Pioneer 2014 Annual Report Download - page 31

a. Basis of Consolidated Financial Statements
The accompanying consolidated financial statements
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 accordance with accounting principles gen-
erally accepted in Japan (“Japanese GAAP”), which
are different in certain respects as to the application
and disclosure requirements of International Financial
Reporting Standards (“IFRS”).
In preparing these consolidated financial state-
ments, certain reclassifications and rearrangements
have been made to the consolidated financial state-
ments issued in Japan in order to present them in a
form which is more familiar to readers outside Japan.
In addition, certain reclassifications have been made
in the 2013 consolidated financial statements to
conform to the classifications used in 2014.
The consolidated financial statements are stated
in Japanese yen, the currency of the country in which
Pioneer Corporation (Pioneer Kabushiki Kaisha; the
“Company”) is incorporated and operates. The trans-
lations of Japanese yen amounts into U.S. dollar
amounts are included solely for the convenience
a. Consolidation
The consolidated financial statements as of March 31,
2014 include the accounts of the Company and its
80 (89 in 2013) subsidiaries.
Under the control or influence concept, those
companies in which the Company, directly or indi-
rectly, is able to exercise control over operations are
fully consolidated, and those companies over which
the Group has the ability to exercise significant influ-
ence are accounted for by the equity method.
Investments in six (five in 2013) associated com-
panies are accounted for by the equity method.
The excess of cost of an acquisition over the fair
value of the net assets of an acquired subsidiary at the
date of acquisition is being amortized over a period
not exceeding 20 years.
All significant intercompany balances and trans-
actions have been eliminated in consolidation. All
material unrealized profit included in assets resulting
from transactions within the Group is also eliminated.
1. Basis of Presentation
2. Summary of Significant Accounting Policies
of readers outside Japan and have been made at
the rate of ¥103 to $1.00, the approximate rate of
exchange as of March 31, 2014. Such translations
should not be construed as representations that
the Japanese yen amounts could be converted into
U.S. dollars at that or any other rate.
b. Nature of Operations
The Company and its subsidiaries (together, the
“Group”) are engaged in the development, manufacture
and sale of electronic products. The Group is a leading
global manufacturer of consumer- and business-
use electronic products such as car electronics and
audio/video. The principal production activities of the
Group are carried out in Asia including Japan, Brazil,
and the United States. The Group’s products are
generally sold under its own brand names, principally
“Pioneer.” The Group sells its products to customers
in consumer and commercial markets through its sales
offices in Japan, and its sales subsidiaries and inde-
pendent distributors overseas. On an OEM (original
equipment manufacturing) basis, the Group markets
certain products, such as car electronics products to
other companies.
b. Unification of Accounting Policies Applied
to Foreign Subsidiaries for the Consolidated
Financial Statements
In May 2006, the Accounting Standards Board of
Japan (the “ASBJ”) issued ASBJ Practical Issues
Task Force (PITF) No. 18, “Practical Solution on Uni-
fication of Accounting Policies Applied to Foreign
Subsidiaries for Consolidated Financial Statements.”
PITF No. 18 prescribes that the accounting policies
and procedures applied to a parent company and
its subsidiaries for similar transactions and events
under similar circumstances should in principle be
unified for the preparation of the consolidated financial
statements. However, financial statements prepared
by foreign subsidiaries in accordance with either IFRS
or the generally accepted accounting principles in the
United States of America tentatively may be used for
the consolidation process, except for the following
items which should be adjusted in the consolidation
process so that net income is accounted for in
accordance with Japanese GAAP, unless they are not
material: (a) amortization of goodwill; (b) scheduled
amortization of actuarial gain or loss of pensions that
has been directly recorded in equity; (c) expensing
capitalized development costs of R&D; (d) cancellation
Pioneer Corporation and its Subsidiaries
Year Ended March 31, 2014
Notes to Consolidated Financial Statements
29
Pioneer Corporation
Annual Report 2014