Square Enix 2009 Annual Report Download - page 31

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2. Application of the Equity Method of Accounting
• Year ended March 31, 2008
Number of equity-method affiliates: 3
Kaaku Ltd.
Kaasa Solution GmbH
Brave, Inc.
Baltec Co., Ltd. was excluded from application of the equity
method in this fiscal year, owing to the transfer of all shares held
in that company to another party.
Non-consolidated subsidiaries that are not accounted for under
the equity method (SOLID CO., LTD., PlayOnline, Inc., SQUARE ENIX
MOBILE STUDIO CO., LTD. and SMILE-LAB Co., Ltd.) and affiliated
companies (BMF CORPORATION, Stylewalker, Inc. and KUSANAGI
INC.) were excluded from the scope of application of the equity
method because their impact on consolidated net income and
retained earnings was small.
• Year ended March 31, 2009
Number of equity-method affiliates: 1
Brave, Inc.
Kaaku Ltd. and Kaasa Solution GmbH were excluded from the scope
of application of the equity method in this fiscal year, owing to the
sale of all shares held in those companies.
Non-consolidated subsidiaries that are not accounted for under
the equity method (SOLID CO., LTD., PlayOnline Inc., SQUARE ENIX
MOBILE STUDIO CO., LTD., and SMILE-LAB Co., Ltd., and
Stylewalker, Inc.) and affiliated companies (BMF CORPORATION and
KUSANAGI INC.) were excluded from the scope of application of the
equity method because their impact on consolidated net income and
retained earnings was small.
3. Fiscal Year-End of Consolidated Subsidiaries
• Year ended March 31, 2008
Among the Company’s consolidated subsidiaries, the fiscal years of
SQUARE ENIX (China) CO., LTD., HUANG LONG CO., LTD., BEIJING
TAIXIN CULTURAL AMUSEMENT CO., LTD., SQUARE PICTURES, INC.
and FF FILM PARTNERS end on December 31.
In the preparation of the accompanying consolidated financial
statements, their financial statements which have a December 31
fiscal year-end, have been 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 as of the Company’s
balance sheet date was used as the basis for the preparation of the
consolidated financial statements.
• Year ended March 31, 2009
Same as the year ended March 31, 2008
4. Summary of Significant Accounting Policies
(1) Standards and valuation methods for major assets
• Year ended March 31, 2008
A) Investment securities
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 net assets at a
net-of-tax amount, and 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
Certain consolidated subsidiaries, however, determine cost
by the moving-average method
Content production account:
Stated at cost, determined by the identified cost method
Amusement equipment:
Stated at cost, determined by the identified cost method
Unfinished goods:
Some consolidated subsidiaries state unfinished goods at
cost, determined by the moving-average method
Supplies:
Stated at the last purchase price
• Year ended March 31, 2009
A) Investment securities
Other investment securities
Securities for which fair values are available:
Same as the year ended March 31, 2008
Securities for which fair values are unavailable:
Same as the year ended March 31, 2008
B) Inventories
Manufactured goods, merchandise:
Stated at cost, determined by the monthly average method
(book-entry devaluation method based on the decrease in
profitability is used with respect to balance sheet value).
Consolidated subsidiaries, however, principally determine
cost by the moving-average method (book-entry devaluation
method based on the decrease in profitability is used with
respect to balance sheet values).
However, amusement equipment is stated at cost, determined
by the identified cost method (book-entry devaluation method
based on the decrease in profitability is used with respect to
balance sheet values).
Content production account:
Stated at cost, determined by the identified cost method
(book-entry devaluation method based on the decrease in
profitability is used with respect to balance sheet values).
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