Square Enix 2008 Annual Report Download - page 41

Retirement Benefits
• FY2006 (April 1, 2006 to March 31, 2007)
1. Overview of retirement benefit plan
The Company and its domestic consolidated subsid iaries have
a lump-sum retirement payment plan in accordance with their
internal bylaws.
The projected benefits are allocated to periods of service on
a straight-line basis. The Company’s domestic consolidated
subsidiaries apply a simplified method in the calculation of the
retirement benefit obligations. In addition, certain of the
Company’s overseas subsidiaries maintain defined contribution
retirement pension plans.
2. Retirement benefit obligation:
Millions of yen
Retirement benefit obligation ¥(10,612)
Fair value of plan assets 9,871
Net unfunded obligation (741)
Unrecognized prior service cost (1,138)
Unrecognized actuarial gain (289)
Allowance for retirement benefits ¥ (2,169)
3. Retirement benefit expenses:
Millions of yen
Service cost ¥600
Interest cost 172
Expected return on plan assets (170)
Amortization of prior service cost (406)
Amortization of net actuarial loss 190
Retirement benefit expenses ¥386
Note: Due to the restructuring of certain businesses, such as the amusement busi-
ness, in the fiscal year ended March 31, 2007, a substantial number of
employees retired, and the Company recognized a curtailment of its retire-
ment benefit plan in accordance with “Accounting for Transfers between
Retirement Benefit Schemes” (Application Guideline No. 1 of Business
Accounting Principles). As a result, the Company recognized a partial
reversal of allowance for employees’ retirement benefits and a lump-sum
amortization of unrecognized gain/loss amounting to ¥465 million as an
extraordinary gain, which was included in the amortization of prior service
cost and amortization of net actuarial gains and losses in the fiscal year
ended March 31, 2007.
In addition to the above, the Company recorded an extraordinary loss for
premium severance payments of ¥925 million.
4. Assumptions used in accounting for the above plans:
Periodic allocation method for projected benefits Straight-line basis
Discount rates 1.700%–2.093%
Expected rate of return on plan assets 1.700%
Period over which prior service cost is amortized 1–5 years
Period over which net actuarial gain or loss
is amortized 1–5 years
• FY2007 (April 1, 2007 to March 31, 2008)
1. Overview of retirement benefit plan
The Company and its domestic consolidated subsid iaries have a
lump-sum retirement payment plan in accordance with their
internal bylaws.
The projected benefits are allocated to periods of service on
a straight-line basis. The Company’s domestic consolidated
subsidiaries apply a simplified method in the calculation of the
retirement benefit obligations. In addition, certain of the
Company’s overseas subsidiaries maintain defined contribution
retirement pension plans.
2. Retirement benefit obligation:
Millions of yen
Retirement benefit obligation ¥(11,343)
Fair value of plan assets 8,830
Net unfunded obligation (2,513)
Unrecognized prior service cost (805)
Unrecognized actuarial loss 1,790
Allowance for retirement benefits ¥ (1,528)
3. Retirement benefit expenses:
Millions of yen
Service cost ¥ 509
Interest cost 180
Expected return on plan assets (158)
Amortization of prior service cost (333)
Amortization of net actuarial gain (201)
Retirement benefit expenses ¥ (3)
4. Assumptions used in accounting for the above plans:
Periodic allocation method for projected benefits Straight-line basis
Discount rates 1.700–2.026%
Expected rate of return on plan assets 1.700%
Period over which prior service cost is amortized 1–5 years
Period over which net actuarial gain or loss
is amortized 1–5 years
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