Olympus 2011 Annual Report Download - page 44

42 OLYMPUS 2011
(n) TRANSLATION OF FOREIGN CURRENCY FINANCIAL STATEMENTS
In accordance with the accounting standards for foreign currency translations, the balance sheet accounts of the foreign consolidated
subsidiaries are translated at exchange rates at the balance sheet date. Net assets excluding minority interests are translated at historical
exchange rates. Revenues and expenses are translated at average exchange rates for each corresponding fiscal year. Differences arising
from translation are presented as “Foreign currency translation adjustments” in a separate component of net assets.
2. CHANGES IN ACCOUNTING POLICIES
(a) NET SALES AND COST OF SALES ON INVESTMENT SECURITIES FOR BUSINESS INCUBATIONS
Until the year ended March 31, 2009, proceeds from the sale of investment securities for business incubations were recorded as net sales
and the book values of the securities sold and valuation losses, etc. were recorded as cost of sales. Due to the changes in the investment
policy, from the fiscal year ended March 31, 2010, income/loss from such sales is recorded as other income (expenses).
The effect which this change has on the consolidated statements of operations was not material.
(b) ASSET RETIREMENT OBLIGATIONS
In the year ended March 31, 2011, the Company has adopted “Accounting Standard for Asset Retirement Obligations” (ASBJ Statement
No. 18, issued on March 31, 2008), and “Guidance on Accounting Standard for Asset Retirement Obligations” (Guidance No. 21, issued on
March 31, 2008).
The effect which this change has on the consolidated statements of operations was not material.
(c) ACCOUNTING STANDARD FOR BUSINESS COMBINATIONS AND OTHERS
In the year ended March 31, 2011, the Company has adopted “Accounting Standard for Business Combinations” (ASBJ Statement
No. 21, issued on December 26, 2008), “Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22, issued
on December 26, 2008), “Partial amendments to Accounting Standard for Research and Development” (ASBJ Statement No. 23, issued
on December 26, 2008), Revised “Accounting Standard for Business Divestitures” (ASBJ Statement No. 7, revised on December 26, 2008),
Revised “Accounting Standard for Equity Method of Accounting for Investments” (ASBJ Statement No. 16, revised on December 26, 2008),
and Revised “Guidance on Accounting Standard for Business Combinations and Accounting Standard for Business Divestitures” (ASBJ
Guidance No. 10, revised on December 26, 2008).
(d) COMPREHENSIVE INCOME
In the year ended March 31, 2011, the Company adopted the “Accounting Standard for Presentation of Comprehensive Income (ASBJ
Statement No. 25 issued on June 30, 2010). In accordance with this new standard, consolidated statements of comprehensive income for
the year ended March 31, 2010 and 2009 are not presented. The comparative information for the year ended March 31, 2010 is disclosed in
Note 24.
In this connection, pension liability adjustment which had previously been included in retained earnings was reclassified and separately
presented in the consolidated statements of changes in net assets.
3. RECLASSIFICATIONS
(Consolidated Statements of Cash Flows)
(a) Payments for purchase of treasury stock
In the year ended March 31, 2010, “Payments for purchase of treasury stock” in the amount of ¥21 million was included in “Other” of Cash
Flows from Financing Activities due to its immateriality.
4. FINANCIAL INSTRUMENTS
Overview
(1) Policy for financial instruments
In consideration of plans for capital investment, the Company and its consolidated subsidiaries (collectively, the “Group”) raise funds
through bank borrowings and issuance of bond. The Group manages temporary cash surpluses through low-risk financial assets. Further,
the Group raises short-term capital through bank borrowings. The Group uses derivatives for the purpose of reducing risk and does not
enter into derivatives for speculative or trading purposes.
(2) Types of financial instruments and related risk
Trade receivables—notes and accounts receivable —are exposed to credit risk in relation to customers. In addition, the Group is exposed to
foreign currency exchange risk arising from receivables denominated in foreign currencies. In principle, the foreign currency exchange risks
deriving from the trade receivables denominated in foreign currencies are hedged by forward foreign exchange contracts.
Marketable securities and investment securities are exposed to market risk. Those securities are composed of mainly the shares of
common stock of other companies with which the Group has business relationships or affiliated companies and the investment trust fund.
The Group has also loans receivable from affiliated companies accounted for by the equity method.