Nikon 2002 Annual Report Download - page 23

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1. BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in the Securities and
Exchange Law of Japan and its related accounting regulations, and in conformity with accounting principles and practices generally accepted in
Japan, which are different in certain respects as to application and disclosure requirements of International Accounting Standards. The consolidat-
ed financial statements are not intended to present the financial position, results of operations and cash flows in accordance with accounting prin-
ciples and practices generally accepted in countries and jurisdictions other than Japan.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated financial
statements issued domestically in order to present them in a form which is more familiar to readers outside Japan. In accordance with accounting
procedures generally accepted in Japan, certain comparative disclosures are not required to be and have not been presented herein.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which Nikon Corporation (the “Company”) is
incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of readers
outside Japan and have been made at the rate of ¥133.25 to U.S.$1, the rate of exchange at March 31, 2002. Such translations should not be
construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.
Certain reclassifications have been made in 2001 financial statements to conform to classification used in 2002.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Consolidation
The consolidated financial statements as of March 31, 2002 include the accounts of the Company and its 46 significant (41 in 2001) subsidiaries
(collectively the “Group”). Under the control or influence concept, those companies in which the Company, directly or indirectly, is able to exercise
control over operations are fully consolidated, and those companies over which the Company has the ability to exercise significant influence are
accounted for by the equity method.
Investments in 2 associated companies (1 associated company in 2001) are accounted for by the equity method. Investments in the remaining
unconsolidated subsidiaries and associated companies are stated at cost. If the equity method of accounting had been applied to the investments
in these companies, the effect on the accompanying consolidated financial statements would not be material.
The differences between the cost and underlying net equity of investments in consolidated subsidiaries and associated companies accounted
for by the equity method at acquisition (“Goodwill”) are principally charged to income when incurred.
All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profit included in assets
resulting from transactions within the Group is eliminated.
(b) Cash Equivalents
Cash equivalents are short-term investments that are readily convertible into cash and that are exposed to insignificant risk of changes in value.
Cash equivalents include time deposits, certificates of deposit, commercial paper and mutual funds investing in bonds that represent short-term
investments, all of which mature or become due within three months of the date of acquisition.
(c) Marketable and Investment Securities
Marketable and investment securities are classified and accounted for, depending on management’s intent, as follows:
i) Trading securities, which are held for the purpose of earning capital gains in the near term are reported at fair value, and the related unreal-
ized gains and losses are included in earnings,
ii) Held-to-maturity debt securities, which are expected to be held to maturity with the positive intent and ability to hold to maturity, are reported
at amortized cost and
iii)Available-for-sale securities, which are not classified as either of the aforementioned securities, are reported at fair value,with unrealized
gains and losses, net of applicable taxes, reported in a separate component of shareholders’ equity. Available-for-sale securities whose fair
value is not readily determinable are stated principally at moving-average cost.
Notes to Consolidated Financial Statements
Nikon Corporation and Consolidated Subsidiaries
Years ended March 31, 2002 and 2001