Nikon 2015 Annual Report Download - page 53

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NIKON REPORT 2015
Financial and Corporate Data
Notes to Consolidated Financial Statements
Nikon Corporation and Consolidated Subsidiaries
Year ended March 31, 2015
1. Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated nancial 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 cer-
tain respects as to application and disclosure requirements of
International Financial Reporting Standards.
In preparing these consolidated nancial statements, certain
reclassications and rearrangements have been made to the consol-
idated nancial statements issued domestically in order to present
them in a form that is more familiar to readers outside of Japan. In
addition, certain reclassications have been made in the 2014
nancial statements to conform to the classications used in 2015.
The consolidated nancial 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 of Japan and have been
made at the rate of ¥120.17 to $1, the approximate rate of
exchange at March 31, 2015. Such translations should not be con-
strued as representations that the Japanese yen amounts could be
converted into U.S. dollars at that or any other rate.
2. Summary of Signicant Accounting Policies
(a) Consolidation
The consolidated nancial statements as of March 31, 2015, include
the accounts of the Company and its 75 (70 in 2014) signicant sub-
sidiaries (together, the “Group”). Changes include addition of Nikon
Imaging Systems Inc.; Nikon Lao Co., Ltd.; Nikon Middle East FZE;
PT NIKON INDONESIA; Nanjing Nikon Jiangnan Optical Instrument
Co., Ltd.; Nikon Asia Pacic Pte. Ltd. and exclusion of LK Investment
Ltd. Under the control or inuence 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 signicant inuence are
accounted for by the equity method.
Investments in 2 associated companies in 2014 and 2015 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 con-
solidated nancial statements would not be material.
The excess of the cost of an 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 signicant intercompany balances and transactions have been
eliminated in consolidation. All material unrealized prot included in
assets resulting from transactions within the Group has also been
eliminated.
The scal 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.; Nikon Instruments (Shanghai) Co., Ltd.; Hikari Glass
(Changzhou) Optics Co., Ltd.; Nikon Lao Co., Ltd. and Nanjing Nikon
Jiangnan Optical Instrument Co., Ltd. is December 31. In preparing the
consolidated nancial statements, the Group used nancial statements
of those companies that had been prepared on the basis of the provi-
sional closing of their accounts as of the consolidated closing date.
(b) Unication 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 Unication of Accounting Policies Applied to Foreign
Subsidiaries for the Consolidated Financial Statements.” PITF No. 18
prescribes (1) the accounting policies and procedures applied to a
parent company and its subsidiaries for similar transactions and
events under similar circumstances should in principle be unied for
the preparation of the consolidated nancial statements; (2) nancial
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 process; (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 amor-
tization of actuarial gain or loss of pensions that has been recorded in
equity through other comprehensive income; 3) expensing capitalized
development costs of R&D; 4) cancellation of the fair value model of
accounting for property, plant and equipment and investment proper-
ties and incorporation of the cost model of accounting; and 5) exclu-
sion of minority interests from net income, if contained in net income.
(c) Business Combinations
In September 2013, the ASBJ issued revised ASBJ Statement No.
21, “Accounting Standard for Business Combinations,” revised
ASBJ Guidance No. 10, “Guidance on Accounting Standards for
Business Combinations and Business Divestitures,” and revised
ASBJ Statement No. 22, “Accounting Standard for Consolidated
Financial Statements.” Major accounting changes are as follows:
(i) Transactions with noncontrolling interest—A parent’s owner-
ship interest in a subsidiary might change if the parent pur-
chases or sells ownership interests in its subsidiary. The
carrying amount of minority interest is adjusted to reect the
change in the parent’s ownership interest in its subsidiary
while the parent retains its controlling interest in its subsidiary.