Casio 2010 Annual Report Download - page 29

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Annual Report 2010
Notes to Consolidated Financial Statements
Years ended March 31, 2010 and 2009 Casio Computer Co., Ltd. and Subsidiaries
1. Basis of Presenting Consolidated Financial Statements
The accompanying consolidated financial statements of CASIO COMPUTER CO., LTD. (“the Company”) and its consolidated
subsidiaries have been prepared in accordance with the provisions set forth in the Japanese Financial Instruments and Exchange Law
and its related accounting regulations, and in conformity with accounting principles generally accepted in Japan (“Japanese GAAP”),
which are different in certain respects as to application and disclosure requirements from International Financial Reporting Standards.
As discussed in Note 3. (1), effective from the fiscal year ended March 31, 2009, “Practical Solution on Unification of
Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (ASBJ Practical Issues Task Force No. 18)
issued by the Accounting Standard Boards of Japan on May 17, 2006 has been applied. In accordance with this solution, required
adjustments are made based on their accounting records for the preparation of consolidated financial statements.
The accompanying consolidated financial statements have been restructured and translated into English (with certain expanded
disclosure) from the consolidated financial statements of the Company prepared in accordance with Japanese GAAP and filed with
the appropriate Local Finance Bureau of the Ministry of Finance as required by the Financial Instruments and Exchange Law. Certain
supplementary information included in the statutory Japanese language consolidated financial statements, but not required for fair
presentation, is not presented in the accompanying consolidated financial statements.
The translation of the Japanese yen amounts into U.S. dollars is included solely for the convenience of readers outside Japan,
using the prevailing exchange rate at March 31, 2010, which was ¥93 to U.S.$1. The convenience translation should not be
construed as representation 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.
2. Significant 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 existence of certain conditions.
Stocks of 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 assets of investments in subsidiaries at acquisition is
included in other assets and is amortized on a straight-line basis over five years.
Cash flow statements
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 net assets as foreign currency translation adjustments.
Securities
Debt securities designated as held-to-maturity are carried at amortized cost. Other securities except for trading securities (“available-
for-sale securities”) for which fair value is readily determinable are stated at fair 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 net assets. The cost of such securities sold is determined primarily by the moving-average method. Available-for-sale
securities for which fair 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 hedges and meet certain hedging criteria, the Group defers recognition of gains
or losses resulting from changes in the fair value of derivative financial instruments until the related losses or gains on the hedged
items are recognized.