Mitsubishi 1999 Annual Report Download - page 44

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Mitsubishi Motors Corporation and Consolidated Subsidiaries
Notes to Consolidated Financial Statements
March 31, 1999
Notes to consolidated financial statements
42
1. Significant Accounting Policies
(a) Basis of presentation
Mitsubishi Motors Corporation ("MMC") and its domestic subsidiaries maintain their books of account in conformity
with the financial accounting standards of Japan, and its foreign subsidiaries, in conformity with those of the countries
of their domicile.
The accompanying consolidated financial statements have been prepared in accordance with accounting principles and
practices generally accepted in Japan and have been compiled from the consolidated financial statements filed with the
Ministry of Finance as required by the Securities and Exchange Law of Japan and include certain additional financial
information for the convenience of readers outside Japan. Consolidated statements of cash flows have been prepared for
the purpose of inclusion in these consolidated financial statements, although such statements are not currently required in
Japan.
As permitted, amounts of less than one million yen have been omitted. Consequently, the totals shown in the
accompanying consolidated financial statements (both in yen and U.S. dollars) do not necessarily agree with the sum
of the individual amounts.
(b) Principles of consolidation
The accompanying consolidated financial statements include the accounts of MMC and its significant subsidiaries.
All significant intercompany transactions and accounts have been eliminated in consolidation.
Investments in certain unconsolidated subsidiaries and affiliates (companies owned 20% to 50%) have, with certain
minor exceptions, been accounted for by the equity method.
The difference at the time of acquisition between the cost and underlying net equity of investments in consolidated
subsidiaries and other companies accounted for by the equity method is, as a rule, amortized after appropriate
adjustments over a period of five years, except for a certain acquisition which is being amortized over a period of ten
years.
(c) Cash and cash equivalents
All highly liquid investments with original maturities of three months or less when purchased are considered cash
equivalents.
(d) Inventories
Inventories of MMC are principally stated at cost determined by the first-in, first-out method.
Inventories of the consolidated subsidiaries are principally stated at specific-identification cost, at the lower of cost
determined by the specific-identification method or market, or at the latest purchase price.
(e) Marketable securities and investments in securities
Marketable equity securities listed on stock exchanges are, with minor exceptions, stated at the lower of cost or market,
cost being determined by the moving average method.
Other marketable securities are stated at cost determined by the moving average method.
Investments in securities are stated at cost determined by the moving average method.