Fujitsu 2008 Annual Report Download - page 88

4. Capital Expenditure
In fiscal 2007, capital expenditure, which was concentrated on
growth fields such as logic LSI technologies and outsourcing
services, as well as on building the base for future business
development, totaled ¥249.0 billion (US$2,490 million). By busi-
ness segment, capital expenditure was ¥81.6 billion (US$816
million) in Technology Solutions, ¥27.6 billion (US$276 million) in
Ubiquitous Product Solutions, ¥117.3 billion (US$1,173 million)
in Device Solutions, and ¥22.5 billion (US$225 million) for corpo-
rate and others.
Capital Expenditure (¥ Billions)
Years ended March 31
2007
2008
Increase
(Decrease)
Rate (%)
Technology Solutions .......... ¥91.3 ¥81.6 (10.6)%
Ubiquitous Product Solutions . . 24.8 27.6 11.3
Device Solutions ............... 166.2 117.3 (29.4)
Corporate and others* ......... 22.8 22.5 (1.3)
Total ........................... ¥305.2 ¥249.0 (18.4)%
Japan .......................... 254.6 189.6 (25.5)
Overseas ...................... 50.6 59.4 17.4
* Non-allocable capital expenditure for shared R&D and parent company management
divisions
5. Consolidated Subsidiaries
At the end of fiscal 2007, the Company had 430 consolidated
subsidiaries, comprising 136 companies in Japan and 294 over-
seas, representing an increase of 37 from last year’s total of 393.
The increase in new companies in the Group primarily reflected
M&A activity by UK subsidiary Fujitsu Services Holdings PLC as
well as the establishment of new companies due to the spin-off
of LSI and other business divisions.
The number of affiliated companies accounted for by the
equity method as of the fiscal year-end totaled 23, four less than
a year earlier.
6. Critical Accounting Policies and Estimates
Accounting Principles and Practices
The accompanying consolidated financial statements of the
Group have been prepared in accordance with accounting prin-
ciples and practices generally accepted in Japan and the regula-
tions under the Financial Instruments and Exchange Law of
Japan. The accounting principles and practices adopted by con-
solidated subsidiaries outside Japan conform to those of their
respective countries.
The preparation of the consolidated financial statements
requires management to make estimates and assumptions that
affect the amount of the assets, liabilities, contingent assets and
contingent liabilities reported at the end of the fiscal year, as well
as the amount of revenue and expenses recognized during that
term. Actual results may differ from these estimates.
Losses, moreover, may occur as a result of changes in
accounting standards.
Revenue Recognition
Revenue from sales of IT systems and products, excluding soft-
ware development contracts, is recognized upon acceptance
by the customers, whereas revenue from sales of personal com-
puters, other equipment and electronic devices is recognized
when the products are delivered to customers. Revenue from
software development contracts is recognized on a percentage-
of- completion basis.
We stringently assess the potential revenue recoverable on
projects for which estimated costs have exceeded estimated rev-
enue, and recognize as losses the amounts assessed as non-
recoverable. If the estimated costs relating to such contracts
increase further in the future, additional losses may be recognized.
Property, Plant and Equipment
Depreciation for property, plant and equipment is computed
principally by the straight-line method at rates based on the
estimated useful lives of the respective assets, reflecting the
likely period over which the value of the assets can be realized
under normal business conditions. In the future, some equip-
ment and facilities may become obsolete as a result of technical
innovation or other factors, and some equipment and facilities
086
ANNUAL REPORT 2008FUJITSU LIMITED
MANAGEMENT’S DISCUSSION AND ANALYSIS OF OPERATIONS