Ricoh 2005 Annual Report Download - page 38

37 ANNUAL REPORT 2005
Gross unrealized holding losses on available-for-sale securities and the fair value of the related securities, aggregated by investment category and length of time that
individual securities have been in a continuous unrealized loss position at March 31, 2005 were as follows:
Millions of Yen
Less than 12 months 12 months or longer
Gross Gross
unrealized unrealized
Fair value holding losses Fair value holding losses
2005:
Noncurrent:
Available-for-sale:
Equity securities ¥ 1 5 7 ¥ 4 9 – –
Thousands of U.S. Dollars
Less than 12 months 12 months or longer
Gross Gross
unrealized unrealized
Fair value holding losses Fair value holding losses
2005:
Noncurrent:
Available-for-sale:
Equity securities $ 1 ,4 6 7 $ 4 5 8 – –
The contractual maturities of debt securities classified as available-for-sale as of March 31, 2005, regardless of their balance sheet classification, are as follows:
Millions of Yen Thousands of U.S. Dollars
Cost Fair value Cost Fair value
Due within one year ¥ 1 3 7 ¥ 1 3 7 $ 1 ,2 8 1 $ 1 ,2 8 1
Due after one year through five years 6,000 6,045 56,075 56,495
¥6,137 ¥6,182 $57,356 $57,776
Proceeds from the sales of available-for-sale securities were ¥24,513
million, ¥45,464 million and ¥118,120 million ( $1,103,925 thousand)
for the years ended March 31, 2003, 2004 and 2005, respectively.
There were no significant realized gains or losses of available-for-sale
securities for the three years ended March 31, 2005 except for the
contributed marketable equity securities to the Company’s employee
benefit trust as discussed pelow. The loss on securities of ¥2,260 million
for the year ended March 31, 2003 was charged to other expense for
declines in market value of available-for-sale securities where the
decline was determined to be other than temporary.
In March 2000, the Company contributed certain marketable equity
securities, not including those of its subsidiaries and affiliated
companies, to its employee retirement benefit trust ( the “Trust”) fully
administered and controlled by an independent bank trustee, with no
cash proceeds thereon ( the “2000 Transfer”). The 2000 Transfer of the
available-for-sale securities was accounted for as a sale in accordance
with SFAS No.125, “Accounting for Transfer and Servicing of Financial
Assets and Extinguishments of Liabilities” and accordingly the recorded
pension liability was reduced by the fair market value amount of the
transferred securities. The fair value of these securities at the time of
transfer was ¥20,760 million. The net unrealized gains on these
available-for-sale securities amounting to ¥13,095 million were initially
included in “Accumulated other comprehensive income ( loss)” on the
consolidated balance sheets with the expectation of being reflected in
realized gains in the statements of income upon the future sale of the
transferred securities by the trustee.
In March 2004, the Company contributed certain additional marketable
equity securities, not including those of its subsidiaries and affiliated
companies to the Trust, with no cash proceeds thereon ( the “2004
Transfer”). The fair value and net unrealized gains on these available-
for-sale securities at the time of transfer were ¥3,648 million and ¥2,658
million, respectively.
In fiscal 2004, Ricoh changed its accounting policy with respect to the
recognition of unrealized gains and losses as realized in the statements
of income on transfers of marketable equity securities to its employee
retirement benefit trusts. Ricoh concluded that it is preferable to
recognize in the statements of income unrealized gains or losses
associated with marketable equity securities transferred to the Trust
when Ricoh has effectively given up the economic rewards of
ownership, that is, when the assets are no longer considered corporate
assets and when the Trust has the irrevocable and unrestricted right to
realize those benefits as and when it chooses. This generally occurs at
the time the assets are transferred to the Trust and not upon future sale
of the assets by the trustee.
Accordingly, Ricoh recognized realized gains in the consolidated
statement of income on the transfer of marketable equity securities to
the Trust for fiscal 2004 of ¥2,658 million. In addition, Ricoh
recognized in its fiscal 2004 consolidated statement of income a
cumulative effect of accounting change, net of tax, of ¥7,373 million
associated with the 2000 Transfer.