Sharp 2015 Annual Report Download - page 35

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 con-
solidated 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 ac-
counting 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 consolidated subsidiaries for consolidation pur-
poses have been prepared 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 expanded 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 Ministry
of Finance as required by the Japanese Financial Instruments and Exchange Law. Certain supplementary
information included in the Japanese language statutory consolidated financial statements, but not re-
quired for fair presentation, is not presented in the accompanying consolidated financial statements.
(b) Principles of consolidation
The accompanying consolidated financial statements include the accounts of the Company and 85 sig-
nificant companies over which the Company has power of control through majority voting right or the
existence of certain other conditions evidencing control by the Company. Investments in 1 nonconsoli-
dated subsidiary and 20 affiliates over which the Company has the ability to exercise significant influence
over operating and financial policies are accounted for under the equity method.
In the elimination of investments in consolidated subsidiaries, the assets and liabilities of the subsidiar-
ies, including the portion 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 currencies are translated into Japanese yen at cur-
rent rates at each balance sheet date, and the resulting translation gains and losses are charged to income.
Assets and liabilities are translated at current rates at each balance sheet date, net assets accounts are
translated at historical 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 change 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 categorize those securities as “other securi-
ties,” which, in principle, include all securities other than trading securities and held-to-maturity securities.
Other securities with available fair market values are stated at fair market value, which is calculated as
the average of market prices during the last month of the fiscal year. Unrealized holding gains and losses
on these securities are reported, net of applicable income taxes, as a separate component of net assets.
Realized gains and losses on the sale of such securities are computed principally using average cost.
Other securities with no available fair market values are stated at average cost.
If the fair market value of other securities declines significantly, such securities are stated at fair market
value and the difference between the fair market value and the carrying amount is recognized as loss
in the period of decline. If the net asset value of other securities with no available fair market values
declines significantly, the securities are written down to the net asset value and charged to income. In
these cases, the fair market value or the net asset value is carried forward to the next year.
1. Summary of Significant Accounting and Reporting Policies
33
Notes to the Consolidated
Financial Statements
Financial Section
Segment Outline
Medium-Term Management Plan
for Fiscal 2015 through 2017
Investor Information
Directors, Audit & Supervisory Board
Members and Executive Officers
Risk Factors
Corporate Governance
Contents
Corporate Social
Responsibility (CSR)
Message to our Shareholders
Fiscal 2014 Review by
Product Group
Financial Highlights
SHARP Annual Report 2015
Consolidated
Subsidiaries
Independent Auditor’s
Report
Consolidated Statements of
Cash Flows
Consolidated Statements of
Changes in Net Assets
Consolidated Statements of
Comprehensive Income
Consolidated Statements of
Operations
Consolidated Balance Sheets
Financial Review
Five-Year Financial Summary