Fujitsu 2001 Annual Report Download - page 33

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1. Significant Accounting Policies
(a) Basis of presenting consolidated financial statements
The accompanying consolidated financial statements of Fujitsu Limited (the “Company”) and its consolidated
subsidiaries (together, the “Group”) have been prepared in accordance with accounting principles and practices
generally accepted in Japan and the regulations under the Securities and Exchange Law of Japan. The accounting
principles and practices adopted by the consolidated subsidiaries outside Japan in their respective countries basically
conform to those adopted by the Company. In presenting the accompanying consolidated financial statements, certain
items have been reclassified for the convenience of readers outside Japan.
The differences between the accounting principles and practices adopted by the Group and those prescribed by
International Accounting Standards (“IAS”) are set forth in Note 2.
(b) Principles of consolidation
The consolidated financial statements include the accounts of the Company and, with minor exceptions, those of its
majority-owned subsidiaries.
The acquision of companies is accounted for by the purchase method. Goodwill represents the excess of the
acquisition cost over the fair value of the net assets of the acquired companies.
Investments in affiliates, with minor exceptions, are accounted for by the equity method.
(c) Cash equivalents
For the purpose of the statement of cash flows, the Group considers all short-term, highly liquid instruments with
a maturity of three months or less to be cash equivalents.
(d) Translation of foreign currency accounts
Receivables and payables, regardless of whether they are current or non-current items, denominated in foreign
currencies are translated into Japanese yen at the foreign currency exchange rates in effect at the respective balance
sheet dates.
The assets and liabilities accounts of the consolidated subsidiaries outside Japan are translated into Japanese yen at
the exchange rates in effect at the respective balance sheet dates. Income and expense accounts are translated at the
average exchange rate during the year. The resulting translation adjustments are recorded in a separate component of
shareholders' equity as foreign currency translation adjustments.
For the year ended March 31, 2001, non-current receivables and payables denominated in foreign currencies were
translated into Japanese yen at the exchange rate in effect at the balance sheet date in accordance with a revised
accounting standard in Japan for foreign currency translation. The amounts in the financial statements prior to and for
the year ended March 31, 2000, remained translated at their transaction rates and have not been restated. However,
this change did not have a material impact on the financial statements.
This standard also requires that translation adjustments arising from the translation of the financial statements of the
consolidated subsidiaries be stated as a component of shareholders' equity. The amounts in the financial statements
prior to and for the year ended March 31,2000 have been restated.
(e) Revenue recognition
Revenues from sales of communications products and computer systems are generally recognized upon acceptance by
the customers, whereas revenues from sales of personal computers, peripherals, other equipment and electronic
devices are recognized when the products are shipped.
(f) Marketable securities
Marketable securities included in short-term investments and investments and long-term loans are classified as either
held-to-maturity investments, which are debt securities which the Group has the positive intent and ability to hold to
maturity, or available-for-sale securities, which are stocks and securities not classified as held-to-maturity. Held-to-
maturity investments are stated at amortized cost, adjusted for the amortization of premium or the accretion of
discounts to maturity. Available-for-sale securities are carried at fair market value, with the unrealized gain or loss, net
of taxes, reported in a separate component of shareholders' equity.
The Group has adopted a new accounting standard in Japan for financial instruments, effective April 1, 2000. The
amounts in the financial statements prior to and for the year ended March 31,2000, have not been restated. The
adoption of this standard, however, did not have a material impact on the financial statements, except for an increase
of ¥33,640 million ($271,290 thousand) of investments and long-term loans, ¥14,605 million ($117,782 thousand) of
other long-term liabilities and ¥19,035 million ($153,508 thousand) of unrealized gains, net of taxes in shareholders'
equity.
Notes to C onsolidated Financial S tatements