Mazda 2008 Annual Report Download - page 70

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Balance sheets of consolidated overseas subsidiaries are translated into Japanese yen at the rates on the
subsidiaries’ balance sheet dates except for shareholders’ equity accounts, which are translated at the historical rates.
Income statements of consolidated overseas subsidiaries are translated at average rates during the subsidiaries’
accounting periods, with the translation differences prorated and included in the shareholders’ equity as foreign
currency translation adjustments and minority interests.
Cash and cash equivalents
The Company and its consolidated subsidiaries consider all highly liquid investments with maturities of three months
or less at the time of acquisition to be cash equivalents.
Securities
The Company and its consolidated domestic subsidiaries (together the “Domestic Companies”) classify securities
as (a) securities held for trading purposes (hereafter, “trading securities”), (b) debt securities intended to be held
to maturity (hereafter, “held-to-maturity debt securities”), (c) equity securities issued by subsidiaries and affiliated
companies, and (d) all other securities that are not classified in any of the above categories (hereafter, “available-for-
sale securities”).
The Company and its consolidated subsidiaries do not have trading securities or held-to-maturity debt securities.
Equity securities issued by subsidiaries and affiliated companies which are not consolidated or accounted for using
the equity method are stated at moving-average cost. Available-for-sale securities with available fair market values
are stated at fair market value. Unrealized gains and unrealized losses on these securities are reported, net of
applicable income taxes, as a separate component of valuation and translation adjustments of equity. Realized gains
and losses on sale of such securities are computed using moving-average cost. Available-for-sale securities without
available fair market values are stated mainly at moving-average cost.
If the market value of equity securities issued by unconsolidated subsidiaries and affiliated companies and
available-for-sale securities declines significantly, such securities are stated at fair market value and the difference
between fair market value and the carrying amount is recognized as a loss in the period of the decline. If the fair
market value of equity securities issued by unconsolidated subsidiaries and affiliated companies not on the equity
method is not readily available, such securities should be written down to net asset value with a corresponding charge
in the statement of income in the event net asset value declines significantly. In these cases, such fair market value or
the net asset value will be the carrying amount of the securities at the beginning of the next year.
Inventories
Inventories are stated at cost determined principally by the average method.
Property, plant and equipment (except for leased properties)
Property, plant and equipment are stated mainly at cost. Depreciation is computed principally using the straight-line
method over the useful lives of the assets determined in accordance with Japanese income tax law.
Intangible fixed assets (except for leased properties)
Intangible fixed assets are amortized principally on the straight-line method over useful lives of the assets determined
in accordance with Japanese income tax law.
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