Nikon 2011 Annual Report Download - page 38

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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 Japanese Financial Instruments and Exchange Act
and its related accounting regulations and in conformity with
accounting principles generally accepted in Japan (“Japanese
GAAP”), which are different in certain respects as to applica-
tion and disclosure requirements of International Financial
Reporting Standards.
Under Japanese GAAP, a consolidated statement of com-
prehensive income is required from the fiscal year ended
March 31, 2011 and has been presented herein. Accordingly,
accumulated other comprehensive income is presented in the
consolidated balance sheet and the consolidated statement of
changes in equity. Information with respect to other compre-
hensive income for the year ended March 31, 2010 is disclosed
in Note 17. In addition, “net income before minority interests”
is disclosed in the consolidated statement of income from the
year ended March 31, 2011.
In preparing these consolidated financial statements, cer-
tain 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 addition, certain reclassifications
have been made in the 2010 financial statements to conform
to the classifications used in 2011.
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 ¥ 83.15 to $1,
the approximate rate of exchange at March 31, 2011. 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.
2. Summary of Significant Accounting Policies
(a) Consolidation
The consolidated financial statements as of March 31, 2011
include the accounts of the Company and its 68 significant
(69 in 2010) subsidiaries (together, the “Group”). This net
decrease during fiscal 2010 includes the addition of Nikon
Russia LLC and Nikon Holdings Hong Kong Limited, and com-
pletion of the liquidation of 3 subsidiaries of Nikon Metrology
NV. 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 Group has the ability to exercise
significant influence are accounted for by the equity method.
Investments in 2 associated companies (2 associated com-
panies in 2010) are accounted for by the equity method. Invest-
ments 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 excess of the cost of an acquisition over the fair value
of the net assets of the acquired subsidiaries at the date of
acquisition (“Goodwill”) is charged to income when incurred,
if the amounts are immaterial; otherwise, the amounts are
amortized on a straight-line basis principally over 10 years.
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.
Effective March 31, 2011, Nikon Metrology NV and its sub-
sidiaries changed their fiscal year-end from December 31 to
March 31. Accordingly, fiscal 2010 consisted of 15 months.
(b) Unification of Accounting Policies Applied to Foreign
Subsidiaries for the Consolidated Financial Statements
In May 2006, the Accounting Standards Board of Japan (the
“ASBJ”) issued ASBJ Practical Issues Task Force (PITF) No. 18,
“Practical Solution on Unification of Accounting Policies
Applied to Foreign Subsidiaries for the Consolidated Financial
Statements.” PITF No. 18 prescribes: (1) the accounting policies
and procedures applied to a parent company and its subsidiar-
ies for similar transactions and events under similar circum-
stances should in principle be unified for the preparation of the
consolidated financial statements, (2) financial statements
prepared by foreign subsidiaries in accordance with either
International Financial Reporting Standards or the generally
accepted accounting principles in the United States of America
tentatively may be used for the consolidation process, (3) how-
ever, the following items should be adjusted in the consolidation
process so that net income is accounted for in accordance with
Japanese GAAP unless they are not material:
1) amortization of goodwill; 2) scheduled amortization of
actuarial gain or loss of pensions that has been directly
recorded in the equity; 3) expensing capitalized develop-
ment costs of R&D; 4) cancellation of the fair value model of
accounting for property, plant and equipment and invest-
ment properties and incorporation of the cost model of
accounting; 5) recording the prior years’ effects of changes
in accounting policies in the income statement where retro-
spective adjustments to financial statements have been
incorporated; and 6) exclusion of minority interests from
net income, if contained. PITF No. 18 was effective for fiscal
years beginning on or after April 1, 2008.
Notes to Consolidated Financial Statements
Nikon Corporation and Consolidated Subsidiaries
Years ended March 31, 2010 and 2011