Nintendo 2004 Annual Report Download - page 46

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Years ended March 31, 2004 and 2003
Notes to Consolidated Financial Statements
B. Translation of Foreign Currency Items
In accordance with the Japanese accounting standard, short-term and long-term monetary receivables and payables
denominated in foreign currencies are translated into Japanese yen at the exchange rate in effect at the balance sheet date. The
foreign exchange gains and losses from translation are recognized in the statements of income to the extent that they are not
hedged by forward exchange contracts.
With respect to financial statements of overseas subsidiaries, the balance sheet accounts are translated into Japanese yen at
the exchange rates in effect at the balance sheet date except for shareholders' equity, which are translated at the historical
rates. The average exchange rates for the fiscal period are used for translation of revenue and expenses. The differences
resulting from translation in this manner are included in “Minority Interests” and “Translation adjustments” which are listed in
Shareholders’ Equity in the accompanying consolidated balance sheets.
C. Cash and Cash Equivalents
Cash and cash equivalents include cash on hand, deposit which can be withdrawn on demand, time deposit with an original
maturity of three months or less and certain investments. Investments are defined as those that are easily accessible, with little
risk of fluctuation in value and the maturity date is within three months of the acquisition date.
D. Financial Instruments
Derivatives
All derivatives are stated at fair value, with changes in fair value included in net profit or loss for the period in which they arise.
Securities
Held-to-maturity debt securities are stated at cost after accounting for premium or discount on acquisition, which is amortized
over the period to maturity.
Equity securities of non-consolidated subsidiary and affiliated companies with equity method non-applied are stated at cost.
Other securities for which market quotations are available are stated at fair value. Unrealized gains on other securities
are reported as “Unrealized gains on other securities” in Shareholders’ Equity at a net-of-tax amount, while unrealized losses on
other securities are included in net profit or loss for the period.
Other securities for which market quotations are unavailable are stated at cost, determined by the moving average method
except as stated in the paragraph below.
In case where the fair value of held-to-maturity debt securities, equity securities issued by non-consolidated subsidiaries and
affiliates, or other securities has declined significantly and such impairment of the value is not deemed temporary, those
securities are written down to the fair value and the resulting losses are included in net profit or loss for the period.
Under the Japanese accounting standard, trading securities and debt securities due within one year are presented as “current”
and all the other securities are presented as “non-current.”
E. Inventories
Inventories are stated at the lower of cost, determined by the moving average method, or market.
44
Nintendo Co., Ltd. and consolidated subsidiaries