Sony 2001 Annual Report Download - page 88

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Sony Corporation Annual Report 2001
86
NEW STATEMENTS OF FINANCIAL ACCOUNTING STANDARDS
Derivative Instruments and Hedging Activities:
On April 1, 2001, Sony adopted Statement of Financial Accounting Standards (“FAS”) No. 133, “Accounting for
Derivative Instruments and Hedging Activities” as amended by FAS No. 138 “Accounting for Certain Derivative
Instruments and Certain Hedging Activities — an Amendment of FASB statement No. 133.” FAS No. 133, as
amended, establishes accounting and reporting standards for derivative instruments. Specifically, FAS No. 133
requires an entity to recognize all derivatives as either assets or liabilities in the balance sheet and to measure
those instruments at fair value. Additionally, the fair value adjustments will affect either stockholders’ equity or
net income depending on whether the derivative instrument qualifies as a hedge for accounting purposes and, if
so, the nature of the hedging activity. On April 1, 2001, upon the adoption of the new standard, Sony recorded an
unrealized gain of 1.1 billion yen in accumulated other comprehensive income in the consolidated balance sheet
and an after-tax gain of 6.0 billion yen as the cumulative effect of an accounting change in the consolidated
statements of income for the fiscal year ending March 31, 2002.
May 31, 2001
Teruhisa Tokunaka
Executive Deputy President and Chief Financial Officer