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58 Fujitsu Limited
Components of net periodic benefit cost
Yen U.S. Dollars
(millions) (thousands)
Years ended March 31 (Consolidated domestic accounts) 2003 2004 2005 2005
Service cost ¥ 57,011 ¥ 53,613 ¥49,892 $ 466,280
Interest cost 49,363 48,004 29,511 275,804
Expected return on plan assets (42,654) (36,125) (30,733) (287,224)
Amortization of unrecognized obligation
for retirement benefits:
Amortization of net obligation at transition 26,487 25,435 16,691 155,991
Amortization of actuarial loss 26,403 39,578 22,609 211,299
Amortization of prior service cost (8,989) (8,070) (5) (47)
Net periodic benefit cost ¥107,621 ¥ 122,435 ¥87,965 $ 822,103
Gain on transfer of substitutional portion
of employees’ pension funds — (146,532) ——
Total ¥107,621 ¥ (24,097) ¥87,965 $ 822,103
The assumptions used in accounting for the plans
At March 31 (Consolidated domestic accounts) 2004 2005
Discount rate 2.5% 2.5%
Expected rate of return on plan assets 4.5% 3.8%
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 Straight-line method over Straight-line method over
service cost 10 years 10 years
Amortization period for net obligation The Company: The Company:
at transition Fully recognized at transition Fully recognized at transition
Consolidated subsidiaries in Consolidated subsidiaries in
Japan: 10 years Japan : 10 years
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 (State-
ments 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 disclo-
sures are required using different measurement bases laid down in FRS17.