Nintendo 2013 Annual Report Download - page 27

B. Securities and Derivatives
Securities
Held-to-maturity debt securities are stated using amortized cost method on a straight-line basis. Other investment securities for
which market quotations are available are stated at fair value at the balance sheet date. Unrealized gains and losses on other
investment securities are recorded as “Valuation difference on available-for-sale securities” in “Net assets” at the net-of-tax
amount. The cost of investment securities sold is determined based on the moving average cost.
Other investment securities for which market quotations are unavailable are stated at cost, determined by the moving average
method.
Derivatives
Derivatives are stated at fair value.
C. Inventories
Finished goods, work in process, and raw materials and supplies are mainly measured by the lower of cost or market method
based on the moving average method, in which write-downs of inventories are reflected on the balance sheet in the event of
decreased profitability.
D. Property, Plant and Equipment
The Company and its domestic consolidated subsidiaries compute depreciation by the declining balance method over the
estimated useful lives except for certain tools, furniture and fixtures depreciated over the economic useful lives. The straight-line
basis of depreciation is used for buildings, except for structures, acquired on or after April 1, 1998. Overseas consolidated
subsidiaries compute depreciation by applying the straight-line basis over the period of estimated useful lives. Estimated useful
lives of “Buildings and structures,” one of the principal assets, are 3 to 60 years.
Leased assets are excluded from property, plant and equipment.
E. Intangible Assets
Amortization of intangible assets, except for computer software for internal use, is computed by the straight-line basis over the
estimated useful lives. Amortization of computer software for internal use is computed by the straight-line basis over the estimated
internal useful lives of mainly five years.
Leased assets are excluded from intangible assets.
F. Leased Assets
Leased assets related to finance lease transactions that do not transfer ownership are depreciated on a straight-line basis, with
the lease periods used as their useful lives and no residual value.
G. Allowance for Doubtful Accounts
The Company and its domestic consolidated subsidiaries provide the allowance for doubtful accounts based on the historical
analysis of loss experience for general receivables and the evaluation of uncollectible amount on individual doubtful receivables.
Overseas consolidated subsidiaries provide the allowance for doubtful accounts based on the evaluation of uncollectible amount
on individual receivables.
H. Provision for Bonuses
The Company and certain consolidated subsidiaries provide the reserve for the estimated amount of bonuses to be paid to the
employees.
Note 2. Significant Accounting Policies
The accompanying consolidated financial statements of Nintendo Co., Ltd. (the “Company”) and its consolidated subsidiaries
are compiled from the consolidated financial statements prepared by the Company as requested by the Financial Instruments and
Exchange Act of Japan and are prepared on the basis of accounting principles and practices generally accepted in Japan, which
are different in certain respects as to application and disclosure requirements of the International Financial Reporting Standards.
The financial statements of the Company and its domestic subsidiaries are prepared on the basis of the accounting and relevant
legal requirements in Japan. The financial statements of the overseas consolidated subsidiaries are prepared on the basis of the
accounting and relevant legal requirements of their countries of domicile and no adjustment has been made to their financial
statements in consolidation to the extent that significant differences do not occur, as allowed under the generally accepted
accounting principles and practices in Japan.
As permitted by the Financial Instruments and Exchange Act of Japan, each amount of the accompanying consolidated financial
statements is rounded down to the nearest one million yen (In the case of translation into U.S. dollars, it is rounded down to the
nearest one thousand dollars). Consequently, the totals shown in the accompanying consolidated financial statements do not
necessarily agree with the sums of the individual amounts.
The consolidated financial statements presented herein are stated in Japanese yen, the currency of the country in which the
Company is incorporated and operates. The rate of ¥94 to U.S.$1, the approximate current rate of exchange on March 31, 2013,
has been applied for the purpose of presentation of the accompanying consolidated financial statements in U.S. dollars. These
amounts in U.S. dollars are included solely for convenience and should not be construed as representations that the Japanese yen
amounts actually represent, have been or could be converted into U.S. dollars at this or any other rate of exchange.
The accompanying consolidated financial statements are not intended to present the consolidated financial position, results of
operations and cash flows in accordance with accounting principles and practices generally accepted in countries and jurisdictions
other than Japan.
Note 1. Basis of Presenting Consolidated Financial Statements
A. Principles of Consolidation
The accompanying consolidated financial statements include the accounts of the Company and all of its 29 subsidiaries except
for one as of March 31, 2013. Nintendo RU LLC. has been newly included due to the Company’s investment in it during the fiscal
year ended March 31, 2013. Project Sora Co., Ltd. has been excluded as its liquidation was completed during the fiscal year ended
March 31, 2013. One of the subsidiaries, Fukuei Co., Ltd, is not only unconsolidated, but also not being accounted for under the
equity method, as it is a small scale company and its impact is not significant on the total assets, net sales, net income or loss,
retained earnings and others in the consolidated financial statements. The equity method of accounting is applied to four affiliates
out of five as of March 31, 2013. One of the affiliates, Ape inc., is not accounted for under the equity method, as it is immaterial
and its impact is not significant on net income or loss, retained earnings and others in the consolidated financial statements. The
names of the major subsidiaries and affiliates are shown in “Corporate information” at page 38.
All the consolidated subsidiaries have adopted March 31, the closing date of the accompanying consolidated financial
statements, as their fiscal year-end except for Nintendo Phuten Co., Ltd., iQue (China) Ltd., Nintendo RU LLC. and four other
subsidiaries of December 31 as of March 31, 2013. The amounts of these subsidiaries have been included on the basis of their fiscal
periods as the differences in the closing dates are within three months prior to March 31. Besides, the amounts of certain affiliates
have been included on the basis of their fiscal periods within three months prior to March 31. Any necessary adjustments were
made to the consolidated financial statements to reflect any significant transactions from their closing dates to March 31, 2013.
Notes to Consolidated Financial Statements
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