Suzuki 2003 Annual Report Download - page 26

SUZUKI MOTOR CORPORATION
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
1. Basis of presenting consolidated financial statements
The accompanying consolidated financial statements of SUZUKI MOTOR CORPORATION (the
Company) have been prepared on the basis of generally accepted accounting principles and
practices in Japan, and from the consolidated financial statements filed with the Ministry of
Finance as required by the Securities and Exchange Law of Japan.
Certain reclassifications and modifications have been made to the original consolidated
financial statements for the convenience of readers outside Japan. In addition, the consolidated
statements of shareholders' equity have been prepared as additional information, although such
statements are not required in Japan, and the notes include information which is not required
under generally accepted accounting principles and practices in Japan.
As permitted, amount of less than one million yen have been omitted. For the convenience of
readers, the consolidated financial statements including the opening balance of shareholders'
equity have been presented in U.S. dollars by translating all Japanese yen amounts on the
basis of ¥120.20 to U.S.$1, the rate of exchange prevailing as of March 31, 2003. Consequently,
the totals shown in the consolidated financial statements (both in yen and in U.S. dollars) do not
necessarily agree with the sum of the individual amounts.
2. Summary of significant accounting policies
(a)Principles of consolidation
The consolidated financial statements for the years ended March 31, 2003 and 2002, include
the accounts of the Company and its significant subsidiaries and the number of consolidated
subsidiaries are 144 and 128 respectively. All significant inter-company accounts and
transactions are eliminated in consolidation. Investments in affiliated companies are accounted
for by the equity method.
As for the evaluation of assets and liabilities of consolidated subsidiaries, the complete market
value accounting method is adopted. The difference at the time of acquisition between the cost
and underlying net equity of investments in consolidated subsidiaries and in affiliated companies
accounted for under the equity method is, as a rule, amortized over a period of five years after
appropriate adjustments.
(b)Marketable securities, investment in securities
Securities have to be classified into four categories; Trading securities, Held-to-maturity debt
securities, Investments of the Company in equity securities issued by unconsolidated subsidiaries
and affiliates and Other securities.
According to this classification, securities held by the Company and its subsidiaries are Other
securities. Other securities for which market quotations are available are stated at fair value by
closing date's market value method. Unrealized gains or losses are included in a component of
shareholders' equity at a net-of-tax amount, and gains or losses from sales of securities are
recognized on cost determined by the moving average method.
Other securities for which market quotations are unavailable are stated at cost by a moving
average method.
(c)Hedge accounting
Gains or losses arising from changes in fair value of the derivatives designated as "hedging
instruments" are deferred as an asset or liability and included in net profit or loss in the same
period during which the gains and losses on the hedged items or transactions are recognized.
The derivatives designated as hedging instruments by the Company are principally interest
swaps and forward exchange contracts. The related hedged items are trade accounts receivable
and investments in securities.
The Company has a policy to utilize the above hedging instruments in order to reduce The
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