Sony 2003 Annual Report Download - page 159

Consolidated Financial Information 2003
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Notes to Consolidated Financial Statements
Sony Corporation and Consolidated Subsidiaries
1. Nature of operations
Sony Corporation and consolidated subsidiaries (hereinafter collectively referred to as “Sony”) are engaged in
the development, design, manufacture, and sale of various kinds of electronic equipment, instruments, and
devices for consumer and industrial markets. Sony also develops, produces, manufactures, and markets
home-use game consoles and software. Sony’s principal manufacturing facilities are located in Japan, the
United States of America, Europe, and Asia. Its electronic products are marketed throughout the world and
game products are marketed mainly in Japan, the United States of America and Europe by sales subsidiaries
and unaffiliated local distributors as well as direct sales via the Internet. Sony is engaged in the development,
production, manufacture, and distribution of recorded music, in all commercial formats and musical genres.
Sony is also engaged in the development, production, manufacture, marketing, distribution and broadcasting
of image-based software, including film, video and television. Further, Sony is engaged in various financial
service businesses including insurance operations through a Japanese life insurance subsidiary and non-life
insurance subsidiaries, banking operations through a Japanese internet-based banking subsidiary and leasing
and credit financing operations in Japan. In addition to the above, Sony is engaged in Internet-related
businesses and an advertising agency business in Japan.
2. Summary of significant accounting policies
Sony Corporation and its subsidiaries in Japan maintain their records and prepare their financial statements in
accordance with accounting principles generally accepted in Japan while its foreign subsidiaries maintain their
records and prepare their financial statements in conformity with accounting principles generally accepted in
the countries of their domiciles. Certain adjustments and reclassifications have been incorporated in the
accompanying consolidated financial statements to conform with accounting principles generally accepted in
the United States of America (“U.S. GAAP”). These adjustments were not recorded in the statutory books of
account.
(1) Accounting changes:
Impairment or Disposal of Long-Lived Assets -
On April 1, 2002, Sony adopted Statement of Financial Accounting Standards (“FAS”) No. 144, “Accounting
for the Impairment or Disposal of Long-Lived Assets”. FAS No. 144 supersedes FAS No. 121 “Accounting
for the Impairment of Long-Lived Assets and for Long-Lived Assets to be Disposed of” and the accounting
and reporting provisions of Accounting Principles Board Opinion (“APB”) No. 30 “Reporting the results of
Operations – Reporting the Effects of Disposal of a Segment of a Business, and Extraordinary, Unusual
and Infrequently Occurring Events and Transactions” for the disposal of segments of a business. FAS No.