Square Enix 2006 Annual Report Download - page 31

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2 8 2 9
A n n u a l R e p o r t 2 0 0 6
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 an immaterial effect on the Company’s consolidated finan-
cial 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.
• FY2005 (April 1, 2005 to March 31, 2006)
Number of equity-method affiliates: 3
Baltec Co., Ltd.
Kaaku LTD.
Kaasa Solution GmbH
Principal non-consolidated subsidiaries not accounted for under
the equity method (UIE JAPAN CO., LTD., ZERO RESEARCH
LTD., and SOLID CO., LTD.) and affiliated companies (BMF
CORPORATION and 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 an
immaterial effect on the Company’s consolidated financial
statements. Baltec Co., Ltd., Kaaku LTD., and Kaasa Solution
GmbH are consolidated subsidiaries of TAITO CORPORATION
acquired during the period.
3 . F is c a l Y e a r -E n d o f C o n s o lid a t e d S u b s id ia r ie s
• FY2004 (April 1, 2004 to March 31, 2005)
The fiscal year of SQUARE ENIX WEBSTAR NETWORK TECH-
NOLOGY (BEIJING) CO., LTD., COMMUNITY ENGINE NETWORK
SOFTWARE (BEIJING) CO., LTD., SQUARE ENIX (China) CO., LTD.,
SQUARE PICTURES, INC., and FF·FILM PARTNERS (partnership)
ends on 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.
• FY2005 (April 1, 2005 to March 31, 2006)
Among the Company’s consolidated subsidiaries, the fiscal year
of SQUARE ENIX (China) CO., LTD., HUANG LONG CO., LTD.,
COMMUNITY ENGINE NETWORK SOFTWARE (BEIJING) CO.,
LTD., BEIJING TAIXIN CULTURAL AMUSEMENT CO., LTD.,
SQUARE PICTURES, INC., and FF·FILM PARTNERS ends on
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 sheet date of March 31 are
reconciled for consolidation.
For SQUARE ENIX WEBSTAR NETWORK TECHNOLOGY
(BEIJING) CO., LTD., a provisional settlement of accounts for this
fiscal year was used as the basis for the preparation of financial
statements.
4 . S u m m a r y o f S ig n if ic a n t A c c o u n t in g P o lic ie s
(1) Standards and valuation methods for major assets
• FY2004 (April 1, 2004 to March 31, 2005)
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
Amusement equipment:
—————
Unfinished goods:
Stated at cost, determined by the monthly average
method
Supplies:
Stated at the last purchase price
• FY2005 (April 1, 2005 to March 31, 2006)
A) Investment securities
Held-to-maturity securities:
—————
Other investment securities
Securities for which fair values are available:
Same as FY 2004
Securities for which fair values are unavailable:
Same as FY 2004
B) Inventories
Manufactured goods, merchandise:
Stated at cost, determined by the monthly average method
Certain consolidated subsidiaries, however, determine
cost by the moving-average method