Wacom 2011 Annual Report Download - page 15

Notes to Consolidated Financial Statements
Wacom Co., Ltd. and Its Subsidiaries
28
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”) and
its subsidiaries filed with the Director of the Kanto
Local Finance Bureau in accordance with the Finan-
cial Instruments and Exchange Law 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 from the application and disclosure require-
ments of International Financial Reporting Standards.
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¥83.15 = U.S.$1.00, the approximate
rate of exchange on March 31, 2011. Such transla-
tions 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.
2. Summary of significant accounting
policies:
(1) Principles of consolidation -
The consolidated financial statements include the
accounts of the Company and all of its majority-
owned subsidiaries (10 companies). Majority-owned
subsidiaries are as follows;
•Wacom Europe GmbH
•Wacom Technology Corporation
•Wacom China Corporation
•Wacom Korea Co., Ltd.
•Wacom Australia Pty. Ltd.
•Wacom Hong Kong Ltd.
•Wacom Singapore Pte. Ltd.
•Wacom Taiwan Information Co., Ltd.
•Wacom Technology Services, Corp.
•Wacom India Pvt. Ltd.
The Company established Wacom Technology
Services, Corp. and Wacom India Pvt. Ltd. in August
and October 2010, respectively. Their results of
operations have been included in the company’s
consolidated financial statements since those dates.
There are no unconsolidated subsidiaries or affiliates
accounted for by the equity method.
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.
(2) Valuation methods for major assets -
(a) Securities:
Securities for which market price or quotations are not
available are stated at cost based on the moving-
average method.
(b) Derivatives:
All derivatives are stated at fair value, with changes in
fair value included in net income or loss in the period
in which they arise.
(c) Inventories:
Inventories held by the Company are stated at the
lower of cost or realizable value, cost being deter-
mined by the gross average method.
(3) Depreciation and amortization of major assets -
(a) Property, plant and equipment:
The Company adopted the declining-balance method
of depreciation at using rates based on the estimated
useful lives of the assets (depreciation of buildings
acquired by the domestic company after April 1, 1998
is computed using the straight-line method of depre-
ciation). Depreciation of property, plant and equip-
ment held by at the foreign consolidated subsidiaries
is computed using the straight-line method over
estimated useful lives.
Useful lives of major classes of property, plant and
equipment are as follows:
Buildings and structures 3 to 65 years
Machinery, equipment and vehicles 3 to 7 years
Tools, furniture and fixtures 2 to 20 years
(b) Intangible assets:
The Company adopted the straight-line method for
computing amortization. Software for in-house use is
amortized based on the straight-line method over the
expected useful economic life of 5 years. Software for
sale is amortized based on an estimated volume of
sales, with the minimum amortization amount calcu-
lated based on a useful life of 3 years.
(4) Basis of provision -
(a) Allowance for doubtful accounts:
An allowance for doubtful accounts is provided in an
amount sufficient to cover probable losses on
collection of notes and accounts receivable. The
allowance for doubtful accounts is computed based a
calculated historical bad debt experience ratio for
trade receivables, in addition to the estimated amount
of doubtful receivables on an individual account basis.
Foreign consolidated subsidiaries mainly compute the
allowance for doubtful accounts based on the
estimated amount of doubtful receivables on an
individual account basis.
(b) Provision for bonuses:
The provision for bonuses to employees is provided
based on estimated amounts expected to be paid to
employees.
27
The accompanying notes are an integral part of these financial statements.
Consolidated Statements of Cash Flows
Wacom Co., Ltd. and Its Subsidiaries
Net cash provided by (used in) operating activities :
Income before income taxes
Depreciation and amortization
Share-based compensation expenses
Increase (decrease) in allowance for doubtful accounts
Increase (decrease) in provision for bonuses
Increase (decrease) in provision for directors' bonuses
Increase (decrease) in provision for loss on disaster
Increase (decrease) in provision for loss on business liquidation
Increase (decrease) in provision for retirement benefits
Increase (decrease) in provision for directors' retirement benefits
Loss on adjustment for changes of accounting standard for asset retirement obligations
Interest and dividends income
Interest expenses
Loss (gain) on valuation of investment securities
Foreign exchange losses (gains)
Loss (gain) on sales and retirement of noncurrent assets
Decrease (increase) in notes and accounts receivable-trade
Decrease (increase) in inventories
Increase (decrease) in notes and accounts payable-trade
Others, net
Sub total
Interest and dividends income received
Interest expenses paid
Settlement package paid
Income taxes paid
Income taxes (paid) refund
Net cash provided by (used in) operating activities
Net cash provided by (used in) investing activities:
Purchase of property, plant and equipment
Purchase of intangible assets
Purchase of software
Proceeds from sales of noncurrent assets
Payments for acquisition of business (Note 9)
Proceeds from redembtion of securities
Others, net
Net cash provided by (used in) investing activities
Net cash provided by (used in) financing activities:
Proceeds from issuance of common stock
Cash dividends paid
Net cash provided by (used in) financing activities
Effect of exchange rate change on cash and cash equivalents
Net increase (decrease) in cash and cash equivalents
Cash and cash equivalents at beginning of year
Cash and cash equivalents at end of year (Note 9)
¥2,984,707
749,373
31,917
(4,589)
(35,100)
327
197,212
25,020
43,168
(452,089)
28,578
(73,246)
9,262
20,000
71,197
12,407
318,470
(945,493)
(877,947)
371,118
2,474,292
73,210
(9,474)
(21,113)
-
(1,337,958)
1,178,957
(409,386)
-
(781,514)
6,606
(291,637)
-
5,889
(1,470,042)
-
(1,202,132)
(1,202,132)
(402,076)
(1,895,293)
12,350,113
¥10,454,820
¥3,120,867
757,167
-
3,247
(27,704)
32,943
-
-
14,058
34,024
-
(21,510)
14,131
-
160,114
35,297
(1,492,802)
31,497
1,131,963
534,994
4,328,286
34,676
(14,213)
-
(742,442)
-
3,606,307
(375,920)
(192,361)
(739,787)
11,353
-
500,000
(8,372)
(805,087)
2,092
(1,201,459)
(1,199,367)
(265,854)
1,335,999
11,014,114
¥12,350,113
$35,895
9,012
384
(55)
(422)
4
2,372
301
519
(5,437)
344
(881)
111
241
856
149
3,830
(11,371)
(10,559)
4,464
29,757
881
(114)
(254)
-
(16,091)
14,179
(4,923)
-
(9,399)
79
(3,507)
-
71
(17,679)
-
(14,457)
(14,457)
(4,837)
(22,794)
148,528
$125,734
Year ended March 31 Year ended March 31
Thousands of yen
Thousands of
U.S. dollars
(Note 1)
2011 20112010