Suzuki 2008 Annual Report Download - page 34

SUZUKI MOTOR CORPORATION 33
Notes to Consolidated Financial Statements
NOTE 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 the consolidated financial statements were
filed with the Ministry of Finance as required by the Financial Instruments and Exchange Act of Japan.
The preparation of the Consolidated Financial Statements requires the management to select and adopt accounting
standards and make estimates and assumptions that affect the reported amount of assets and liabilities, revenue and
expenses, and the corresponding methods of disclosure.
As such, the management’s estimates are made reasonably based on historical results. But due to the inherent uncertainty
involved in making estimates, actual results could differ from these estimates.
For the convenience of readers outside Japan, certain reclassifications and modifications have been made to the original
Consolidated Financial Statements.
As permitted, an amount of less than one million yen has 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 100.19 to U.S.$1, the rate of exchange prevailing as of March 31, 2008.
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.
NOTE 2: Summary of significant accounting policies
(a) Principles of consolidation
The Consolidated Financial Statements for the years ended March 31, 2008 and 2007, include the accounts of the
Company and its significant subsidiaries and the number of consolidated subsidiaries are 139 and 138 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
on a straight-line basis mainly over a period of five years after appropriate adjustments.
As for 34 companies of consolidated subsidiaries, their fiscal year end is December 31. “American Suzuki Motor
Corporation” and the other 9 companies within above-mentioned 34 companies, their accounts were consolidated
based on their financial statements by the preliminary settlement as of March 31, 2008.
(Additional Information)
PT Indomobil Suzuki International and its subsidiaries and subsubsidiaries, Pak Suzuki Motor Co., LTD., and Thai
Suzuki Motor Co., Ltd., total 19 consolidated subsidiaries, had been consolidated based on their closing date of 31st
December until FY 2006. From this fiscal year, their accounts are consolidated based on the financial period from April
1st to March 31st.
According to this change, the consolidated figures of FY 2007 have been affected as follows:
Net sales .................... increased 9,014 million yen
Operating income ..... decreased 2,612 million yen
Ordinary income ........ decreased 2,070 million yen
Net income ................ decreased 910 million yen
(b) Allowance for doubtful receivables
The allowance is appropriated for an estimated uncollectible amount into this account based on doubtful receivable
ratio for general receivables and the identified collectibility for specific receivables.
(c) Provision for warranty costs
The provision is appropriated into this account based on the warranty agreement and past experience in order to
allow for expenses related to the maintenance service of products sold.
(d) Provision for recycling end-of-life products
The provision is appropriated for an estimated expense related to the recycling end-of-life products of the Company
based on actual sales.
(e) Provision for product liabilities
With regards to the products exported to North American market, to prepare for the payment of compensation, not
covered by “Product Liability Insurance” the anticipated amount to be borne by the Company is computed and provided
on the basis of actual results in the past.
Consolidated Financial Statements of 2008