Toshiba 2009 Annual Report Download - page 90

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Notes to Consolidated Financial Statements
Toshiba Corporation and Subsidiaries
M arch 31, 2009
13. ACCRUED PENSION AND SEVERANCE COSTS
All employees who retire or are terminated are usually entitled to lump-sum severance indemnities or pension benefits deter-
mined by reference to service credits allocated to employees each year according to the regulation of retirement benefit,
length of service and conditions under which their employment terminates. The obligation for the severance indemnity bene-
fit is provided for through accruals and funding of the defined benefit corporate pension plan.
Certain subsidiaries in Japan have tax-qualified non-contributory pension plans which cover all or a part of the indemnities
payable to qualified employees at the time of termination. The funding policy for the plans is to contribute amounts required
to maintain sufficient plan assets to provide for accrued benefits, subject to the limitation on deductibility imposed by
Japanese income tax laws.
On March 31, 2007, the Company adopted SFAS 158, Employers’ Accounting for Defined Benefit Pension and Other Postretirement
Plans, an amendment of FASB Statements No. 87, 88, 106 and 132(R) (“SFAS 158”). SFAS 158 required the Company to recog-
nize the funded status (i.e., the difference between the fair value of plan assets and the benefit obligations) of its pension plan
in the March 31, 2007 statement of financial position, with a corresponding adjustment to accumulated other comprehensive
income (loss), net of tax. The adjustment to accumulated other comprehensive income (loss) at adoption represents the net
unrecognized actuarial losses, unrecognized prior service costs, and unrecognized transition obligation remaining from the
initial adoption of SFAS 87, all of which were previously accounted for pursuant to the provisions of SFAS 87. These
amounts will be subsequently recognized as net periodic pension cost pursuant to the Company’s historical accounting policy
for amortizing such amounts. Further, actuarial gains and losses that arise in subsequent periods and are not recognized as
net periodic pension cost in the same periods will be recognized a component of other comprehensive income. Those
amounts will be subsequently recognized as a component of net periodic pension cost on the same basis as the amounts rec-
ognized in accumulated other comprehensive income (loss) at adoption of SFAS 158.
The changes in the benefit obligation and plan assets for the years ended March 31, 2009 and 2008 and the funded status at
March 31, 2009 and 2008 are as follows:
Thousands of
M illions of yen U.S. dollars
M arch 31 2009 2008 2009
Change in benefit obligation:
Benefit obligation at beginning of year ¥1,463,335 ¥ 1,453,820 $ 14,931,990
Service cost 52,574 53,038 536,469
Interest cost 39,697 38,190 405,072
Plan participants’contributions 3,940 4,221 40,204
Plan amendments (1,694) 9,760 (17,286)
Actuarial gain (99,518) (10,001) (1,015,490)
Benefits paid (73,622) (70,710) (751,245)
Acquisitions and divestitures 2,813 —28,704
Foreign currency exchange impact (6,734) (14,983) (68,714)
Benefit obligation at end of year ¥1,380,791 ¥1,463,335 $ 14,089,704
Change in plan assets:
Fair value of plan assets at beginning of year ¥ 828,457 ¥ 911,649 $ 8,453,643
Actual return on plan assets (187,207) (93,882) (1,910,276)
Employer contributions 64,358 60,918 656,714
Plan participants’contributions 3,940 4,221 40,204
Benefits paid (46,165) (43,454) (471,071)
Acquisitions and divestitures 3,171 —32,357
Foreign currency exchange impact (5,855) (10,995) (59,745)
Fair value of plan assets at end of year ¥ 660,699 ¥ 828,457 $ 6,741,826
Funded status ¥ (720,092) ¥ (634,878) $ (7,347,878)