Fujitsu 2004 Annual Report Download - page 49

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Under a new accounting standard in Japan for the year ended March 31, 2001, the Company fully recognized in income
the Company’s portion of the unrecognized net obligation at transition. For additional plan assets to cover the
unrecognized net obligation at transition, the Company placed its holding of marketable securities in trust which was solely
established for the retirement benefit plan.
The major defined benefit pension plan provided outside Japan is the plan that Fujitsu Services group provides in the
UK. This plan is subject to formal actuarial valuation in accordance with the UK accounting standard SSAP24 (Statements
of Standard Accounting Practice 24).
The Accounting Standards Board of the UK has issued a new UK accounting standard, FRS17 (Financial Reporting
Standard 17). It is proposed that FRS17 will be fully effective as the replacement of SSAP24 for accounting periods
beginning on or after January 1, 2005. In accordance with the transitional arrangements set out in FRS17, certain
disclosures are required using different measurement bases laid down in FRS17.
The projected benefit obligation and the fair value of the plan assets in accordance with FRS17 are summarized as follows:
Applying the transitional provisions as prescribed in paragraph 47-2 of “Practical Guidelines of Accounting and
Retirement Benefits-Interim Report” (Accounting Committee Report No.13 issued by the Japanese Institute of Certified
Public Accountants), the Company and certain consolidated subsidiaries in Japan accounted for the elimination of the
future and past benefit obligations of the substitutional portion as well as the related government-specified portion of the
employees’ pension plan assets at the date of the approval.
The amount of pension assets which were to be transferred to the Japanese Government was valued at ¥310,657 million
($2,930,726 thousand) at March 31, 2004.
The figures presented above for the year ended March 31, 2003 included the substitutional portion of benefit obligation.
Components of net periodic benefit cost Yen U.S.Dollars
(millions) (thousands)
Years ended March 31 (Consolidated domestic accounts) 2002 2003 2004 2004
Service cost ¥ 59,307 ¥ 57,011 ¥ 53,613 $ 505,783
Interest cost 46,777 49,363 48,004 452,868
Expected return on plan assets (41,400) (42,654) (36,125) (340,802)
Amortization of unrecognized obligation
for retirement benefits:
Amortization of net obligation
at transition 26,311 26,487 25,435 239,953
Amortization of actuarial loss 18,508 26,403 39,578 373,377
Amortization of prior service cost (9,095) (8,989) (8,070) (76,132)
Net periodic benefit cost ¥100,408 ¥107,621 ¥122,435 $1,155,047
Gain on transfer of substitutional portion
of employees’ pension funds — — (146,532) (1,382,377)
Total ¥100,408 ¥107,621 ¥ (24,097) $ (227,330)
The assumptions used in accounting for the plans
At March 31 (Consolidated domestic accounts) 2003 2004
Discount rate 3.0% 2.5%
Expected rate of return on plan assets 4.3% 4.5%
Method of allocating actuarial loss Straight-line method over Straight-line method over
the employees’ average remaining the employees’ average remaining
service period service period
Method of allocating prior service obligation Straight-line method over Straight-line method over
10 years 10 years
Amortization period for net obligation at transition The Company: The Company:
Fully recognized at transition Fully recognized at transition
Consolidated subsidiaries in Consolidated subsidiaries in
Japan: 10 years Japan: 10 years
Projected benefit obligation and plan assets Yen U.S.Dollars
(millions) (thousands)
At March 31 2003 2004 2004
Projected benefit obligation ¥(322,898) ¥(348,759) $(3,290,179)
Plan assets 207,637 257,427 2,428,556
Deficit in the Plan ¥(115,261) ¥ (91,332) $ (861,623)
Discount rate 5.75% 5.90%