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71
Annual Report 2006
<Outside Japan>
FS adopted International Financial Reporting Standards (“IFRS”) for the year ended March 31,
2006, and accounts for retirement benefits in accordance with IAS 19 “Employee Benefits.” For this
change in accounting principles and practices, FS adopted IFRS 1 “First-time Adoption of International
Financial Reporting Standards,” and recognized the projected benefit obligation in excess of plan assets
as of April 1, 2004 which is the beginning of the prior year of the IFRS adoption. FS recognized actuarial
gain or loss over future periods after the adoption of IFRS 1.
From the year ended March 31, 2006, Fujitsu Telecommunications Europe Limited (“FTEL”), a
consolidated subsidiary in the UK, recognized the full value of the unrecognized obligation immediately
as accrued retirement benefits, in accordance with a new UK accounting standard for the retirement
benefits (Financial Reporting Standard 17).
(NOTE) Guidelines of changes in accounting principles and practices in FS and FTEL are set previously in Note 1. (a) Basis of presenting consoli-
dated financial statements and the principles of consolidation.
Projected benefit obligation and plan assets
Yen U.S. Dollars
(millions) (thousands)
At March 31 2006 2006
Projected benefit obligation ¥(597,236) $(5,061,322)
Plan assets 448,619 3,801,856
Projected benefit obligation in excess of plan assets (148,617) (1,259,466)
Unrecognized actuarial loss 31,924 270,542
Accrued retirement benefits ¥(116,693) $ (988,924)
Components of net periodic benefit cost
Yen U.S. Dollars
(millions) (thousands)
Year ended March 31 2006 2006
Service cost ¥ 8,205 $ 69,534
Interest cost 27,436 232,509
Expected return on plan assets (25,370) (215,000)
Amortization of the unrecognized obligation for retirement benefit:
Amortization of actuarial loss 81 686
Net periodic benefit cost ¥ 10,352 $ 87,729
FS applied the “corridor” approach to amortization of actuarial loss.
The assumptions used in accounting for the plans
At March 31 2006
Discount rate Mainly 5.1%
Expected rate of return on plan assets Mainly 7.3%
Method of allocating actuarial loss Straight-line method over
the employees’ average remaining service period