Sharp 2009 Annual Report Download - page 49

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Sharp Corporation and Consolidated Subsidiaries
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The accompanying consolidated financial statements of Sharp
Corporation (“the Company”) and its consolidated subsidiar-
ies have been prepared in accordance with the provisions set
forth in the Japanese Financial Instruments and Exchange
Law 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 application and disclosure requirements from Interna-
tional Financial Reporting Standards (“IFRS”).
On and before the year ended March 31, 2008, the
accounts of the Company’s overseas consolidated subsidiaries
were based on their accounting records maintained in confor-
mity with generally accepted accounting principles prevailing in
their respective countries of domicile. Effective for the year
ended March 31, 2009, the financial statements of the Com-
pany’s overseas consolidated subsidiaries for consolidation
purposes have been prepared in conformity with IFRS or gen-
erally accepted accounting principles in the United States of
America (“US GAAP”), and partially reflect the adjustments
which are necessary to conform with Japanese GAAP.
The accompanying consolidated financial statements have
been restructured and translated into English (with certain
expanded disclosures) from the consolidated financial
statements of the Company prepared in accordance with
Japanese GAAP and filed with the appropriate Local Finance
Bureau of the Ministry of Finance as required by the Japanese
Financial Instruments and Exchange Law. Certain supplemen-
tary information included in the Japanese language statutory
consolidated financial statements, but not required for fair
presentation, is not presented in the accompanying consoli-
dated financial statements.
The translation of the Japanese yen amounts into U.S.
dollar amounts is included solely for the convenience of readers
outside Japan, using the prevailing exchange rate at March 31,
2009, which was ¥97 to U.S. $1.00. The translations should not
be construed as a representation that the Japanese yen
amounts have been, could have been or could in the future be
converted into U.S. dollars at this or any other rate of exchange.
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The accompanying consolidated financial statements include
the accounts of the Company and significant companies over
which the Company has power of control through majority
1. Summary of Significant Accounting and Reporting Policies
voting right or existence of certain conditions evidencing
control by the Company. Investments in nonconsolidated
subsidiaries and affiliates over which the Company has the
ability to exercise significant influence over operating and
financial policies are accounted for using the equity method.
In the elimination of investments in consolidated subsid-
iaries, the assets and liabilities of the subsidiaries, including
the portion attributable to minority shareholders, are evalu-
ated using the fair value at the time the Company acquired
control of the respective subsidiary.
Material intercompany balances, transactions and profits
have been eliminated in consolidation.
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Monetary assets and liabilities denominated in foreign curren-
cies are translated into Japanese yen at current rates at each
balance sheet date, and the resulting translation gains or
losses are charged to income.
Assets and liabilities are translated at current rates at
each balance sheet date, net assets accounts are translated
at historical rates, and revenues and expenses are translated
at average rates prevailing during the year. The resulting for-
eign currency translation adjustments are shown as a sepa-
rate component in net assets.
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Cash and cash equivalents include cash on hand, deposits on
demand placed with banks and highly liquid investments with
insignificant risk of changes in value which have maturities of
three months or less when purchased.
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Short-term investments consist of interest-bearing securities.
Investments in securities consist principally of marketable and
nonmarketable equity securities and interest-bearing securities.
The Company and its domestic consolidated subsidiaries
categorize those securities as “other securities,” which, in
principle, include all securities other than trading securities
and held-to-maturity securities.
Other securities with available fair market values are stated at
fair market value, which is calculated as the average of market
prices during the last month of the fiscal year. Unrealized holding
gains and losses on these securities are reported, net of appli-
cable income taxes, as a separate component of net assets.
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