Sony 2003 Annual Report Download - page 137

Consolidated Financial Information 2003
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Sony continues to evaluate the impact of FIN No. 46 on Sony’s results of operations and financial position.
However, Sony has identified potential VIEs created prior to February 1, 2003, which may be consolidated upon the
adoption of FIN No. 46. If these potential VIEs are consolidated, Sony would record a charge of approximately 1.8
billion yen as a cumulative effect of accounting change and an increase in assets and liabilities of approximately 97.3
billion yen. Refer to Note 23 of Notes to Consolidated Financial Statements and “Other Financing Arrangements” for
further discussion on the VIEs that are used by Sony. Sony did not enter into any new arrangements with VIEs during
the period February 1, 2003 through March 31, 2003.
Recent Pronouncements
Accounting for Asset Retirement Obligations
In June 2001, the FASB issued FAS No. 143, “Accounting for Asset Retirement Obligations”. This statement
addresses financial accounting and reporting for obligations associated with the retirement of tangible long-lived
assets and the associated asset retirement costs. Sony adopted FAS No. 143 on April 1, 2003. The adoption of FAS
No. 143 did not have a material impact on Sony’s results of operations and financial position.
Multiple Element Arrangements
In November 2002, the FASB issued EITF Issue No. 00-21, “Accounting for Revenue Arrangements with Multiple
Deliverables”. EITF Issue No. 00-21 provides guidance on when and how to account for arrangements that involve
the delivery or performance of multiple products, services and/or rights to use assets. The provisions of EITF Issue
No. 00-21 will apply to revenue arrangements entered into in fiscal periods beginning after June 15, 2003. Sony is
currently evaluating the impact of adopting this guidance.
Derivative Instruments and Hedging Activities
In April 2003, the FASB issued FAS No. 149, “Amendment of Statement 133 on Derivative Instruments and
Hedging Activities”. This statement amends and clarifies financial accounting and reporting for derivative instruments,
including derivative instruments embedded in other contracts and for hedging activities under FAS No. 133. Sony is
currently evaluating the impact of adopting this new pronouncement.
Accounting for Certain Financial Instruments with Characteristics of both Liabilities and Equity
In May 2003, the FASB issued FAS No. 150, “Accounting for Certain Financial Instruments with Characteristics
of both Liabilities and Equity”. FAS No. 150 establishes standards for how certain financial instruments with
characteristics of both liabilities and equity shall be classified and measured. This statement is effective for financial
instruments entered into or modified after May 31, 2003, and otherwise is effective at the beginning of the first interim