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SHARP ANNUAL REPORT 2006 50
9. Employees’ Severance and Pension Benefits
Projected benefit obligation...............................................................................
Less-Fair value of plan assets ...........................................................................
Less-Unrecognized actuarial differences...........................................................
Less-Unrecognized net transition obligation......................................................
Unrecognized prior service costs ......................................................................
Prepaid pension cost........................................................................................
Allowance for severance and pension benefits..................................................
In addition, allowance for severance and pension benefits of
¥808 million as of March 31, 2005, and ¥7,034 million ($60,638
thousand) as of March 31, 2006, were provided by certain overseas
consolidated subsidiaries in conformity with generally accepted
accounting principles and practices prevailing in the respective countries
of domicile.
$ 3,009,069
(3,077,388)
(235,172)
(48,440)
365,017
—
$ 13,086
¥ 349,052
(356,977)
(27,280)
(5,619)
42,342
—
¥ 1,518
¥ 340,898
(277,007)
(95,625)
(8,428)
45,345
19,018
¥ 24,201
200620062005
Yen
(millions) U.S. Dollars
(thousands)
Service costs .......................................................................................
Interest costs on projected benefit obligation .......................................
Expected return on plan assets............................................................
Amortization of net transition obligation................................................
Recognized actuarial loss ......................................................................
Amortization of prior service costs..........................................................
Expenses for severance and pension benefits......................................
$ 111,362
73,448
(107,483)
24,216
62,371
(26,698)
$ 137,216
¥ 12,918
8,520
(12,468)
2,809
7,235
(3,097)
¥ 15,917
The discount rate used by the Company and its domestic con-
solidated subsidiaries was 2.5% for the years ended March 31, 2005
and 2006. The rate of expected return on plan assets used by the
Company and its domestic consolidated subsidiaries for the years
ended March 31, 2005 and 2006 was 4.5%. The estimated
amount of all retirement benefits to be paid at future retirement dates
was allocated equally to each service year using the estimated num-
ber of total service years for the year ended March 31, 2005.
Effective for the year ended March 31, 2006, the Company and
most of its domestic consolidated subsidiaries amended their retire-
ment benefit plan to introduce a “point” based retirement benefit
plan. This plan amendment resulted in immaterial prior service costs.
According to this amendment, the estimated amount of all retire-
ment benefits to be paid at future retirement dates is allocated to
each service year mainly based on points.
20062006
Yen
(millions) U.S. Dollars
(thousands)
¥ 12,029
8,269
(11,484)
2,809
7,182
(3,091)
¥ 15,714
2005
Expenses for severance and pension benefits of the Company and its domestic consolidated subsidiaries for the years ended
March 31, 2005 and 2006 consisted of the following:
Allowance for severance and pension benefits of the Company and its domestic consolidated subsidiaries as of March 31, 2005 and
2006 consisted of the following: