Nikon 2001 Annual Report Download - page 23

page 21
1. BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements have been prepared in accordance with the provisions set forth in the Securities and
Exchange Law of Japan 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 con-
solidated financial statements are not intended to present the financial position, results of operations and cash flows in accordance with
accounting principles and practices generally accepted in countries and jurisdictions other than Japan.
In preparing these consolidated financial statements, certain reclassifications and rearrangements have been made to the consolidated
financial statements issued domestically in order to present them in a form which is more familiar to readers outside Japan. In accordance with
accounting procedures generally accepted in Japan, certain comparative disclosures are not required to be and have not been presented herein.
The consolidated financial statements are stated in Japanese yen, the currency of the country in which Nikon Corporation (the “Company”)
is incorporated and operates. The translations of Japanese yen amounts into U.S. dollar amounts are included solely for the convenience of
readers outside Japan and have been made at the rate of ¥123.90 to U.S.$1, the rate of exchange at March 31, 2001. Such translations should
not be construed as representations that the Japanese yen amounts could be converted into U.S. dollars at that or any other rate.
Certain reclassifications have been made in 2000 financial statements to conform to classification used in 2001.
2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) Consolidation
The consolidated financial statements as of March 31, 2001 include the accounts of the Company and its 41 significant (33 in 2000) subsidiaries
(collectively the “Group”). Under the control or influence concept, those companies in which the Company, directly or indirectly, is able to exer-
cise control over operations are fully consolidated, and those companies over which the Company has the ability to exercise significant influ-
ence are accounted for by the equity method.
An investment in 1 associated company (3 unconsolidated subsidiaries and 1 associated company in 2000) is accounted for by the equity
method. Investments in the remaining unconsolidated subsidiaries and associated companies are stated at cost. If the equity method of
accounting had been applied to the investments in these companies, the effect on the accompanying consolidated financial statements would
not be material.
The differences between the cost and underlying net equity of investments in consolidated subsidiaries and an associated company
accounted for by the equity method at acquisition (“Goodwill”) are insignificant and are charged to income when incurred.
All significant intercompany balances and transactions have been eliminated in consolidation. All material unrealized profit included in
assets resulting from transactions within the Group is eliminated.
(b) Cash Equivalents
Cash equivalents are short-term investments that are readily convertible into cash and that are exposed to insignificant risk of changes in value.
Cash equivalents include time deposits, certificate of deposits, commercial paper and mutual funds investing in bonds that represent
short-term investments, all of which mature or become due within three months of the date of acquisition.
(c) Marketable and Investment Securities
Prior to April 1, 2000, marketable securities and investments in securities were stated principally at cost as determined using the average
method. Effective April 1, 2000, the Group adopted a new accounting standard for financial instruments, including marketable and investment
securities. The standard requires all applicable securities to be classified and accounted for, depending on management’s intent, as follows:
i) Trading securities, which are held for the purpose of earning capital gains in near term are reported at fair value, and the related unreal-
ized gains and losses are included in the earnings,
ii) Held-to-maturity debt securities, which are expected to be held to maturity with the positive intent and ability to hold to maturity are
reported at amortized cost method and
iii) Available-for-sale-securities, which are not classified as either of the aforementioned securities, are reported at fair value, with unreal-
ized gains and losses, net of applicable taxes, reported in a separate component of shareholders’ equity.
Available-for-sale-securities whose fair value is not readily determinable are stated principally at moving-average cost method.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Nikon Corporation and Consolidated Subsidiaries
Years ended March 31, 2001 and 2000