Fujitsu 2014 Annual Report Download - page 126

the net cumulative unrecognized actuarial gains and losses at the end of the previous fiscal year exceed the greater of 10% of the pres-
ent value of the defined benefit obligation or 10% of the fair value of plan assets, the excess amount is recognized as an expense over
the expected average remaining service lives of employees. Starting this fiscal year, consolidated subsidiaries outside Japan recognize
actuarial gains and losses in accumulated other comprehensive income and do not recycle to the income statement in accordance with
the application of IAS 19. However, in the process of the Group’s consolidation, actuarial gains and losses are recycled to the income
statement in line with the “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). Actuarial
gains and losses are periodically recognized as an expense over the expected average remaining service lives of employees. 3) Recogni-
tion of the net interest on the net defined benefit liability (asset) replaces the recognition of the interest cost and the expected return on
plan assets previously required.
These changes in accounting policies are applied retrospectively, and the consolidated financial statements for the year ended
March 31, 2013 reflect this retrospective application.
As a result of retrospective application of these changes in the accounting policy, the amounts for operating income, income before
income taxes and minority interests, and net income have all been decreased by ¥7,006 million for the year ended March 31, 2013, respec-
tively. Other comprehensive income has decreased by ¥40,651 million and comprehensive income has decreased by ¥47,657 million.
The balance as of March 31, 2013 for investments and other non-current assets decreased by ¥128,728 million, long-term liabilities
increased by ¥28,643 million, net assets decreased by ¥157,371 million (of which retained earnings decreased by ¥7,006 million and
accumulated other comprehensive income decreased by ¥150,365 million). In addition, the balance of net assets as of the beginning of
the year ended March 31, 2013 decreased by ¥109,714 million (because accumulated other comprehensive income decreased by
¥109,714 million) as a result of reflecting the cumulative effects. The impact of these changes on earnings per share data and segment
information can be found under “20. Earnings per Share” and “18. Segment Information,” respectively.
(b) Translation of foreign currency accounts
Receivables and payables denominated in foreign currencies are translated into Japanese yen at the foreign currency exchange rates in
effect at the respective balance sheet dates.
The assets and liabilities accounts of the consolidated subsidiaries outside Japan are translated into Japanese yen at the exchange
rates in effect at the respective balance sheet dates. Income and expense accounts are translated at the average exchange rate during
the year. The resulting translation adjustments are recorded in a separate component of accumulated other comprehensive income as
“foreign currency translation adjustments.”
(c) Revenue recognition
Revenue from sales of ICT systems and products excluding customized software under development contracts (the “customized soft-
ware”) is recognized upon acceptance by the customers, whereas, revenue from sales of PCs, other equipment and electronic devices is
recognized when the products are delivered to the customers. Revenue from sales of the customized software is recognized by reference
to the percentage-of-completion method.
(d) Cash equivalents
Cash equivalents consist of short-term highly liquid investments with original maturities of three months or less from the date of acquisi-
tion and an insignificant risk of fluctuation in value, as well as overdrafts. Overdrafts are included in “Short-term borrowings and current
portion of long-term debt” under “Current liabilities” in the consolidated balance sheets.
(e) Investment securities
Investment securities included in “cash and cash equivalents,” “Investments in and long-term loans to affiliates” and “Others” under
“Investments and other non-current assets” are classified as investments in affiliates; held-to-maturity investments, which are the debt
securities that the Group has the positive intent and ability to hold to maturity; or available-for-sale securities, which are investment
securities not classified as investments in affiliates or held-to-maturity investments.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
124 FUJITSU LIMITED ANNUAL REPORT 2014