Canon 2007 Annual Report Download - page 74

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2. Basis of Financial Statement Translation
The consolidated financial statements presented herein are
expressed in Japanese yen and, solely for the convenience of the
reader, have been translated into United States dollars at the
rate of ¥114=U.S.$1, the approximate exchange rate prevailing
on the Tokyo Foreign Exchange Market on December 28, 2007.
This translation should not be construed as a representation
that the amounts shown could be converted into United States
dollars at such rate.
159”). SFAS 159 provides companies with an option to report
selected financial assets and liabilities at fair value. Unrealized
gains and losses on items for which the fair value option has
been elected will be recognized in earnings. SFAS 159 is effec-
tive for fiscal years beginning after November 15, 2007 and is
required to be adopted by Canon in the first quarter beginning
January 1, 2008. The adoption of SFAS 159 will not have a
material impact on Canon’s consolidated results of operations
and financial condition.
In June 2007, the FASB ratified the EITF consensus on EITF
Issued No. 07-3, “Accounting for Nonrefundable Advance
Payments for Goods or Services Received for Use in Future
Research and Development Activities” (“EITF 07-3”). EITF 07-3
requires that nonrefundable advance payments for goods or
services that will be used or rendered for future research and
development activities be deferred and capitalized and recog-
nized as an expense as the goods are delivered or the related
services are performed. EITF 07-3 is effective, on a prospective
basis, for fiscal years beginning after December 15, 2007 and is
required to be adopted by Canon in the first quarter beginning
January 1, 2008. The adoption of EITF 07-3 will not have a
material impact on Canon’s consolidated results of operations
and financial condition.
In December 2007, the FASB issued SFAS No. 141 (revised
2007), “Business Combinations ” (“SFAS 141R”). SFAS 141R
establishes principles and requirements for how an acquirer
recognizes and measures in its financial statements the identifi-
able assets acquired, the liabilities assumed, any noncontrolling
interest in the acquiree and the goodwill acquired. SFAS 141R
also establishes disclosure requirements to enable the evaluation
of the nature and financial effects of the business combination.
SFAS 141R is effective for fiscal years beginning on or after
December 15, 2008 and is required to be adopted by Canon in
the first quarter beginning January 1, 2009. Canon is currently
evaluating the potential effect, if any, that the adoption of
SFAS 141R will have on Canon’s consolidated results of
operations and financial condition.
In December 2007, the FASB issued SFAS No. 160,
“Noncontrolling Interests in Consolidated Financial Statement,
an amendment of ARB No. 51” (“SFAS 160”). SFAS 160
establishes accounting and reporting standards for ownership
interests in subsidiaries held by parties other than the parent,
the amount of consolidated net income attributable to the
parent and to the noncontrolling interest, changes in a parent’s
ownership interest, and the valuation of retained noncontrolling
equity investments when a subsidiary is deconsolidated. SFAS
160 also establishes disclosure requirements that clearly identify
and distinguish between the interests of the parent and the
interests of the noncontrolling owners. SFAS 160 is effective
for fiscal years beginning on or after December 15, 2008 and is
required to be adopted by Canon in the first quarter beginning
January 1, 2009. Canon is currently evaluating the effect that
the adoption of SFAS 160 will have on its consolidated results
of operations and financial condition.
(y) Reclassification
Time deposits with original maturities of more than three
months, which were previously included in prepaid expenses
and other current assets, have been reclassified to time deposits
in the consolidated balance sheets to conform to the current
year presentation.
Thousands of
Millions of yen U.S. dollars
2007 2006 2005 2007
December 31:
Total assets ¥2,077,268 ¥1,995,927 ¥1,751,011 $18,221,649
Net assets 1,024,150 907,845 767,711 8,983,772
Years ended December 31:
Net sales ¥3,433,036 ¥3,119,102 ¥2,774,443 $30,114,351
Net income 136,560 114,916 81,916 1,197,895
3. Foreign Operations
Amounts included in the consolidated financial statements
relating to subsidiaries operating in foreign countries are
summarized as follows:
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS (CONTINUED)
CANON INC. AND SUBSIDIARIES