Fujitsu 2010 Annual Report Download - page 106

(e) Marketable securities
Marketable securities included in “short-term investments” and “investments and long-term loans” are classified as either held-to-maturity
investments, which are the debt securities which the Group has the positive intent and ability to hold to maturity, or available-for-sale securi-
ties, which are “equity securities” or “debt securities not classified as held-to-maturity.”
Held-to-maturity investments are stated at amortized cost, adjusted for the amortization of premium or accretion of discounts to matu-
rity. The cost of available-for-sale securities sold is calculated by the moving average method.
Available-for-sale securities are carried at fair market value, with the unrealized gains or losses, net of taxes, reported in a separate com-
ponent of net assets.
(f) Allowance for doubtful accounts
The allowance for doubtful accounts is provided at an amount deemed sufficient to cover estimated future losses.
(g) Inventories
Finished goods are mainly stated at cost determined by the moving average method.
Work in process is mainly stated at cost determined by the specific identification method or the average cost method.
Raw materials and supplies are mainly stated at cost determined by the moving average method.
Inventories with lower profitability are written down.
(h) Property, plant and equipment and depreciation
Property, plant and equipment, including renewals and additions, are carried at cost. Maintenance and repairs, including minor renewals and
improvements, are charged to income as incurred.
Depreciation is computed by the straight-line method over the estimated useful lives, reflected by the likely period over which the value
of the asset can be realized under actual business conditions.
Certain property, plant and equipment are impaired based on consideration of their future usefulness. Accumulated impairment loss is
subtracted directly from each asset.
(i) Intangible assets
Goodwill, including the goodwill acquired by subsidiaries, representing the premium paid to acquire a business is amortized using the straight-
line method over periods not exceeding 20 years as these are periods over which the Group expects to benefit from the acquired business.
Computer software for sale is amortized based on the current year sales units to the projected total products’ sales units. Computer
software for internal use is amortized by the straight-line method over the estimated useful lives.
Other intangible assets are amortized by the straight-line method over the estimated useful lives of the respective assets.
(j) Leases
Assets acquired by lessees in finance lease transactions are recorded in the corresponding asset accounts.
(k) Provision for product warranties
Provision for product warranties is recognized at the time of sales of the products at an amount which represents the estimated cost, based
on past experience, to repair or exchange certain products within the warranty period.
(l) Provision for construction contract losses
Provision for construction contract losses is the estimated amount of future losses on customized software or construction contracts whose
costs are probable to exceed total contract revenues.
(m) Provision for bonuses to board members
Provision for the bonuses to board members is recorded based on an estimated amount.
104 FUJITSU LIMITED Annual Report 2010
Notes to Consolidated Financial Statements