Casio 2002 Annual Report Download - page 21

1BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTS
The Company and its consolidated domestic subsidiaries maintain their accounts and records in accordance with the provi-
sions set forth in the Japanese Commercial Code (the “Code”) and the Securities and Exchange Law and in conformity
with accounting principles and practices generally accepted in Japan. The accounts of overseas consolidated subsidiaries
are based on their accounting records maintained in conformity with generally accepted accounting principles and prac-
tices prevailing in the respective countries of domicile. Certain accounting principles and practices generally accepted in
Japan are different from International Accounting Standards and standards in other countries in certain respects as to
application and disclosure requirements. Accordingly, the accompanying consolidated financial statements are intended
for use by those who are informed about Japanese accounting principles and practices.
The accompanying consolidated financial statements have been restructured and translated into English (with some
expanded descriptions and the inclusion of statements of shareholders’ equity) from the consolidated financial statements
of the Company prepared in accordance with accounting principles and practices generally accepted in Japan and filed
with the appropriate Local Finance Bureau of the Ministry of Finance as required by the Securities and Exchange Law.
Some supplementary information included in the statutory Japanese language consolidated financial statements, but not
required for fair presentation is not presented in the accompanying financial statements.
The translations of the Japanese yen amounts into U.S. dollars are included solely for the convenience of readers, using
the prevailing exchange rate at March 31, 2002, which was ¥133 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 2001 consolidated financial statements to conform to the 2002 presentation.
2SIGNIFICANT ACCOUNTING POLICIES
Consolidation The accompanying consolidated financial statements include the accounts of the Company and significant
subsidiaries (together with the Company, the “Group”) which the Company controls through majority voting right or exis-
tence of certain conditions. Investments in affiliates of which the Company has the ability to exercise significant influence
over operating and financial policies, are accounted for using the equity method.
In the elimination of investments in subsidiaries, the portion 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.
The difference between the cost and underlying fair value of the net equity of investments in subsidiaries at acquisition
is included in other assets and is amortized on a straight-line basis over five years.
Cash flow statement In preparing the consolidated statements 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 considered
to be cash and cash equivalents.
Foreign currency translation All monetary assets and liabilities denominated in foreign currencies are translated at the
current exchange rates at the balance sheet date, and the translation gains and losses are credited or charged to income.
Assets and liabilities of foreign subsidiaries are translated into yen at the current exchange rate at the balance sheet
date while their revenue and expenses are translated at the average exchange rate for the period. Differences arising from
such translation are included in minority interests and shareholders’ equity as foreign currency translation adjustments.
Securities Debt securities designated as held-to-maturity are carried at amortized cost. Other securities except for trading
securities (hereafter, “available-for-sale securities”) for which market value is readily determinable are stated at market
value as of the end of the period with unrealized gains and losses, net of applicable deferred tax assets or liabilities, not
reflected in earnings but directly reported as a separate component of shareholders’ equity. The cost of such securities sold
is determined primarily by the moving-average method. Available-for-sale securities for which market value is not readily
determinable are stated primarily at moving-average cost except for debt securities, which are stated at amortized cost.
Derivatives and hedge accounting The accounting standard for financial instruments requires companies to state
derivative financial instruments at fair value and to recognize changes in the fair value as gains or losses unless derivative
financial instruments are used for hedging purposes.
If derivative financial instruments are used as hedge and meet certain hedging criteria, the Group defer recognition of
gains or losses resulting from changes in fair value of derivative financial instruments until the related losses or gains on
the hedged items are recognized.
Also, if interest rate swap contracts are used as hedge and meet certain hedging criteria, the net amount to be paid
or received under the interest rate swap contract is added to or deducted from the interest on the assets or liabilities for
which the swap contract was executed.
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NOTES TO Consolidated Financial Statements
Years ended March 31, 2002 and 2001
Casio Computer Co., Ltd. and Subsidiaries