Fujitsu 2014 Annual Report Download - page 117

4. Restatements to Reflect Accounting
Standard Revisions
The Company’s consolidated subsidiaries outside Japan prepare their
financial statements in accordance with IFRS (International Financial
Reporting Standards) and have adopted the revised IAS 19 “Employee
Benefits” from the beginning of fiscal 2013. In line with this change,
financial figures for the previous fiscal year have been retrospectively
revised for comparison purposes. The revised accounting standards
and the impact on the Group’s consolidated financial statements for
the previous fiscal year are outlined as follows:
(1) Outline of revisions to accounting standards
a. The unrecognized obligation for retirement benefits will be brought
on the balance sheet upon accrual after adjusting for tax effects.
b. Amortization of actuarial gains and losses (differences between
expected and actual returns from pension plan assets, etc.) has
been abolished.
However, amortization is required in consolidation procedures
based on Japanese accounting standards. Because consolidated
subsidiaries outside Japan had previously applied the corridor
approach for amortizing actuarial gains and losses, the corridor
component of amortization expenses that was previously not
recognized will be an increase.
c. Net interest cost has been introduced to replace interest cost and
expected return on plan assets. The cost burden will increase
because the expected return on plan assets will be calculated by
applying the discount rate.
(2) Retrospective revision of previous year’s figure
Condensed Consolidated Balance Sheets (Unit: billion yen)
Before
revision 2013
Retrospective
revision
After revision
2013
Total assets . . . . . . . . . . . . 3,049.0 (128.7) 2,920.3
Total liabilities . . . . . . . . . 2,139.2 28.6 2,167.8
Net assets . . . . . . . . . . . . . 909.8 (157.3) 752.4
Owners’ equity . . . . . . . . . 781.4 (157.3) 624.0
Owners’ equity ratio . . . . . 25.6% (4.2%) 21.4%
Condensed Consolidated Income Statements (Unit: billion yen)
Before
revision 2013
Retrospective
revision
After revision
2013
Net sales . . . . . . . . . . . . . . 4,381.7 — 4,381.7
Operating income . . . . . . 95.2 (7.0) 88.2
Income before income
taxes and minority
interests . . . . . . . . . . . . . (45.1) (7.0) (52.1)
Net income . . . . . . . . . . . . (72.9) (7.0) (79.9)
<Breakdown of operating income by segment>
Technology Solutions . . . . 180.9 (7.0) 173.9
Ubiquitous Solutions . . . . 9.6 — 9.6
Device Solutions . . . . . . . . (14.2) — (14.2)
5. Capital Expenditure
In fiscal 2013, capital expenditure totaled ¥122.2 billion ($1,187
million), essentially unchanged from the previous fiscal year. In the
Technology Solutions segment, capital expenditures totaled ¥69.5
billion ($676 million), up 16.8% year on year, for expansion of data-
centers in Japan and overseas, along with spending on development
facilities for network products, among other items. In the Ubiquitous
Solutions segment, the Group spent ¥14.9 billion ($145 million),
essentially unchanged from the previous year, mainly for manufac-
turing facilities for car audio and navigation systems. In the Device
Solutions segment, expenditures totaled ¥33.9 billion ($330 mil-
lion), down 16.1% year on year, mainly for facilities needed to
increase production of semiconductor packages, among electronic
components. In areas other than the abovementioned segments,
capital expenditures were ¥3.7 billion ($37 million).
6. Consolidated Subsidiaries
At the end of fiscal 2013, the number of consolidated subsidiaries in
Japan totaled 194, and the number outside Japan totaled 318, for a
total of 512 subsidiaries. This represents a net decrease of 2 subsid-
iaries from 514 at the end of fiscal 2012, comprising 14 subsidiaries
added through acquisition or establishment and 16 subsidiaries
removed through merger, liquidation, or sale.
The number of affiliated companies accounted for by the equity
method as of the fiscal year-end totaled 24. This represents a net
decrease of 2 companies from 26 at the end of fiscal 2012, compris-
ing 1 company added and 3 companies removed.
7. Critical Accounting Policies and Estimates
The accompanying consolidated financial statements of the Group
have been prepared in accordance with accounting principles and
practices generally accepted in Japan and the regulations under the
Financial Instruments and Exchange Law of Japan. The preparation of
the consolidated financial statements requires management to make
assumptions and estimates 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. The following assumptions and estimates based on the
application of accounting principles are those that the management
believes may have a material impact on the consolidated financial
statements.
Revenue Recognition
Revenue from sales of ICT systems and products, excluding custom-
ized software under development contracts, is recognized upon
acceptance by the customers, whereas revenue from sales of per-
sonal computers, other peripheral equipment and electronic devices
is recognized when the products are delivered to the customers.
Revenue from customized software under development contracts is
recognized on a percentage-of-completion basis.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF OPERATIONS
115
FUJITSU LIMITED ANNUAL REPORT 2014
MANAGEMENT FACTS & FIGURESRESPONSIBILITYPERFORMANCE