Sharp 2013 Annual Report Download - page 42

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40 SHARP CORPORATION
Kameyama and the buildings (excluding attached structures) ac
Financial Section
Notes to the Consolidated Financial Statements
Sharp Corporation and Consolidated Subsidiaries
(a) Basis of presenting consolidated financial statements
The accompanying consolidated financial statements of Sharp
Corporation (“the Company”) and its consolidated subsidiaries
have been prepared in accordance with the provisions set forth
in the Japanese Financial Instruments and Exchange Law and its
related accounting regulations and in conformity with account-
ing principles generally accepted in Japan (“Japanese GAAP”),
which are different in certain respects as to application and
disclosure requirements from International Financial Reporting
Standards (“IFRS”).
The financial statements of the Company’s overseas consoli-
dated subsidiaries for consolidation purposes have been pre-
pared in conformity with IFRS or generally accepted accounting
principles in the United States of America (“US GAAP”), and
partially reflect the adjustments which are necessary to conform
with Japanese GAAP.
The accompanying consolidated financial statements have
been restructured and translated into English (with certain ex-
panded disclosures) from the consolidated financial statements
of the Company prepared in accordance with Japanese GAAP
and filed with the appropriate Local Finance Bureau of the Min-
istry of Finance as required by the Japanese Financial Instruments
and Exchange Law. Certain supplementary information included
in the Japanese language statutory consolidated financial state-
ments, but not required for fair presentation, is not presented in
the accompanying consolidated financial statements.
The translation of the Japanese yen amounts into U.S. dol-
lar amounts is included solely for the convenience of readers
outside Japan, using the prevailing exchange rate at March 31,
2013, which was ¥93 to U.S. $1.00. The translations should not
be construed as a representation 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
The accompanying consolidated financial statements include
the accounts of the Company and 82 significant companies over
which the Company has power of control through majority vot-
ing right or the existence of certain other conditions evidencing
control by the Company. Investments in 1 nonconsolidated sub-
sidiary and 22 affiliates over which the Company has the abil-
ity to exercise significant influence over operating and financial
policies are accounted for under the equity method. The signifi-
cant affiliates are Sakai Display Products Corporation and Sharp
Finance Corporation. As a result of a decrease of the Company’s
ownership of Sakai Display Products Corporation, which was a
consolidated subsidiary as of March 31, 2012, during the year
ended March 31, 2013, the investment in Sakai Display Products
Corporation is accounted for under the equity method.
In the elimination of investments in consolidated subsidiaries,
the assets and liabilities of the subsidiaries, including the por-
tion attributable to minority shareholders, are evaluated using
the fair value at the time the Company acquired control of the
respective subsidiary.
Material intercompany balances, transactions and unrealized
profits have been eliminated in consolidation.
(c) Translation of foreign currencies
Monetary assets and liabilities denominated in foreign curren-
cies are translated into Japanese yen at current rates at each
balance sheet date, and the resulting translation gains or losses
are charged to income.
Assets and liabilities are translated at current rates at each
balance sheet date, net assets accounts are translated at histori-
cal rates, and revenues and expenses are translated at average
rates prevailing during the year. The resulting foreign currency
translation adjustments are shown as a separate component in
net assets.
(d) Cash and cash equivalents
Cash and cash equivalents include cash on hand, deposits on
demand placed with banks and highly liquid investments with
insignificant risk of changes in value which have maturities of
three months or less when purchased.
(e) Investments in securities
Investments in securities consist principally of marketable and
nonmarketable equity securities.
The Company and its domestic consolidated subsidiaries cat-
egorize those securities as “other securities,” which, in principle,
1. Summary of Significant Accounting and Reporting Policies