Yamaha 2000 Annual Report Download - page 23

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1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Basis of presentation
YAMAHA CORPORATION (the “Company”) and its domestic subsidiaries maintain their accounting records and prepare their
financial statements in accordance with accounting principles and practices generally accepted in Japan, and its foreign subsidiaries
maintain their books of account in conformity with those of the countries of their domicile. The accompanying consolidated
financial statements have been prepared from the financial statements filed with the Ministry of Finance as required by the
Securities and Exchange Law of Japan. Accordingly, the accompanying consolidated financial statements may differ in certain sig-
nificant aspects to present the consolidated financial position, results of operations and cash flows in accordance with accounting
principles and practices generally accepted in countries and jurisdictions other than Japan. For the purposes of this document, cer-
tain reclassifications have been made to present the accompanying consolidated financial statements in a format which is familiar
to readers outside Japan.
In March 1998, the Business Accounting Deliberation Council of Japan (the “BADC”) issued a new accounting standard for
statements of cash flows, which became effective the year ended March 31, 2000. The Company and its consolidated subsidiaries
adopted the new accounting standard for consolidation effective the year ended March 31, 2000, and the accompanying consoli-
dated statements of cash flows for the year ended March 31, 2000 only has been prepared in accordance with this standard.
As permitted, amounts of less than one million yen have been omitted. As a result, the totals shown in the accompanying con-
solidated financial statements (both in yen and U.S. dollars) do not necessarily agree with the sum of the individual amounts.
(b) Basis of consolidation and accounting for investments in unconsolidated subsidiaries and affiliates
In accordance with the revised accounting standards for consolidation issued by the BADC, effective April 1, 1999, consolidated
financial statements are required to include the accounts of the parent company and all its subsidiaries over which substantial con-
trol is exerted through either majority ownership of voting stock and/or by other means. As a result, the accompanying consolidat-
ed financial statements include the accounts of the Company and 72 consolidated subsidiaries. All significant intercompany
balances and transactions have been eliminated in consolidation.
In addition, effective April 1, 1999, the scope of affiliates who should be accounted for by the equity method has been expanded
to include companies (other than subsidiaries as defined above) whose decision-making control over their operations is significantly
affected by the consolidated group in various ways even if they are owned by less than 20%. As a result, the investments in three
affiliates have been accounted for by the equity method.
Investments in unconsolidated subsidiaries and affiliates not accounted for by the equity method are carried at cost.
Certain foreign subsidiaries are consolidated on the basis of fiscal periods ending December 31, which differ from that of the
Company; however, the necessary adjustments are made when the effect of the difference is material.
All assets and liabilities of the subsidiaries are revaluated at fair values on acquisition, if applicable, and the excess of cost over
underlying net assets at the date of acquisition is amortized over a period of five years on a straight-line basis.
(c) Foreign currency translations
The revenue and expense accounts of its foreign consolidated subsidiaries are translated into yen at the rate of exchange in effect at
the balance sheet date. The balance sheet accounts, except for the components of shareholders’ equity, are also translated into yen
at the rate of exchange in effect at the balance sheet date. The components of shareholders’ equity are translated at historical
exchange rates.
Current monetary assets and liabilities of the Company and its domestic subsidiaries denominated in foreign currencies are
translated at the current exchange rates in effect at each balance sheet date if not hedged by forward exchange contracts, or at the
contracted rates of exchange when hedged by forward exchange contracts. Other assets and liabilities of the Company and its
domestic subsidiaries denominated in foreign currencies are translated into yen at the historical rates of exchange in effect at the
dates of the respective transactions.
(d) Cash and cash equivalents
All highly liquid investments, generally with a maturity of three months or less when purchased, which are readily convertible into
known amounts of cash and so near maturity that they represent only an insignificant risk of any change in value attributable to
changes in interest rates, are considered cash equivalents.
The BADC issued a new accounting standard for statements of cash flows in March 1998. This standard became effective for
fiscal years beginning on or after April 1, 1999. Accordingly, certain short-term investments in money trusts and other, which had
previously been classified under “marketable securities,” are now considered cash equivalents. The reclassifications were not made
to the consolidated balance sheets as of March 31, 1999 in order to conform the prior year’s presentation to the current year’s
presentation.
(e) Marketable securities, including those classified as investment securities
Marketable securities are stated at cost or at the lower of cost or market, cost being determined by the average method.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
YAMAHA CORPORATION and
Consolidated Subsidiaries
March 31, 2000 and 1999