Square Enix 2005 Annual Report Download - page 29

27
Annual Report 2005
Principal non-consolidated subsidiaries not accounted
for by the equity method (BMF CORPORATION, SPORTS
BB CORPORATION, SOLID CO., LTD., SQUARE U.S.A., INC.)
and an affiliated company (KUSANAGI INC.) are excluded
from the scope of consolidation as equity-method affiliates,
as the Company’s equity in net income (loss) and equity in
retained earnings (deficit) in these companies are deemed
to have immaterial effect on the Company’s consolidated
financial statements. In addition, as the Company’s invest-
ment in MAG GARDEN CORP. is deemed to be temporary,
it has been excluded from the scope of consolidation as an
equity-method affiliate.
• FY2004 (April 1, 2004 to March 31, 2005)
Number of equity-method non-consolidated subsidiaries
and affiliates: 0
Principal non-consolidated subsidiaries not accounted for
under the equity method (BMF CORPORATION, SOLID
CO., LTD., SQUARE U.S.A., INC.) and an affiliated company
(KUSANAGI INC.) are excluded from the scope of consoli-
dation as equity-method affiliates, as the Company’s equity
in net income (loss) and equity in retained earnings (deficit)
in these companies are deemed to have immaterial effect
on the Company’s consolidated financial statements. In
addition, as the Company’s investment in MAG GARDEN
CORP. is deemed to be temporary, it has been excluded
from the scope of consolidation as an equity-method
affiliate.
3. Fiscal Year-End of Consolidated Subsidiaries
• FY2003 (April 1, 2003 to March 31, 2004)
The fiscal year of SQUARE ENIX WEBSTAR NETWORK
TECHNOLOGY (BEIJING) CO., LTD., COMMUNITY ENGINE
NETWORK SOFTWARE (BEIJING) CO., LTD., SQUARE
PICTURES, INC., and FF·FILM PARTNERS (partnership)
ends December 31.
In the preparation of consolidated financial statements,
their financial statements for the December 31 fiscal year-
end are used. Significant transactions between their fiscal
year-end and the consolidated balance date of March 31
are reconciled for consolidation.
• FY2004 (April 1, 2004 to March 31, 2005)
The fiscal year of SQUARE ENIX WEBSTAR NETWORK
TECHNOLOGY (BEIJING) CO., LTD., COMMUNITY
ENGINE NETWORK SOFTWARE (BEIJING) CO., LTD.,
SQUARE ENIX (China) CO., LTD., SQUARE PICTURES, INC.,
and FF·FILM PARTNERS (partnership) ends December 31.
In the preparation of consolidated financial statements,
their financial statements for the December 31 fiscal year-
end are used. Significant transactions between their fiscal
year-end and the consolidated balance date of March 31
are reconciled for consolidation.
4. Summary of Significant Accounting
Policies
(1) Standards and valuation methods for major assets
• FY2003 (April 1, 2003 to March 31, 2004)
A) Investment securities
Held-to-maturity securities:
Amortized cost method, amortized on a straight-line
basis
Other investment securities
Securities for which fair values are available:
Market value, determined by the quoted market
price as of the balance sheet date, with unrealized
gains and losses reported as a separate component
of shareholders’ equity at a net-of-tax amount, and
the cost of sales determined by the moving-average
method
Securities for which fair values are unavailable:
Stated at cost determined by the average method
B) Inventories
Manufactured goods, merchandise:
Stated at cost, determined by the monthly average
method
Content production account:
Stated at cost, determined by the identified cost
method
Unfinished goods:
Stated at cost, determined by the monthly average
method
Supplies:
Stated at the last purchase price
• FY2004 (April 1, 2004 to March 31, 2005)
A) Investment securities
Held-to-maturity securities:
Same as FY2003
Other investment securities
Securities for which fair values are available:
Same as FY2003
Securities for which fair values are unavailable:
Same as FY2003