Explain
ing regulators.
8. In its 2003 annual report, Honda Motor Company Ltd. states:
Honda's manufacturing operations are principally conducted in 25 separate
factories, 5 of which are located in Japan. Principal overseas manufacturing
factories are located in the United States of America, Canada, the United
Kingdom, France, Italy, Spain, India, Pakistan, the Philippines, Thailand,
Vietnam, Brazil, and Mexico.... The company and its domestic subsidiar
ies maintain their books of account in conformity with financial account-
ing standards of Japan, and its foreign subsidiaries generally maintain their
books of account in conformity with those of the countries of their domicile.
The consolidated financial statements presented herein have been prepared
in a manner and reflect the adjustments which are necessary to conform
them with accounting principles generally accepted in the United States of
America. (p. 59)
Required:
Discuss the possible reasons for Honda to prepare its consolidated financial
statements in conformity with U.S. GAAP.