Fujitsu 2007 Annual Report Download - page 65

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Notes to Consolidated Financial Statements
Fujitsu Limited and Consolidated Subsidiaries
1. Significant Accounting Policies
(a) Basis of presenting consolidated financial statements and the principles of consolidation
The accompanying consolidated financial statements of Fujitsu Limited (the “Company”) and its con-
solidated subsidiaries (together, the “Group”) have been prepared in accordance with the regulations
under the Securities and Exchange Law of Japan and accounting principles and practices generally accepted
in Japan. The consolidated subsidiaries outside Japan have adopted the accounting principles and prac-
tices in their respective countries. In presenting the accompanying consolidated financial statements,
certain items have been reclassified for the convenience of readers outside Japan.
Certain accounting principles and practices generally accepted in Japan are different from Interna-
tional Financial Reporting Standards (“IFRS”) and accounting principles and practices in other countries
in certain respects as to applications and disclosure requirements. The differences between the account-
ing principles and practices adopted by the Group and those prescribed by IFRS are set forth in Note 2.
The consolidated financial statements include the accounts of the Company and, with minor excep-
tions, those of its majority-owned subsidiaries.
The acquisition of companies is accounted for by the purchase method. Goodwill represents the
excess of the acquisition cost over the fair value of the net assets of the acquired companies.
Investments in affiliates, with minor exceptions, are accounted for by the equity method.
<Changes in accounting principles and practices for the year ended March 31, 2007>
Effective from the fiscal year ended March 31, 2007, the Company and its consolidated subsidiaries in
Japan have adopted a new accounting standard in Japan for the presentation of net assets in the consoli-
dated balance sheets.
The sum of figures stated as “Shareholders’ equity” and “Minority interests in consolidated subsidiar-
ies” in the financial statements prior to and for the year ended March 31, 2006, has been reclassified as
“Net assets” for comparative purposes.
<Changes in accounting principles and practices for the year ended March 31, 2006>
For the year ended March 31, 2006, Fujitsu Services Holdings PLC, a UK subsidiary, and its consoli-
dated subsidiaries (together, “FS”) have voluntarily adopted IFRS in line with listed companies in the
EU. Prior to the adoption of IFRS, FS had been applying the accounting principles and practices gener-
ally accepted in the UK. The amounts in the consolidated financial statements prior to and for the year
ended March 31, 2005, have not been restated.
For the year ended March 31, 2006, the adoption of IFRS had the effect to decrease net sales by
¥5,032 million and increase operating income and income before income taxes and minority interests by
¥6,109 million and ¥5,192 million, respectively. The impact of this change to the segment information is
set forth in Note 19.
For the year ended March 31, 2006, Fujitsu Telecommunications Europe Limited, another UK sub-
sidiary, recognized pension obligation which had not been recognized before in conformity with the new
UK accounting standard for the retirement benefits (Financial Reporting Standard 17). The adoption of
this standard, however, did not have a material impact on net income for the year ended March 31, 2006.
As a result of the above changes, cumulative effect as of April 1, 2005 of ¥85,980 million had been
charged to retained earnings (deficit).
Annual Report 2007 63