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NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
Olympus Corporation and Consolidated Subsidiaries
1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
(a) BASIS OF PRESENTING CONSOLIDATED FINANCIAL STATEMENTS
The accompanying consolidated financial statements of Olympus Corporation (the “Company”) and its consolidated subsidiaries have been prepared 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 from International Financial Reporting Standards.
Effective April 1, 2008, the Company adopted the “Practical Solution on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements”
(PITF No.18). In accordance with PITF No.18, the accompanying consolidated financial statements for the years ended March 31, 2012 and 2011 have been prepared by using, the
accounts of foreign consolidated subsidiaries prepared in accordance with either International Financial Reporting Standards (IFRS) or accounting principles generally accepted in the
United States as adjusted for certain items including those for goodwill, actuarial differences and capitalized development costs.
The accompanying consolidated financial statements have been reformatted and translated into English (with some expanded descriptions) from the consolidated financial
statements of the Company prepared in accordance with Japanese GAAP and filed with the appropriate Finance Bureau of the Ministry of Finance as required by the Financial
Instruments and Exchange Act. Certain supplementary information included in the statutory Japanese language consolidated financial statements is not presented in the accompany-
ing consolidated financial statements.
On November 8, 2011, it came to light in the process of the investigation of the independent Third Party Committee that the Company had postponed recognition of losses on
securities investments from around the 1990’s and was using the acquisition transactions for three domestic subsidiaries (Altis Co., Ltd., NEWS CHEF, Inc. and Humalabo Co., Ltd.,
hereinafter, collectively, the “Three Domestic Subsidiaries”) and Gyrus Group PLC (Gyrus) to settle said losses.
Based on the findings, it has been determined that the Company substantially controlled funds, which had losses on securities investments and had not previously been
consolidated with the purpose of postponing recognition of losses, and accordingly, the Company has restated its consolidated financial statements by consolidating these funds and
reflected such losses on the consolidated financial statements for the relevant fiscal years. Additionally, restatements were made to the accounting for the acquisition of the Three
Domestic Subsidiaries as well as the fees and the proceeds to buy back preferred shares paid to financial advisors in connection with the acquisition of Gyrus, which were used for
making up for the losses. These restatements also included the cancellation of goodwill incurred from these acquisitions on the consolidated balance sheets, and the cancellation of
amortization and impairment losses of such goodwill on the consolidated statements of operations.
As a result, the impact of the restatement on the 2011 consolidated financial statements is as follows:
Millions of yen
As previously
reported
(A)
As restated
(B)
Restatement
(B-A)
March 31, 2011:
Net sales ................................................................................................................................................................ ¥ 847,105 ¥ 847,105 ¥ —
Operating income .................................................................................................................................................... 35,360 38,379 3,019
Income before income taxes and minority interests .................................................................................................... 22,759 19,938 (2,821)
Net income ............................................................................................................................................................. 7,381 3,866 (3,515)
Total assets ............................................................................................................................................................. 1,063,593 1,019,160 (44,433)
Total net assets ....................................................................................................................................................... ¥ 166,836 ¥ 115,579 ¥ (51,257)
April 1, 2010:
Retained earnings ................................................................................................................................................... ¥ 168,238 ¥ 114,719 ¥ (53,519)
Total net assets ....................................................................................................................................................... ¥ 216,891 ¥ 163,131 ¥ (53,760)
In addition, certain reclassifications have been made in the 2011 consolidated financial statements to conform to the classification used in the 2012 consolidated financial state-
ments.
The translation of the Japanese yen amounts into U.S. dollars is included solely for the convenience of readers outside Japan, using the exchange rate of ¥80 to US$1.00. The
convenience translations should not be construed as representations that the Japanese yen amounts have been, could have been, or could in the future be, converted into U.S. dollars
at this or any other rate of exchange.
(b) PRINCIPLES OF CONSOLIDATION AND ACCOUNTING FOR INVESTMENTS IN UNCONSOLIDATED SUBSIDIARIES AND AFFILIATES
The accompanying consolidated financial statements include the accounts of the Company and its significant subsidiaries. For the year ended March 31, 2012, the accounts of 188
(179 in 2011) subsidiaries have been included in the consolidated financial statements. All significant inter-company balances and transactions have been eliminated in the consolida-
tion.
The Company consolidates all significant investees which were controlled through substantial ownership of majority voting rights or existence of certain conditions.
The financial statements of some subsidiaries are consolidated by using their financial statements as of or year ended March 31, which are prepared solely for consolidation
purposes. Some subsidiaries are consolidated using their financial statements as of their respective fiscal year end, which falls on December 31 and necessary adjustments are made to
their financial statements to reflect any significant transactions from January 1 to March 31. All significant intercompany balances and transactions have been eliminated in consolidation.
OLYMPUS 󱚈 Annual Report 2012
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