Sony 2001 Annual Report Download - page 119

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Sony Corporation Annual Report 2001
117
Assumptions used as of March 31, 1999, 2000 and 2001 were as follows:
Japanese plans:
March 31
1999 2000 2001
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.7% 2.7% 2.7%
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.0 4.0 4.0
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 3.0 3.0 3.0
Foreign plans:
March 31
1999 2000 2001
Discount rate . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 4.4–7.3% 4.5–7.5% 4.0–7.5%
Expected return on plan assets . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6.9–9.8 6.5–9.1 5.0–9.0
Rate of compensation increase . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 2.8–4.8 2.0–4.8 2.5–5.1
As required under FAS No. 87 “Employers’ Accounting for Pensions”, the assumptions are reviewed in accordance
with changes in circumstances. Amount arising from the actuarial loss for the year ended March 31, 2000 was
primarily due to the change in the method of calculating the benefit obligation to adjust for the backloading of the
benefits as well as to a review of certain assumptions.
Under FAS No. 87, Sony has recorded a pension liability to cover the amount of the projected benefit obligation
in excess of plan assets, considering unrealized items and the minimum pension liability. The minimum pension
liability represents the excess of the accumulated benefit obligation over plan assets and accrued pension and
severance costs already recognized before recording the minimum pension liability. A corresponding amount was
recognized as an intangible asset to the extent of the unrecognized prior service cost, and the balance was recorded
as a component of accumulated other comprehensive income, net of tax.
As of March 31, 2000, the accumulated benefit obligations and the fair value of plan assets for which Sony has
recognized the minimum pension liability on substantially all of the Japanese subsidiaries’ plans were ¥232,624
million and ¥140,147 million, respectively. As of March 31, 2001, the accumulated benefit obligations and the fair
value of plan assets for which Sony has recognized the minimum pension liability on Sony Corporation and
substantially all of the Japanese subsidiaries’ plans were ¥592,876 million ($4,743 million) and ¥425,554 million
($3,404 million), respectively.
As discussed in Note 8, in March 2001, Sony Corporation and consolidated subsidiaries contributed certain
marketable equity securities to an employee retirement benefit trust, which is included in plan assets.