Fujitsu 2004 Annual Report Download - page 43

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41
(j) Intangible assets
Goodwill is amortized by the straight-line method over periods not exceeding 20 years.
Computer software for sale is amortized based on the current year sales units to the projected total products’ sales units.
Computer software for internal use is amortized by the straight-line method over the estimated useful lives.
Other intangible assets are amortized by the straight-line method at the rates based on the estimated useful lives of the
respective assets.
(k) Leases
Receivable accounts recognized by the lessors in finance lease transactions are recorded as lease receivables and assets
acquired by lessees in finance lease transactions are recorded in the corresponding asset accounts.
(l) Retirement benefits
The Company and the majority of the consolidated subsidiaries have retirement benefit plans.
Under the significant defined benefit plans, the actuarial valuation used to determine the pension costs is the projected unit
credit method.
(m) Provision for loss on repurchase of computers
Certain computers manufactured by the Group are sold to Japan Electronic Computer Co., Ltd. (“JECC”) and other leasing
companies for leasing to ultimate users under contracts which require the Group to repurchase the computers if they are
returned by the users after a certain period. Based on past experience, an estimated amount for the loss arising from such
repurchases is provided at the point of sales and is charged to income.
(n) Income taxes
The Group has adopted the asset and liability method of tax effect accounting in order to recognize the effect of all
temporary differences in the recognition of assets and liabilities for tax and financial reporting purposes.
(o) Earnings per share
Basic earnings per share is computed based on the weighted average number of shares of common stock outstanding during
the respective years.
Diluted earnings per share is computed based on the weighted average number of shares after consideration of
the dilutive effect of the shares of common stocks issuable upon the exercise of warrants and the conversion of convertible
bonds.
(p) Derivative financial instruments
The Group uses derivative financial instruments for the purpose of hedging against the risk of fluctuations in interest rates
and foreign exchange rates on receivables and payables denominated in foreign currencies.
All derivative financial instruments are stated at fair market value. The Group defers gain or loss on changes in the fair
market values of the derivative financial instruments on the balance sheet until gain or loss on the hedged items are
recognized.