Suzuki 2009 Annual Report Download - page 33

32 SUZUKI MOTOR CORPORATION
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 Japan 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 98.23 to U.S.$1, the rate of exchange prevailing as of March 31, 2009. 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, 2009 and 2008, include the accounts of the
Company and its significant subsidiaries and the number of consolidated subsidiaries are 140 and 139 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 over a period of five years after appropriate adjustments.
The account settlement date of 30 consolidated subsidiaries is December 31, but Magyar Suzuki Corporation Ltd.
and 4 others are consolidated based on the financial statements of provisional account settlement as of March 31. Other
25 subsidiaries are consolidated with the financial statements based on their respective account settlement date.
The account settlement date of other consolidated subsidiaries is the same as the consolidated account settlement
date.
(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.
(f) Short-term investment securities, investment securities
The Company and its subsidiaries hold securities of listed companies, which have a risk of price fluctuations, and
non-listed companies whose stock prices are difficult to be evaluated.
If we judge the decline in investment value is not temporary, we recognize revaluation loss based on the reasonable
standard. If the stock market falls, we may incur significant loss on valuation of 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 available-for-sale securities.
According to this classification, securities held by the Company and its subsidiaries are available-for-sale securities.
Available-for-sale securities for which market quotations are available are stated at market value method based on the
market values as of the consolidated account settlement date (The evaluation differences shall be reported as a
component of net assets, and sales costs shall be calculated mainly by the moving average method).
Available-for-sale securities for which market quotations are unavailable are stated at cost by a moving average
method.
Consolidated Financial Statements of 2009