Sony 2003 Annual Report Download - page 174

Consolidated Financial Information 2003
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conversion, exercise, or contingent issuance of securities.
There are no potentially dilutive securities for net income per subsidiary tracking stock, as tracking stock
shares outstanding are increased upon potential subsidiary tracking stocks’ being exercised, which results
in a proportionate increase in earnings allocated to the subsidiary tracking stock. However, they could have
a dilutive effect on net income per common stock, as earnings allocated to the common stock would be
decreased.
EPS for all periods is appropriately adjusted for any free distributions of common stock which have been
completed.
(3) 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. This statement shall be effective for
fiscal years beginning after June 15, 2002. 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