Suzuki 2011 Annual Report Download - page 38

SUZUKI MOTOR CORPORATION 37
Consolidated Financial Statements
(Changes in presentation)
(Consolidated statements of income)
The “Cabinet Office Ordinance on the Partial Revision to the accounting standards of Consolidated Financial Statements”
(Cabinet Office Ordinance No. 5 March 24, 2009)) has been applied in accordance with the “Accounting Standard for Con-
solidated Financial Statements” (ASBJ Statement No.22, December 26, 2008) and “Income before minority interests” was
presented since the current consolidated fiscal year. The consolidated statements of income for the previous fiscal year has
been modified to conform with the new presentation rules for the current fiscal year.
(Additional Information)
The “Accounting Standard for Presentation of Comprehensive Income” (ASBJ Statement No.25, June 30, 2010) has been
applied since the current consolidated fiscal year.
The consolidated balance sheet and consolidated statements of changes in net assets for the previous fiscal year has
been modified to conform with the new presentation rules for the current fiscal year. Also, the Company prepared a consoli-
dated statement of comprehensive income for the previous fiscal year. The amount of “Accumulated other comprehensive
income” and “Total accumulated other comprehensive income” of the previous fiscal year are the amount of “Valuation and
translation adjustments” and “Total valuation and translation adjustments”, respectively.
NOTE 4: Financial Instruments
(a) Matters for conditions of financial instruments
a. Policy for financial instruments
As for the fund management, the Group uses short-term deposits and short-term investment securities, and as
for the fund-raising, the Group uses borrowings from financial institutions such as banks and issuance of bonds.
The Group uses derivatives to hedge and manage the risks of interest-rates and exchange-rates fluctuations, and
does not use derivatives for speculation purposes.
b. Type of financial instruments, risks and risk management
With respect to customers’ credit risks from operating receivables such as notes and accounts receivables-
trade, in order to mitigate the risks, the Group identifies credit standing of major counterparties and manages
due date and receivable balance of each counterparty in line with our rules and regulations for credit control. The
Group hedges risks of exchange-rate fluctuations from operating receivables denominated in foreign currency by
forward exchange contract in principle.
Investment securities are mainly stocks of companies with which the Group has business relationship, and as
for listed stocks, the Group quarterly identifies those fair value and reports them to the Board of Directors.
Most of accounts payable-trade are due within one year.
Applications of borrowings are fund for operating capital (mainly short-term) and capital expenditures (long-
term), and the Group uses interest-rate swaps for the interest rate risks of some long-term borrowings to fix interest
expenses.
Objectives of derivative transactions are foreign currency forward contracts to hedge the risks of exchange-rate
fluctuations related to receivables denominated in foreign currencies and interest rate swaps to hedge the risks of
interest-rates fluctuations related to borrowings. The Group executes and manages derivatives within the actual
demand in line with our rules and regulations which set out the authority to trade. In addition, in using derivatives,
the Group deals with financial institutions which have high credit grade in order to reduce credit risks. With respect
to hedge accounting, also please see Note 2 (g).
In addition, each of the Group company manages liquidity risk related to accounts payable and borrowings by
making a financial plan.
c. Supplement to fair values of financial instruments
Fair values of financial instruments include values based on quoted prices in active markets and values as-
sessed by rational valuation techniques in case quoted prices are not available. Because the rational valuation
techniques include variable factors, the results of valuation may differ when different assumption is applied.