Mazda 2007 Annual Report Download - page 65
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Notes to Consolidated Financial Statements
Mazda Motor Corporation and Consolidated Subsidiaries
1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements have been prepared in accordance with the
provisions set forth in the Japanese Securities and Exchange Law and its related accounting regulations,
and in conformity with accounting principles generally accepted in Japan, which are different in certain
respects as to application and disclosure requirements of International Financial Reporting Standards.
The accounts of overseas subsidiaries are based on their accounting records maintained in conformity
with generally accepted accounting principles prevailing in the respective countries of domicile.The
accompanying consolidated financial statements have been restructured and translated into English with
some expanded descriptions from the consolidated financial statements of Mazda Motor Corporation
(the “Company”) prepared in accordance with Japanese GAAP and filed with the appropriate Local
Finance Bureau of the Ministry of Finance as required by the Securities and Exchange Law. Some
supplementary information included in the statutory Japanese language consolidated financial
statements, but not required for fair presentation, is not presented in the accompanying consolidated
financial statements.
The translation of the Japanese yen amounts into U.S. dollars are included solely for the convenience
of readers outside Japan, using the prevailing exchange rate at March 31, 2007, which was ¥118 to
U.S. $1.00. The convenience translations should not be construed as representations that the
Japanese yen amounts have been, could have been, or could in the future be, converted into U.S.
dollars at this or any other rate of exchange.
2. Significant Accounting Policies
Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Company and
significant companies, over which the Company has power of control through majority voting rights or
existence of certain conditions evidencing control by the Company. Investments in non-consolidated
subsidiaries and affiliates, over which the Company has the ability to exercise significant influence over
operating and financial policies of the investees, are accounted for by the equity method.
The consolidated financial statements include the accounts of the Company and 58 subsidiaries (58
in the year ended March 31, 2006 and 53 in the year ended March 31, 2005). In addition, 13 affiliates
(14 in the year ended March 31, 2006 and 12 in the year ended March 31, 2005) are accounted for by
the equity method.
The consolidated year-end balance sheet date is March 31. Among the consolidated subsidiaries, 8
companies (7 at March 31, 2006 and 4 at March 31, 2005) have a year-end balance sheet date of
December 31, which is different from the consolidated balance sheet date. In preparing the consolidated
financial statements, for 5 of the 8 companies, the financial statements of these companies with the
December 31 year-end balance sheet date are used. However, adjustments necessary in consolidation
are made for material transactions that have occurred between the balance sheet date of these
subsidiaries and the consolidated year-end balance sheet date. For the other 3 companies, special
purpose financial statements that are prepared for consolidation as of the consolidated balance sheet
date are used to supplement the companies’statutory financial statements.
Among the consolidated overseas subsidiaries, Compania Colombiana Automotriz S.A. prepares its
financial statements based on the accounting principles generally accepted in Colombia to reflect
adjustments for the country's inflationary economy and changing prices.