Casio 2012 Annual Report Download - page 24

Notes to Consolidated Financial Statements
Years ended March 31, 2012 and 2011 Casio Computer Co., Ltd. and Consolidated 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.
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, 2012, which is ¥82 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 are 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 subsidiar-
ies 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 net assets as foreign currency translation
adjustment and minority interests.
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 instru-
ments 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 instru-
ments until the related losses or gains on the hedged items are recognized.
Also, if interest rate swap contracts are used as hedges and meet certain hedging criteria, the net
amount to be paid or received under the interest rate swaps is added to or deducted from the interest on
the assets or liabilities for which the swap contract is executed.
The Group uses forward foreign currency contracts and interest rate swaps as derivative financial
instruments only for the purpose of mitigating future risks of fluctuations of foreign currency exchange
rates with respect to foreign currency assets and liabilities and of interest rate increases with respect to
cash management.
Forward foreign currency and interest rate swap contracts are subject to risks of foreign currency
exchange rate changes and interest rate changes, respectively.
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CASIO Annual Report 2012
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