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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 consolidated subsidiaries (together, the
“Group”) have been prepared in accordance with the regulations under the Financial Instruments and Exchange Law of Japan and
accounting principles and practices generally accepted in Japan. In presenting the accompanying consolidated financial statements,
certain items have been reclassified for the convenience of readers outside Japan.
The consolidated financial statements include the accounts of the Company and, with minor exceptions, those of its majority-
owned subsidiaries.
The Company’s consolidated subsidiaries outside Japan prepare their financial statements in accordance with IFRS (International
Financial Reporting Standards).
However, certain items, such as amortization of goodwill, are adjusted in the process of consolidation based on “Practical Solution
on Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements” (Accounting Standards Board
of Japan, Practical Issues Task Force, No. 18 dated February 19, 2010).
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.
(b) Translation of foreign currency accounts
Receivables and payables denominated in foreign currencies are translated into Japanese yen at the foreign currency exchange rates in
effect at the respective balance sheet dates.
The assets and liabilities accounts of the consolidated subsidiaries outside Japan are translated into Japanese yen at the exchange
rates in effect at the respective balance sheet dates. Income and expense accounts are translated at the average exchange rate during
the year. The resulting translation adjustments are recorded in a separate component of accumulated other comprehensive income as
“foreign currency translation adjustments.”
(c) Revenue recognition
Revenue from sales of ICT systems and products excluding customized software under development contracts (the “customized soft-
ware”) is recognized upon acceptance by the customers, whereas, revenue from sales of PCs, other equipment and electronic devices is
recognized when the products are delivered to the customers. Revenue from sales of the customized software is recognized by reference
to the percentage-of-completion method.
(d) Cash equivalents
Cash equivalents consist of short-term highly liquid investments with original maturities of three months or less from the date of acquisi-
tion and an insignificant risk of fluctuation in value, as well as overdrafts. Overdrafts are included in “Short-term borrowings and current
portion of long-term debt” under “Current liabilities” in the consolidated balance sheets.
(e) Investment securities
Investment securities included in “Cash and cash equivalents,” “Investments in and long-term loans to affiliates” and “Others” under
“Investments and other non-current assets” are classified as investments in affiliates; held-to-maturity investments, which are the debt
securities that the Group has the positive intent and ability to hold to maturity; or available-for-sale securities, which are investment
securities not classified as investments in affiliates or held-to-maturity investments.
Investments in affiliates are accounted for by the equity method. Held-to-maturity investments are stated at amortized cost,
adjusted for the amortization of premiums or accretion of discounts to maturity. Available-for-sale securities are basically carried at fair
value. However, unlisted securities are carried at the acquisition cost, and classified as “financial instruments for which it is extremely
difficult to determine the fair value,” as no market price is available and it is not possible to estimate the future cash flow. The cost of
available-for-sale securities sold is calculated by the moving average method.
Available-for-sale securities are carried at fair market value, with the unrealized gains or losses, net of taxes, included in accumu-
lated other comprehensive income.
113
FUJITSU LIMITED ANNUAL REPORT 2013
FACTS & FIGURES