Fujitsu 2014 Annual Report Download - page 125

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Fujitsu Limited and Consolidated Subsidiaries
1. Significant Accounting Policies
(a) Basis of presenting consolidated financial statements and the principles of consolidation
The accompanying consolidated financial statements of Fujitsu Limited (the “Company”) and its consolidated subsidiaries (together, the
“Group”) have been prepared in accordance with the regulations under the Financial Instruments and Exchange Law of Japan and
accounting principles and practices generally accepted in Japan. In presenting the accompanying consolidated financial statements,
certain items have been reclassified for the convenience of readers outside Japan.
The consolidated financial statements include the accounts of the Company and, with minor exceptions, those of its majority-owned
subsidiaries.
The Company’s consolidated subsidiaries outside Japan prepare their financial statements in accordance with IFRS (International
Financial Reporting Standards). However, certain items, such as amortization of goodwill and amortization of actuarial gains and losses
associated with defined benefits, are adjusted in the process of consolidation based on “Practical Solution on Unification of Accounting
Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (Accounting Standards Board of Japan, Practical Issues
Task Force, No. 18 dated February 19, 2010).
The acquisition of companies is accounted for by the purchase method. Goodwill represents the excess of the acquisition cost over
the fair value of the net assets of the acquired companies.
Investments in affiliates, with minor exceptions, are accounted for by the equity method.
(Changes in the Accounting Policies for the Consolidated Financial Statements for the year ended March 31, 2014)
<Application of Accounting Standard for Retirement Benefits>
Effective from the end of the year ended March 31, 2014, the Company and its consolidated subsidiaries in Japan have applied “Account-
ing Standard for Retirement Benefits” (Accounting Standards Board of Japan, Statement No. 26, issued May 17, 2012, hereafter “Account-
ing Standard for Retirement Benefits”) and “Implementation Guidance on Accounting Standard for Retirement Benefits” (Accounting
Standards Board of Japan, Guidance No. 25, issued May 17, 2012, hereafter “Guidance on Accounting Standard for Retirement Benefits”).
The Company and its consolidated subsidiaries in Japan have chosen to forgo the earlier application of provisions on retirement benefit
obligations and service costs (paragraphs 16 through 21 in Accounting Standard for Retirement Benefits, and paragraphs 4 through 16
and paragraphs 22 through 32 in Guidance on Accounting Standard for Retirement Benefits).
Switching to a method by which the amount of plan assets are subtracted from retirement benefit obligations and the balance is
recorded in net defined benefit liability (asset), unrecognized actuarial gains and losses and past service costs are reflected in remeasure-
ments of defined benefit plans, net of taxes, under net assets, and recorded in net defined benefit liability (asset) as of March 31, 2014.
In accordance with the provision for transitional treatment as stated in paragraph 37 of the Accounting Standard for Retirement
Benefits, the Company and its consolidated subsidiaries in Japan have not applied the standard retrospectively, and the amount of the
impact stemming from this change is added to or subtracted from remeasurements of defined benefit plans, net of taxes, under accu-
mulated other comprehensive income as of March 31, 2014.
As a result, investments and other non-current assets as of March 31, 2014 have declined by ¥37,793 million ($366,922 thousand),
non-current liabilities have increased by ¥114,246 million ($1,109,184 thousand), and net assets fell by ¥152,039 million ($1,476,107
thousand), of which accumulated other comprehensive income declined by ¥146,756 million ($1,424,816 thousand) and minority inter-
ests in consolidated subsidiaries declined by ¥5,283 million ($51,291 thousand). There is no impact on the amounts of operating income,
income before income taxes and minority interests, net income, other comprehensive income and comprehensive income for the year
ended March 31, 2014. The impact of these changes on earnings per share data can be found in “20. Earnings per Share.”
<Application of IAS 19 “Employee Benefits”>
The Company’s consolidated subsidiaries outside Japan have applied IAS 19 “Employee Benefits” (issued June 16, 2011) at the beginning
of the year ended March 31, 2014.
The main changes resulting from the application of the accounting standard are as follows: 1) Regarding remeasurements of the net
defined benefit liability (asset), including actuarial gains and losses, the option of partial recognition is abolished, and instead immedi-
ate recognition through net assets, as remeasurements of defined benefit plans (net of tax effects) under accumulated other compre-
hensive income, is required. The funded status is recognized as a liability or asset. 2) Consolidated subsidiaries outside Japan had
applied the corridor approach for recognizing a portion of actuarial gains and losses as an expense. Under the corridor approach, when
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FUJITSU LIMITED ANNUAL REPORT 2014
MANAGEMENT FACTS & FIGURESRESPONSIBILITYPERFORMANCE