Wacom 2008 Annual Report Download - page 29

Notes to Consolidated Financial Statements
1. Basis of presenting consolidated financial statements:
The accompanying consolidated financial statements
have been prepared from the consolidated financial
statements of Wacom Co., Ltd. (the "Company") filed
with the Director of the Kanto Local Finance Bureau
in accordance with the Financial Instruments and
Excange Act of Japan and its related accounting
regulations, and in conformity with accounting
principles and practices generally accepted in Japan,
which are different in certain respects as to the
application and disclosure requirements of
International Financial Reporting Standards.
In preparing these consolidated financial statements,
certain reclassifications and rearrangements have
been made to the consolidated financial statements
issued in Japan in order to present these statements
in a form which is more familiar to readers of these
statements outside Japan. Some information,
provided in the notes to the consolidated financial
statements, is not required under accounting
principles generally accepted in Japan, but is
presented for the convenience of the readers.
The consolidated financial statements are stated in
Japanese yen, the currency of the country in which the
Company is incorporated and principally operates. The
translation of Japanese yen amounts into U.S. dollar
amounts is included solely for the convenience of the
readers outside Japan and has been calculated at the
rate of JP¥100.19 = U.S.$1.00, the approximate rate of
exchange on March 31, 2008. Such translations should
not be construed as representations that the Japanese
yen amounts could have been or could be converted
into U.S. dollars at that or any other rate.
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2.Summary of significant accounting policies:
(1) Consolidation -
The consolidated financial statements include the
accounts of the Company and all of its
majority-owned subsidiaries.
The assets and liabilities of its subsidiaries are included
in the financial statements at fair value on acquisition,
and the difference between the net assets at fair value
and the investment amounts is accounted for as
goodwill, which is amortized on straight-line basis over
the reasonable period not exceeding 20 years.
All significant intercompany balances and
transactions, and any unrealized profits included in
assets, have been eliminated on consolidation.
Consolidated subsidiaries overseas have applied
generally accepted accounting principles in each country
to their own financial statements and no adjustments
have been made to their financial statements on
consolidation, as allowed under accounting principles
and practices generally accepted in Japan.
There are no unconsolidated subsidiaries or affiliates
accounted for by the equity method in the previous fiscal
year and this fiscal year for consolidation.
The fiscal year end of Wacom China Corporation is
December 31. However, for consolidation purposes, the
provisional settlement of accounts as of March 31 is
utilized.
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(2)Cash and cash equivalents -
Cash and cash equivalents include all highly liquid
investments, generally with original maturities of three
months or less, that are readily convertible to known
amounts of cash and, thus, are near maturity and
present an insignificant risk of changes in value.
(3) Financial instruments -
(a) Derivatives:
All derivatives are stated at fair value, with changes in fair
value included in net profit or loss in the period in which
they arise.
(b) Securities:
Securities held by the Company and its subsidiaries are
classified as follows:
Held-to-maturity debt securities are stated at cost after
accounting for any premium or discount at
acquisition,which is amortized over the period to maturity.
Other securities for which market price or quotations are
not available are stated at cost based on the
moving-average method.
(4) Allowance for doubtful accounts -
An allowance for doubtful accounts is provided in an
amount sufficient to cover probable losses on collection.
It consists of the estimated uncollectable amounts with
respect to specific identified doubtful receivables and an
amount estimated by management using the historical
percentage of collection losses.
(5) Inventories -
Inventories held by the domestic company are stated
at cost, which is mainly determined by the gross
average method.
Inventories held by foreign consolidated subsidiaries
are stated at the lower of cost or market value, which
is mainly determined by the first-in, first-out (“FIFO”)
method.
(6) Property, plant and equipment and depreciation -
Depreciation of the domestic company is computed
using the declining-balance method at rates based on
the estimated useful lives of the assets. However,
depreciation of buildings acquired by the domestic
company after April 1, 1998 is computed using the
straight-line method.
Depreciation of foreign consolidated subsidiaries is
principally using the straight-line method.
Wacom Co., Ltd. and Its Subsidiaries
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