Nikon 2013 Annual Report Download - page 40

38
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Nikon Corporation and Consolidated Subsidiaries
Year ended March 31, 2013
1. 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 Financial Instruments and Exchange Act 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 applica-
tion and disclosure requirements of International Financial
Reporting Standards.
In preparing these consolidated financial statements, cer-
tain 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.
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 ¥94.05 to $1,
the approximate rate of exchange at March 31, 2013. 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.
2. Summary of Significant Accounting Policies
(a) Consolidation
The consolidated financial statements as of March 31, 2013
include the accounts of the Company and its 71 (68 in 2012)
significant subsidiaries (together, the “Group”). Changes
include addition of Nikon Mexico S.A. de C.V., NIKON DO
BRASIL LTDA., Nikon Instruments (Shanghai) Co., Ltd., and
Nikon Instruments Korea Co., Ltd., and completion of liquida-
tion of 1 subsidiary of Nikon Metrology NV. Under the control
or influence concept, those companies in which the Company,
directly or indirectly, is able to exercise control over operations
are fully consolidated, and those companies over which the
Group has the ability to exercise significant influence are
accounted for by the equity method.
Investments in 2 associated companies (2 associated
companies in 2012) are 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 excess of the cost of acquisition over the fair value
of the net assets of the acquired subsidiaries at the date of
acquisition (Goodwill) is charged to income when incurred,
if the amounts are immaterial; otherwise the amounts are
amortized on a straight-line basis principally over 10 years.
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 also eliminated.
The fiscal year end of Nikon Imaging (China) Co., Ltd.; Nikon
Precision Shanghai Co., Ltd.; Nikon Imaging (China) Sales Co.,
Ltd.; Nikon (Russia) LLC.; Nikon Mexico S.A. de C.V.; NIKON DO
BRASIL LTDA.; and Nikon Instruments (Shanghai) Co., Ltd. is
December 31. In preparing the consolidated financial state-
ments, the Group used financial statements of those compa-
nies that had been prepared on the basis of the provisional
closing of their accounts as of the consolidated closing date.
(b) Unification of Accounting Policies Applied to Foreign
Subsidiaries for the Consolidated Financial Statements
In May 2006, the Accounting Standards Board of Japan
(the “ASBJ”) issued ASBJ Practical Issues Task Force (PITF)
No. 18, “Practical Solution on Unification of Accounting
Policies Applied to Foreign Subsidiaries for the Consolidated
Financial Statements.” PITF No. 18 prescribes (1) the account-
ing policies and procedures applied to a parent company and
its subsidiaries for similar transactions and events under
similar circumstances should in principle be unified for the
preparation of the consolidated financial statements; (2) finan-
cial statements prepared by foreign subsidiaries in accordance
with either International Financial Reporting Standards or the
generally accepted accounting principles in the United States
of America tentatively may be used for the consolidation pro-
cess; (3) however, the following items should be adjusted in the
consolidation process so that net income is accounted for in
accordance with Japanese GAAP, unless they are not material:
1) amortization of goodwill; 2) scheduled amortization of
actuarial gain or loss of pensions that has been directly
recorded in equity; 3) expensing capitalized development
costs of R&D; 4) cancellation of the fair value model of
accounting for property, plant and equipment and invest-
ment properties and incorporation of the cost model of
accounting; and 5) exclusion of minority interests from net
income, if contained in net income.