Nintendo 2014 Annual Report Download - page 27

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- 25 -
Significant matters forming the basis of preparing the consolidated financial statements
1. Scope of consolidation
(1) Number of consolidated subsidiaries: 27 companies
The names of significant consolidated subsidiaries are omitted because they are provided in “I. Overview of
the Company, 3. Subsidiaries and associates.”
Mobiclip K.K. has been excluded from the scope of consolidation from the fiscal year ended March 31, 2014
as its liquidation was completed.
(2) The significant unconsolidated subsidiary is Fukuei Co., Ltd.
The above is unconsolidated because it is a small-scale company and none of its total assets, net sales, net
income or loss, retained earnings or other items have a significant impact on the consolidated financial
statements.
2. Application of the equity method
(1) Number of associates accounted for under the equity method: 5 companies
Name of significant associates accounted for under the equity method
The Pokémon Company, WARPSTAR, Inc., PUX Corporation
PUX Corporation has been included in the scope of associates accounted for under the equity method from
the fiscal year ended March 31, 2014, due to a new acquisition of shares.
(2) The significant company among the unconsolidated subsidiaries and associates not accounted for under the
equity method is Fukuei Co., Ltd. This is because the impact it has on net income or loss, retained earnings,
etc., is negligible, and it is immaterial as a whole.
(3) With respect to associates accounted for under the equity method whose account closing dates differ from the
consolidated account closing date, the financial statements of each of the companies, either based on their
fiscal year or based on provisional accounts closing, are incorporated.
3. Year-ends of consolidated subsidiaries
Of consolidated subsidiaries, Nintendo Phuten Co., Ltd., iQue (China) Ltd., Nintendo RU LLC. and three other
subsidiaries close accounts on December 31 every year.
As the difference between closing dates is within three months, the above subsidiaries were accounted for based on
the financial statements as of the account closing date of each subsidiary. Necessary adjustments were made to the
consolidated financial statements to reflect any significant transactions that took place between their account
closing dates and the consolidated account closing date.
4. Accounting policies
(1) Valuation basis and method for important assets
(i) Securities
For held-to-maturity debt securities, the amortized cost method (straight-line method) is used. For other
securities with market quotations, the market price method based on the market price, etc., on the account
closing date is used (valuation difference is reported as a component of net assets and the cost of sales is
calculated using the moving average method), and securities without market quotations are stated at cost
using the moving-average method.
(ii) Derivatives
The fair value method is applied.
(iii) Inventories
They are mainly stated at cost using the moving-average method (the figures shown in the balance sheets
have been calculated by writing them down based on decline in profitability).