Nikon 1998 Annual Report Download - page 23

Nikon Corporation 21
 Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in the Japanese
Securities and Exchange Law and its related accounting regulations, and in conformity with accounting principles and practices
generally accepted in Japan, which are different in certain respects as to application and disclosure requirements of International
Accounting Standards.
The consolidated statements of cash flows are not required as a part of the basic financial statements in Japan but are presented
herein as additional information.
In accordance with the Securities and Exchange Law, the Japanese yen amounts are presented in millions of yen and are rounded
down to the nearest million yen. Certain totals may not correspond exactly to the addition of a column due to such rounding down.
U.S. dollar amounts are shown solely for the convenience of readers and are translated at the rate of ¥132.10 to $1.00, the
exchange rate prevailing at March 31, 1998.
 Significant Accounting Policies
(a) Consolidation Policies
The consolidated financial statements include the accounts of Nikon Corporation (the Company) and all of its significant majority-
owned domestic and foreign subsidiaries.
All significant intercompany accounts, transactions and unrealized profits or losses have been eliminated in consolidation.
The excess of cost of investments in consolidated subsidiaries over the equity in net assets at the time of acquisition is amortized
on a straight-line basis over five years.
The fiscal years of all consolidated subsidiaries end on March 31, the fiscal year-end of the Company.
Investments in certain unconsolidated subsidiaries and 20%- to 50%-owned associated companies are accounted for by the equity
method. The excess of cost of investments in such unconsolidated subsidiaries and associated companies over the equity in net
assets at the time of acquisition is amortized on a straight-line basis over five years.
(b) Translation of Foreign Currency Financial Statements
The balance sheet accounts and revenue and expense accounts of the consolidated overseas subsidiaries are translated into yen
at the current exchange rates as of the balance sheet date except for shareholders’ equity, which is translated at the historical
exchange rates. The differences resulting from such translations are reflected in the accompanying consolidated balance sheets
as Investments and other assets, “Other assets.”
(c) Cash and Cash Equivalents
Cash and cash equivalents include cash, time deposits and marketable securities presented in current assets.
(d) Marketable Securities and Investments in Securities
Marketable securities and investments in securities are stated principally at cost, cost being determined using the moving-average
method.
(e) Inventories
Inventories of the Company and domestic consolidated subsidiaries are stated at cost, cost being determined principally using the
average method. Cost for work in process is determined primarily by the specific identification method. Inventories of foreign consolidated
subsidiaries are stated principally at the lower of cost or market, cost being determined principally using the first-in, first-out method.
(f) Property, Plant and Equipment
Property, plant and equipment are stated at cost. Depreciation of property, plant and equipment of the Company and domestic con-
solidated subsidiaries is computed using the declining-balance method at rates based on the estimated useful lives of the assets.
Depreciation of property, plant and equipment of foreign consolidated subsidiaries is computed using the straight-line method
at rates based on the estimated useful lives of the assets.
Major renewals and improvements are capitalized. Normal repair and maintenance expenses are charged to income as incurred.
(g) Liability for Severance Indemnities and Pension Plans
The Company, foreign consolidated subsidiaries and certain domestic consolidated subsidiaries have funded pension plans which
cover substantially all of their employees. Pension costs are charged to income as accrued.
Other domestic consolidated subsidiaries have unfunded severance payment plans which provide lump-sum severance indemnities to
substantially all of their employees terminating their employment. The amounts of the indemnities are based generally on years of
service and the rate of pay at the time of termination. These subsidiaries record provisions for such indemnities in accordance with
applicable tax regulations.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Nikon Corporation and Consolidated Subsidiaries
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