Casio 2001 Annual Report Download - page 23

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NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Years ended March 31, 2001 and 2000
Casio Computer Co., Ltd. and Subsidiaries
1. BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTS
The Company and its consolidated domestic subsidiaries
maintain their accounts and records in accordance with the
provisions set forth in the Japanese Commercial Code (the
“Code”) and the Securities and Exchange Law and in confor-
mity with accounting principles and practices generally
accepted in Japan, which are different from the accounting
and disclosure requirements of International Accounting
Standards. The accounts of overseas consolidated sub-
sidiaries are based on their accounting records maintained in
conformity with generally accepted accounting principles and
practices prevailing in the respective countries of domicile.
The accompanying consolidated financial statements are
a translation of the audited consolidated financial statements
of the Company which were prepared in accordance with
accounting principles and practices generally accepted in
Japan from the accounts and records maintained by the
Company and its consolidated subsidiaries and were filed with
the appropriate Local Finance Bureau of the Ministry of
Finance as required by the Securities and Exchange Law.
In preparing the accompanying consolidated financial
statements, certain reclassifications have been made in the
consolidated financial statements issued domestically in order
to present them in a form which is more familiar to readers
outside Japan. The consolidated statements of shareholders’
equity have been prepared for the purpose of inclusion in the
accompanying consolidated financial statements, although
such statements were not required for domestic purposes and
were not filed with the regulatory authorities.
The translations of the Japanese yen amounts into U.S. dol-
lars are included solely for the convenience of readers, using the
prevailing exchange rate at March 31, 2001, which was ¥124 to
U.S.$1.00. The convenience translations should not be construed
as representations that the Japanese yen amounts have been,
could have been, or could in the future be, converted into U.S.
dollars at this or any other rate of exchange.
Certain reclassification has been made in the 2000 consoli-
dated financial statements to conform to the 2001 presentation.
2. SIGNIFICANT ACCOUNTING POLICIES
Consolidation—The accompanying consolidated financial
statements include the accounts of the Company and signifi-
cant subsidiaries (together with the Company, the “Group”)
which the Company controls through majority voting right or
existence of certain conditions. Investments in affiliates of
which the Company has the ability to exercise significant influ-
ence over operating and financial policies, are accounted for
using the equity method.
In the elimination of investments in subsidiaries, the por-
tion of assets and liabilities of a subsidiary attributable to the
subsidiary’s shares acquired by the Company are recorded
based on the fair value as of the respective dates when such
shares were acquired. The amounts of assets and liabilities
attributable to minority shareholders of the subsidiary are
determined using the financial statements of the subsidiary.
Material intercompany balances, transactions and profits
have been eliminated in consolidation.
Cash flow statement—In preparing the consolidated state-
ments of cash flows, cash on hand, readily-available deposits
and short-term highly liquid investments with maturities of
not exceeding three months at the time of purchase are con-
sidered to be cash and cash equivalents.
Foreign currency translation—Short-term receivables and
payables denominated in foreign currencies are translated
into Japanese yen at the year-end rates. Prior to April 1, 2000,
long-term receivables and payable denominated in foreign
currencies were translated at historical rates.
Effective April 1, 2000, the Company and its consolidated
subsidiaries in Japan adopted the revised accounting stan-
dard for foreign currency translation, “Opinion Concerning
Revision of Accounting Standard for Foreign Currency
Translation”, issued by the Business Accounting Deliberation
Council on October 22, 1999 (the “Revised Accounting
Standard”). Under the Revised Accounting Standard, long-
term receivables and payables denominated in foreign
currencies are also translated into Japanese yen at the year-
end rate.
The effect on the consolidated income statement of adopt-
ing the Revised Accounting Standard was to increase income
before income taxes and minority interests by ¥340 million
($2,742 thousand).
Balance sheets of consolidated overseas subsidiaries are
translated into Japanese yen at the year-end rate except for
shareholders’ equity accounts, which are translated at the
historical rates. Statements of income of consolidated over-
seas subsidiaries are translated at average rates.
Due to the adoption of the Revised Accounting Standard,
the Company and its domestic subsidiaries report foreign cur-
rency translation adjustments in the shareholders’ equity and
minority interests. The prior year’s amount, which is included
in assets, has not been reclassified.
Securities—Prior to April 1, 2000, investment securities listed
on exchanges were stated at the lower of cost or market.
Other investments were stated at cost. Cost was principally
determined by the moving-average method.
Effective April 1, 2000, the Company and its consolidated
subsidiaries in Japan adopted the new Japanese accounting
standard “Accounting Standards for Financial Instruments”
(“Opinion Concerning Establishment of Accounting Standard
for Financial Instruments” issued by the Business Accounting
Deliberation Council on January 22, 1999).
As a result, debt securities designated as held-to-maturity
are carried at amortized cost. Equity securities issued by affili-
ates which are not consolidated or accounted for using the