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28 TOSHIBA Annual Report 2012
Toshiba Corporation and Subsidiaries
March 31, 2012
Notes to Consolidated Financial Statements
DERIVATIVE FINANCIAL INSTRUMENTS
The Group uses a variety of derivative financial instruments, which include forward exchange contracts, interest rate
swap agreements, currency swap agreements and currency options for the purpose of currency exchange rate and
interest rate risk management. Refer to Note 21 for descriptions of these financial instruments.
The Group recognizes all derivative financial instruments, such as forward exchange contracts, interest rate swap
agreements, currency swap agreements and currency options in the consolidated financial statements at fair value
regardless of the purpose or intent for holding the derivative financial instruments. Changes in the fair value of derivative
financial instruments are either recognized periodically in income or in equity as a component of accumulated other
comprehensive income (loss) depending on whether the derivative financial instruments qualify for hedge accounting,
and if so, whether they qualify as a fair value hedge or a cash flow hedge. Changes in fair value of derivative financial
instruments accounted for as fair value hedges are recorded in income along with the portion of the change in the fair
value of the hedged item that relates to the hedged risk. Changes in fair value of derivative financial instruments
accounted for as cash flow hedges, to the extent they are effective as a hedge, are recorded in accumulated other
comprehensive income (loss), net of tax. Changes in the fair value of derivative financial instruments not qualifying as a
hedge are reported in income.
SALES OF RECEIVABLES
The Group has transferred certain trade notes and accounts receivable under several securitization programs. When a
transfer of financial assets is eligible to be accounted for as a sale under ASC No.860 “Transfers and Servicing” (“ASC
No.860”) , these securitization transactions are accounted for as a sale and the receivables sold under these facilities are
excluded from the accompanying consolidated balance sheets.
ASSET RETIREMENT OBLIGATIONS
The Group records asset retirement obligations at fair value in the period incurred. The fair value of the liability is added
to the carrying amount of the associated asset. This additional carrying amount is then depreciated over the life of the
asset. The liability increases due to the passage of time based on the time value of money until the obligation is settled.
Subsequent to the initial recognition, the liability is adjusted for any revisions to the expected amount of the retirement
obligation, and for accretion of the liability due to the passage of time.
RECENT PRONOUNCEMENTS
In June 2011, the Financial Accounting Standards Board (“FASB”) issued ASU No.2011-05. ASU No.2011-05 amends ASC
No.220 “Comprehensive Income”, and eliminates the option to present the other comprehensive income as part of the
statement of changes in stakeholder's equity. Therefore, the Company is required to report comprehensive income in
either a single continuous statement or two separate but consecutive statements. ASU No.2011-05 is effective for fiscal
years beginning after December 15, 2011 and the Company will adopt ASU No.2011-05 effective April 1, 2012. The
Company is currently examining both presentations mentioned above. The adoption of ASU No.2011-05 will not impact
the Company's financial position and results of operations.
In September 2011, the FASB issued ASU No.2011-08. ASU No.2011-08 amends ASC No.350 “Intangibles-Goodwill and
other” (“ASC No.350”) and provides entities an option to perform a qualitative assessment to determine whether it is
necessary to perform the two-step goodwill impairment test. ASU No.2011-08 is effective for fiscal years beginning after
December 15, 2011. The Company is currently evaluating the impact of adoption of ASU No.2011-08 on the Company's
consolidated financial statements.
SUBSEQUENT EVENTS
The Group has evaluated subsequent events up to June 22, 2012 in accordance with ASC No.855 “Subsequent Events”.
RECLASSIFICATIONS
Certain reclassifications to the prior year's consolidated financial statements and related footnote amounts have been
made to conform to the presentation for the current year.