Sony 2001 Annual Report Download - page 112

Sony Corporation Annual Report 2001
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10. Accumulated amortization of intangibles and goodwill
Accumulated amortization of intangibles and goodwill amounted to ¥202,750 million and ¥263,510 million ($2,108
million) at March 31, 2000 and 2001, respectively.
11. Insurance-related accounts
Sony’s life and non-life insurance subsidiaries in Japan maintain their accounting records as described in Note 2 in
accordance with the accounting principles and practices generally accepted in Japan, which vary in some respects
from U.S. GAAP.
Those differences are mainly that insurance acquisition costs are charged to income when incurred in Japan
whereas in the United States of America those costs are deferred and amortized generally over the premium-paying
period of the insurance policies, and that future policy benefits calculated locally under the authorization of the
supervisory administrative agencies are comprehensively adjusted to a net level premium method with certain
adjustments of actuarial assumptions for U.S. GAAP purposes. For purposes of preparing the consolidated financial
statements, appropriate adjustments have been made to reflect such items in accordance with U.S. GAAP.
The amounts of statutory net equity of the subsidiaries as of March 31, 2000 and 2001 were ¥49,791 million
and ¥101,106 million ($809 million), respectively.
(1) Deferred insurance acquisition costs:
Insurance acquisition costs, such as commission expenses, medical examination and inspection report fees,
advertising costs, etc., that vary with and are primarily related to acquiring new insurance policies are deferred
as long as they are recoverable. The deferred insurance acquisition costs are amortized mainly over the premium-
paying period of the related insurance policies using assumptions consistent with those used in computing
policy reserves. Amortization charged to income for the years ended March 31, 1999, 2000 and 2001 amounted
to ¥20,669 million, ¥22,708 million and ¥38,886 million ($311 million), respectively.
(2) Future insurance policy benefits:
Liabilities for future policy benefits are established in amounts adequate to meet the estimated future obligations
of policies in force. These liabilities are computed by the net level premium method based upon estimates as to
future investment yield, mortality and withdrawals. Future policy benefits are computed using interest rates
ranging from approximately 1.75% to 5.5%, generally graded down after 10 to 20 years. Mortality, morbidity
and withdrawal assumptions for all policies are based on either the life insurance subsidiary’s own experience or
various actuarial tables. At March 31, 2000 and 2001, future insurance policy benefits amounted to ¥1,070,303
million and ¥1,217,972 million ($9,744 million), respectively.
(3) Separate account assets:
Separate account assets are funds on which investment income and gains or losses accrue directly to certain
policyholders. Separate account assets are legally segregated. They are not subject to the claims that may arise
out of any other business of a life insurance subsidiary. Separate account assets, which consist primarily of debt and
equity securities, are carried at fair value and included in securities investments and other. The related liabilities are
recognized as separate account liabilities and included in future insurance benefits and other. Fees earned for
administrative and contract-holder services performed for the separate accounts are recognized as insurance revenue.