Nikon 2016 Annual Report Download - page 57

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NIKON REPORT 2016
Notes to Consolidated Financial Statements
Nikon Corporation and Consolidated Subsidiaries
Year ended March 31, 2016
1. Basis of Presentation of Consolidated Financial Statements
The accompanying consolidated nancial statements have been pre-
pared 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 application and disclosure requirements of International
Financial Reporting Standards.
In preparing these consolidated nancial statements, certain reclas-
sications and rearrangements have been made to the consolidated
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 2015 nancial state-
ments to conform to the classications used in 2016.
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 ¥112.68 to $1, the approximate rate of exchange at
March 31, 2016. Such translations should not be construed as repre-
sentations 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, 2016 include
the accounts of the Company and its 84 (75 in 2015) signicant
subsidiaries (together, the “Group”). Changes include addition of
Optos Plc, Nikon CeLL innovation Co., Ltd., etc., and exclusion of one
subsidiary. Under the control and inuence concepts, those compa-
nies 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 2015 and 2016 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 invest-
ments in these companies, the effect on the accompanying consolidated
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 amortized on a straight-line basis principally over 10 years; other-
wise, it is charged to income when incurred if the amounts are
immaterial.
All signicant intercompany balances and transactions have been
eliminated in consolidation. All material unrealized prot or loss
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 provisional
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,” which was
subsequently revised in February 2010 and March 2015 to reect
revisions of the relevant Japanese GAAP or accounting standards in
other jurisdictions. PITF No. 18 prescribes that 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. However, nancial statements prepared by foreign subsid-
iaries in accordance with either International Financial Reporting
Standards or generally accepted accounting principles in the United
States of America (Financial Accounting Standards Board Accounting
Standards Codication—“FASB ASC”) tentatively may be used for the
consolidation process, except for the following items that 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 recorded in equity through other
comprehensive income; 3) expensing capitalized development costs
of R&D; and 4) cancellation of the fair value model of accounting for
property, plant and equipment and investment properties and
incorporation of the cost model of accounting.
(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:
FINANCIAL AND CORPORATE DATA