Square Enix 2011 Annual Report Download - page 39

Non-consolidated subsidiaries that were not accounted for under
the equity method (SQUARE ENIX MOBILE STUDIO CO., LTD., and
others) and an affiliated company (BMF CORPORATION) were excluded
from the scope of application of the equity method because such
impact on consolidated net income and retained earnings was small.
■ Year ended March 31, 2011
There are no equity-method affiliates.
ROCKSTEADY STUDIOS LTD. was excluded from the scope of
application of the equity method in the fiscal year ended March 31,
2011, because of diminished significance.
Non-consolidated subsidiaries that were not accounted for under
the equity method, including hippos lab Co., Ltd. (formerly, SPC 2),
SQUARE ENIX MOBILE STUDIO CO., LTD., and SQUARE ENIX Business
Support, CO., LTD., as well as affiliated companies, were excluded
from the scope of application of the equity method because the impact
on consolidated net income and retained earnings was insignificant.
3. Fiscal Year-End of Consolidated Subsidiaries
■ Year ended March 31, 2010
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, such financial statements which have a December 31 fiscal
year-end, have been used. Significant transactions between the 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., the fiscal year-end of which is December 31, 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, 2011
Same as the year ended March 31, 2010
4. Summary of Significant Accounting Policies
(1) Standards and valuation methods for major assets:
■ Year ended March 31, 2010
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 moving-average method
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).
Raw materials, unfinished goods:
Domestic consolidated subsidiaries state raw materials and
unfinished goods at cost determined by the moving-average
method (book-entry devaluation method based on the decrease
in profitability is used with respect to balance sheet values).
Supplies:
Stated at the last purchase price
■ Year ended March 31, 2011
A) Investment securities
Other investment securities
Securities for which fair values are available:
Same as the year ended March 31, 2010
Securities for which fair values are unavailable:
Same as the year ended March 31, 2010
B) Inventories
Manufactured goods, merchandise:
Same as the year ended March 31, 2010
Content production account:
Same as the year ended March 31, 2010
Raw materials, unfinished goods:
Same as the year ended March 31, 2010
Supplies:
Same as the year ended March 31, 2010
(2) Method of depreciation and amortization for major assets:
■ Year ended March 31, 2010
A) Property and equipment (excluding leased assets)
Property and equipment of the Company and its domestic
consolidated subsidiaries are depreciated using the declining-
balance method. However, for buildings (excluding building fixtures)
acquired on or after April 1, 1998, and overseas consolidated
subsidiaries, the straight-line method is applied. The estimated
useful lives of major assets are as follows:
37