Olympus 2004 Annual Report Download - page 37

O LYMPUS 2 0 0 4 3 5
1 . SUMMARY O F SIG NIFICAN T ACCO UNTING PO LICIES
(a) BASIS O F PRESEN TIN G CO NSO LIDATED FIN ANCIAL STATEMEN TS
O lympus Co rpo ration (the “ Co mpany”) and its consolidated domestic subsidiaries mainta in their accounts and reco rds in accordance with the
pro visions set forth in the Co mmercial Co de o f Japan (the “Code”), the Japanese Securities and Exchange Law and its related acco unting reg-
ulations and in co nfo rmity with accounting principles generally accepted in Japan, which are different in certain respects as to application
and disclo sure requirements o f International Financial Repo rting Standards. The accounts of o verseas subsidiaries are b ased o n their account-
ing reco rds maintained in conformity with generally accepted accounting principles prevailing in the respective co untries o f domicile.
The acco mpanying conso lidated financial statements are a translation o f the audited consolidated financial statements o f the Co mpany
which were prepared in accordance with acco unting principles and practices g enerally accepted in Ja pan from the acco unts and reco rds
maintained by the Co mpany and its co nsolidated subsidiaries and were filed with the appro priate Lo cal Finance Bureau of the Ministry o f
Finance as required by the Securities and Exchange Law. In preparing the accompanying consolidated financial statements, certain reclassifi-
cations have been ma de in the statuto ry Japanese languag e co nsolidated financial statements in order to present them in a form which is
more familiar to readers outside Japan.
In the year ended March 3 1 , 2 0 0 4 , the Co mpany did not ado pt early the new accounting standard for impairment o f fixed Assets
(“O pinio n Concerning Establishment o f Acco unting Standard fo r Impairment o f Fixed Assets” issued by the Business Accounting Deliberation
Co uncil on August 9, 200 2 ) and the implementation guidance fo r acco unting standard fo r impairment of fixed assets (the Financial
Acco unting Standard Implementation G uidance N o.6 issued by the Accounting Standards Bo ard o f Japan on O cto ber 3 1, 2003 ). The
Co mpany believes that ado ptio n of this new accounting standard will have no material impact on its financial statements.
The translation of the Japanese yen amounts into U.S. dollars are included solely fo r the co nvenience o f readers o utside Japan, using the
exchange rate o f ¥110 to US$ 1 .0 0 . The co nvenience translations should no t be co nstrued as representations that the Japanese yen amounts
have been, co uld have been, o r could in the future be, co nverted into U.S. dollars at this or any o ther rate o f exchang e.
(b) PRIN CIPLES O F CO NSO LIDATIO N AN D ACCO UNTING FO R IN VESTMEN TS IN UN CO N SO LIDATED SUBSIDIARIES AND AFFILIATES
The acco mpanying conso lidated financial statements include the acco unts of the Co mpany and its significant subsidiaries. All significant inter-
co mpany balances and transactions have been eliminated in the co nsolidatio n.
The Co mpany co nsolidates all significant investees which were contro lled thro ugh substantial o wnership o f majo rity voting rights or exis-
tence o f certain conditions.
Investments in certain unco nso lidated subsidiaries and affiliated co mpanies in which the Co mpany has significant influence, but less than
a contro lling interest, are acco unted fo r using the equity method. Investments in co mpanies in which the Co mpany does no t have significant
influence are accounted for at co st. The differences between acquisitio n co st and underlying net equity at the time of acquisition are gener-
ally being amo rtized o n the straight-line method o ver five years.
(c) FO REIG N CURRENCY TRAN SACTIO N
Assets and liabilities denominated in foreign currencies are translated into Japanese yen at exchange rates at the balance sheet date in
accordance with the acco unting standards for Fo reign Currency Translations (“O pinion Co ncerning Establishment o f Acco unting Standard for
Fo reign Currency Translations” issued by the Business Accounting Deliberation Co uncil o n O ctober 2 2 , 1 9 9 9 ), effective from the year ended
March 3 1 , 2 0 0 1 .
(d) TRAN SLATIO N O F FO REIGN CURREN CY FIN ANCIAL STATEMEN T
In accordance with the acco unting standards for foreign currency translations, assets and liabilities deno minated in foreign functio nal curren-
cies are translated at exchange rates at the balance sheet date. Shareho lders’ equity acco unts are translated at histo rical exchange rates.
Revenue and expenses denominated in foreign functio nal currencies are translated at averag e exchange rates fo r the each fiscal year.
Effective for the year ended March 3 1, 2001 , differences resulting fro m translation are presented as “ Foreign currency translation adjust-
ments” in Shareholders’ equity o f the acco mpanying consolidated balance sheets.
(e ) CASH AN D CASH EQ UIVALENTS
In preparing the consolidated statements o f cash flows, cash o n hand, readily-available deposits and short-term highly liquid investments with
maturities o f no t exceeding three months at the time of purchase are co nsidered to be cash and cash equivalents.
(f) MARKETABLE AND IN VESTMENT SECURITIES
Effective April 1 , 2000, the Co mpany and its co nsolidated subsidiaries ado pted the Japanese accounting standard o n accounting fo r finan-
cial instruments (“O pinion Co ncerning Establishment o f Acco unting Standard fo r Financial Instruments” issued by the Business Acco unting
Deliberatio n Council on January 22, 1 9 9 9 ).
NO TES TO THE CO N SO LIDATED FINANCIAL STATEMENTS
O lympus Corporation and Consolidated Subsidiaries
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