Sony 2003 Annual Report Download - page 114

Consolidated Financial Information 2003
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worldwide efforts to strengthen inventory control. On a product category basis, inventories decreased in the
Televisions, Video and Audio categories. In the Game segment, overall inventories increased 24.4 billion yen, or 20.5
percent, to 143.4 billion yen due to an increase in PlayStation 2 hardware inventories and an increase in inventories
of semiconductors brought on by the establishment of increased production capacity during the fiscal year.
Current assets on March 31, 2003 in the Financial Services segment increased by 61.2 billion yen, or 9.8
percent, to 687.9 billion yen, compared with the previous fiscal year-end. The increase was primarily attributable to
an increase in the value of investment assets in marketable securities held by the banking business.
Investments and Advances
Investments and advances on March 31, 2003 increased by 296.3 billion yen, or 17.5 percent, to 1,994.1 billion
yen, compared with the previous fiscal year.
Investments and advances on March 31, 2003 in all segments excluding the Financial Services segment
decreased by 47.6 billion yen, or 11.3 percent, to 372.7 billion yen. This decrease was mainly due to the recognition
of equity in net losses of affiliated companies such as SEMC.
Investments and advances on March 31, 2003 in the Financial Services segment increased by 353.2 billion yen,
or 25.4 percent, to 1,741.7 billion yen, compared with the previous fiscal year-end. This increase was primarily due to
an increase in investment assets in securities investments and other held by Sony Life.
Sony regularly evaluates its investment portfolio to identify other-than-temporary impairments of individual
securities. Factors that are considered by Sony in determining whether an other-than-temporary decline in value has
occurred include: the length of time and extent to which the market value of the security has been less than its original
cost, the financial condition, operating results, business plans and estimated future cash flows of the issuer of the
security, other specific factors affecting the market value, deterioration of issuer’s credit condition, sovereign risk, and
whether or not Sony is able to retain the investment for a period of time sufficient to allow for the anticipated recovery
in market value.
In evaluating the factors for available-for-sale securities whose fair values are readily determinable,
management presumes a decline in value to be other-than-temporary if the fair value of the security is 20 percent or
more below its original cost for an extended period of time (generally a period of up to six to twelve months). This
criteria is employed as a threshold to identify securities which may have a decline in value that is
other-than-temporary. The presumption of an other-than-temporary impairment in such cases may be overcome if
there is evidence to support that the decline is temporary in nature due to the existence of other factors which
overcome the duration or magnitude of the decline. On the other hand, there may be cases where impairment losses
are recognized when the decline in the fair value of the security is not more than 20 percent or such decline has not
existed for an extended period of time, as a result of considering specific factors which may indicate the decline in the
fair value is other-than-temporary.
The assessment of whether a decline in the value of an investment is other-than-temporary is often judgmental
in nature and involves certain assumptions and estimates concerning the expected operating results, business plans