the accounts of the
Company and, with certain exceptions which are not material,
those of its subsidiaries in which it has control. All significant
intercompany transactions and accounts and unrealized profits are
eliminated in consolidation.
Investments in unconsolidated subsidiaries and significant affil-
iates are accounted for by the equity method. Investments in
insignificant affiliates are stated at cost.
The excess of cost over the underlying investments in sub-
sidiaries is recognized as goodwill and is amortized on a straight-
line basis over a five-year period.
(b) Translation of Foreign Currencies
Translation of Foreign Currency Transactions
All monetary assets and liabilities denominated in foreign curren-
cies, whether long-term or short-term, are translated into Japanese
yen at the exchange rates prevailing at the balance sheet date and
revenues and costs are translated using average exchange rate for
the period.
Translation of Foreign Currency Financial Statements
The translations of foreign currency financial statements of over-
seas consolidated subsidiaries and affiliates into Japanese yen are
made by applying the exchange rates prevailing at the balance
sheet dates for balance sheet items, except that the common stock,
additional paid-in capital and retained earnings accounts are trans-
lated at the historical rates and the statements of income and
retained earnings are translated at average exchange rates.
(c) Cash and Cash Equivalents
Cash and cash equivalents in the consolidated statements of cash
flows are composed of cash on hand, bank deposits able to be with-
drawn 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-cost basis.
(e) Property, Plant and Equipment Depreciation
Depreciation of property, plant and equipment for the Company
and domestic consolidated subsidiaries is computed using the
declining balance method except for depreciation of buildings
acquired after April 1, 1998, based on the estimated useful lives of
assets.
Depreciation of buildings acquired after April 1, 1998 is com-
puted using the straight-line method. Depreciation of foreign sub-
sidiaries is computed using the straight-line method.
Ordinary maintenance and repairs are charged to income as
incurred. Major replacements and improvements are capitalized.
When properties are retired or otherwise disposed of, the property
and related accumulated depreciation accounts are relieved of the
applicable amounts and any differences are charged or credited to
income.
(f) Income Taxes
Income taxes of the Company and its domestic subsidiaries consist
of corporate income taxes, local inhabitants’ taxes and enterprise
taxes. Deferred income taxes are provided for in respect of tempo-
rary differences between the tax basis of assets and liabilities and
those as reported in the consolidated financial statements.
(g) Research and Development Expenses
Expenses for research and development activities are charged to
income as incurred.
(h) Financial Instruments
Derivatives
All derivatives are stated at fair value, with changes in fair value
included in net profit or loss for the period in which they arise,
except for derivatives that are designated as “hedging instruments”
(see Hedge Accounting below).
Securities
Securities held by the Company and its subsidiaries are classified
into two categories:
Investments of the Company in equity securities issued by
unconsolidated subsidiaries and affiliates are accounted for by the
equity method. Exceptionally, investments in certain unconsoli-
dated subsidiaries and affiliates are stated at cost because the effect
of application of the equity method would be immaterial.
Other securities for which market quotations are available are
stated at fair value.
Net unrealized gains or losses on these securities are reported
as a separate item in shareholders’ equity at a net-of-tax amount.
Other securities for which market quotations are unavailable
are stated at cost, except as stated in the following paragraph.
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