Nikon 2012 Annual Report Download - page 38

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NIKON CORPORATION ANNUAL REPORT 2012
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Nikon Corporation and Consolidated Subsidiaries
Year ended March 31, 2012
1. Basis of Presentation of 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.
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 2011 financial statements to conform
to the classifications used in 2012.
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 ¥82.19 to $1,
the approximate rate of exchange at March 31, 2012. 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, 2012
include the accounts of the Company and its 68 significant
(68 in 2011) subsidiaries (together, the “Group”). Changes
include addition of Nikon Staff Service Corporation and Nikon
India Private Limited, and completion of liquidation of 2 subsid-
iaries 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 2011) 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.
The fiscal year end of Nikon Imaging (China) Co., Ltd.; Nikon
Precision Shanghai Co., Ltd.; Nikon Imaging (China) Sales Co.,
Ltd.; and Nikon (Russia) LLC. is December 31. In preparing the
consolidated financial statements, the Group used financial
statements of those companies that had been prepared on the
basis of the provisional closing of their accounts as of the
consolidated closing date.
Since the difference between the consolidated closing date
and the closing date of Nikon Precision Shanghai Co., Ltd., is
within 3 months, the Company used to use financial state-
ments of the consolidated subsidiary as of its closing date
and make the necessary adjustments for consolidation for any
significant transactions that took place between the closing
date and the consolidated closing date up to the previous fiscal
year. From the current fiscal year, however, the Company has
used financial statements prepared on the basis of the provi-
sional closing of its accounts at the consolidated closing date.
(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 account-
ing policies and procedures applied to a parent company and
its subsidiaries for similar transactions and events under
similar circumstances should in principle be unified for the
preparation of the consolidated financial statements; (2) finan-
cial 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 pro-
cess; (3) however, 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 development
costs of R&D; 4) cancellation of the fair value model of
accounting for property, plant and equipment and
investment properties and incorporation of the cost model
of accounting; and 5) exclusion of minority interests from net
income, if contained in net income.