2.1.2.

Functions and tasks

Honda Motor Co., Ltd. is a global conglomerate primarily known for its production of
automobiles, motorcycles, and power equipment. Its functions and tasks span various industries
and include a range of activities from R&D to manufacturing. Here’s a breakdown of Honda's
main functions and tasks:

1. Automobile Manufacturing

 Production and Sales: Honda designs, manufactures, and sells a wide range of vehicles,
including cars, SUVs, trucks, and electric vehicles.
 Research and Development (R&D): Honda invests heavily in R&D to innovate in areas
like fuel efficiency, electric vehicle (EV) technology, autonomous driving, and safety
features.
 Quality Control: Ensuring high-quality standards through rigorous testing and quality
assurance practices.

2. Motorcycle Manufacturing

 Design and Manufacturing: Honda produces motorcycles for various segments,

including sport, touring, off-road, and commuter bikes.
 Technology Integration: Developing advanced features like ABS, fuel injection, and
environmentally-friendly engines.
 Global Reach: Honda is a leading motorcycle manufacturer globally, focusing on
markets across Asia, North America, and Europe.

3. Power Equipment

 Range of Products: Honda manufactures power equipment, including generators,

lawnmowers, marine engines, and snow blowers.
 Innovative Technologies: Focuses on making power products more fuel-efficient,
quieter, and environmentally friendly.

4. Aerospace and Robotics

 HondaJet: Honda has an aerospace division that designs and manufactures the HondaJet,
a small, efficient business jet.
 Robotics: Development of robots like ASIMO (Advanced Step in Innovative Mobility)
to explore humanoid robotics and its potential applications.

5. Renewable Energy and Sustainability Initiatives

 EV and Hybrid Technology: Extensive R&D into electric and hybrid vehicles, with
goals to phase out combustion engines in the coming decades.
  Hydrogen Fuel Cells: Research and production of hydrogen fuel cell technology for
cars, including models like the Honda Clarity.
 Environmental Goals: Initiatives to reduce carbon emissions and increase the use of
renewable energy across manufacturing processes.

6. Corporate Social Responsibility (CSR) and Safety

 Community Engagement: Honda undertakes numerous CSR projects worldwide,

focusing on sustainability, education, and social welfare.
 Vehicle Safety: Continuous advancements in vehicle safety through research into
collision prevention, automated driving aids, and crash testing.

7. Financial Services

 Honda Financial Services: Provides financial support to customers, including vehicle

financing, leasing, and insurance products.
 Market Expansion: Honda Financial Services helps Honda expand its customer base by
offering accessible financing options.

Honda's global operations are backed by a commitment to innovation and efficiency, making it a
key player in mobility and energy solutions worldwide.

2.1.3. Organizational structure

Organizational structure (organizational chart of asset accounting, inventory

accounting)

Honda Motor Co., Ltd.’s organizational structure for asset accounting and inventory accounting
likely follows a hierarchical framework, designed to ensure accurate financial management,
compliance, and efficiency in these key areas. While Honda’s specific structure may vary
slightly across regions, here’s a general outline of what an organizational chart for Asset
Accounting and Inventory Accounting may look like within a large, multinational corporation
like Honda:

1. Chief Financial Officer (CFO)

 Responsible for overall financial strategy, policies, and management, overseeing all
accounting functions, including asset and inventory accounting.

2. Vice President of Finance / Finance Director

 Reports to the CFO and has overall responsibility for all accounting operations.
 Supervises senior managers or heads of specific accounting departments, including asset
accounting and inventory accounting.

3. Controller

 Often responsible for ensuring accurate financial reporting, compliance with accounting
standards, and overseeing day-to-day operations within the accounting department.
 Manages both Asset Accounting and Inventory Accounting divisions.

4. Asset Accounting Department

 Asset Accounting Manager

o Oversees the asset accounting team and ensures compliance with policies on fixed
assets, depreciation, asset tracking, and valuation.
 Senior Asset Accountant
o Manages asset categorization, depreciation schedules, asset acquisitions,
disposals, and periodic asset reconciliations.
 Asset Accountants and Analysts
o Conduct detailed tracking, reconciliation, and reporting of asset accounts,
working closely with operations to track assets from acquisition through disposal.

5. Inventory Accounting Department

 Inventory Accounting Manager

o Ensures adherence to inventory accounting policies, manages the periodic
valuation of inventory, oversees stock audits, and addresses discrepancies.
 Senior Inventory Accountant
o Manages FIFO, LIFO, or other valuation methodologies and ensures compliance
with the standard cost method.
 Inventory Accountants and Analysts
o Perform inventory reconciliations, stock adjustments, and periodic inventory
assessments, working closely with the manufacturing and supply chain teams.

6. Internal Audit Team

  Audit Manager
o Reports independently within the finance structure, providing assurance of policy
adherence and identifying risks within both asset and inventory accounting.
 Internal Auditors
o Conduct regular audits of asset and inventory accounts, reviewing records for
accuracy, compliance, and efficiency.

7. IT Systems and ERP Support Team

 ERP/Systems Manager
o Supports financial systems such as SAP or Oracle, ensuring alignment of asset
and inventory data with financial reports.
 Systems Analysts
o Maintain systems accuracy for asset and inventory modules, support reporting
needs, and troubleshoot issues related to data flow or systems integration.

This structure allows Honda to manage its asset and inventory accounts with clear roles and
responsibilities across each level, ensuring accuracy, compliance, and timely reporting. Honda
may adapt this framework to align with their specific operational needs across various global
regions.

Accounting policies

Honda Motor Co., Ltd. follows several key accounting policies to ensure accurate and
transparent financial reporting in line with International Financial Reporting Standards (IFRS).
Here are some of Honda's key accounting policies:

1. Revenue Recognition

 Honda recognizes revenue when control of the goods or services is transferred to the
customer, usually upon delivery or as services are rendered.
 For automobile and motorcycle sales, revenue is typically recognized at the point of sale
or delivery.
 For financial services, revenue is recognized over the contract term as interest is earned
or as services are provided.

2. Inventory Valuation

 Honda values its inventory using the cost method, which includes purchase costs,
production costs, and other directly attributable expenses.
 The cost of inventory is calculated primarily on a first-in, first-out (FIFO) basis and
includes raw materials, work-in-process, and finished goods.
 Inventory is written down to net realizable value when necessary.
3. Financial Instruments

 Honda categorizes financial assets and liabilities based on their nature and intended use
(e.g., financial assets held at fair value, loans, and receivables).
 Derivatives and hedges are used for risk management purposes, primarily to hedge
currency and interest rate risk, and are valued at fair market value.

4. Leases

 Honda applies the IFRS 16 lease standard, recognizing both a right-of-use asset and a
lease liability for leases.
 Lease payments are separated into interest and principal repayments, while depreciation
of right-of-use assets is recognized over the lease term.

5. Foreign Currency Translation

 Foreign currency transactions are translated into the functional currency using the
exchange rate at the transaction date.
 Assets and liabilities are translated at the exchange rate at the balance sheet date, with
gains and losses due to exchange rate changes recognized in profit or loss.

These policies enable Honda to produce accurate, comparable, and reliable financial statements,
ensuring alignment with regulatory standards and consistency in financial reporting across
periods. Honda's financial reports include these policies in their annual financial disclosures for
investor transparency.