Pioneer 2016 Annual Report Download - page 29

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 2015 consolidated financial statements to
conform to the classifications used in 2016.
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
a. Consolidation
The consolidated financial statements as of March 31,
2016 include the accounts of the Company and its 71
(73 in 2015) subsidiaries.
Under the control and influence concepts, those
companies in which the Company, directly or indirectly,
is able to exercise control over operations are fully
consolidated, and those companies over which the
Group has the ability to exercise significant influence
are accounted for by the equity method.
Investments in seven (seven in 2015) associated
companies are accounted for by the equity method.
The excess of the 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
amounts are included solely for the convenience of
readers outside Japan and have been made at the rate
of ¥113 to $1.00, the approximate rate of exchange
as of March 31, 2016. 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, manufac-
ture and sale of electronic products. The Group is a
leading global manufacturer of car electronics prod-
ucts. 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 independent distributors
overseas. On an OEM (original equipment manufactur-
ing) 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
Unification of Accounting Policies Applied to Foreign
Subsidiaries for Consolidated Financial Statements”
which was subsequently revised in February 2010
and March 2015 to reflect revisions of the rel-
evant Japanese GAAP or accounting standards
in other jurisdictions. 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 subsidiar-
ies in accordance with either IFRS or the generally
accepted accounting principles in the United States
of America (Financial Accounting Standards Board
Accounting Standards Codification—“FASB ASC”)
tentatively may be used for the consolidation pro-
cess, except for the following items which should
be adjusted in the consolidation process so that
Pioneer Corporation and its Subsidiaries
Year Ended March 31, 2016
Notes to Consolidated Financial Statements
27
Pioneer Corporation Annual Report 2016