Sony 2003 Annual Report Download - page 64

Sony Corporation Annual Report 200362
5. In December 2002, the FASB issued FAS No. 148, “Accounting for Stock-Based Compensation — Transition and Disclosure — an
Amendment of FASB Statement No. 123.” Sony has accounted for its employee stock-based compensation in accordance with Account-
ing Principles Board Opinion (“ APB”) No. 25, “ Accounting for Stock Issued to Employees” and, therefore, the adoption of the provisions
of FAS No. 148 did not have an impact on Sony’s results of operations and financial position.
6. In January 2003, the FASB issued FIN No. 46, “Consolidation of Variable Interest Entities — an Interpretation of ARB No. 51.” This
interpretation addresses consolidation by a primary beneficiary of a variable interest entity (“VIE”). FIN No. 46 is effective immediately for
all new variable interest entities created or acquired after January 31, 2003. For variable interest entities created or acquired prior to
February 1, 2003, the provisions of FIN No. 46 become effective for Sony during the second quarter of the year ending M arch 31, 2004.
Sony did not enter into any new arrangements with VIEs during the period February 1, 2003 through March 31, 2003.
7. On April 1, 2001, Sony adopted 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.”
As a result, Sony’s operating income, income before income taxes and net income for the year ended March 31, 2002 decreased by ¥3.0
billion, ¥3.4 billion and ¥2.2 billion, respectively. Additionally, Sony recorded a one-time non-cash after-tax unrealized gain of ¥1.1
billion in accumulated other comprehensive income in the consolidated balance sheet, as w ell as an after-tax gain of ¥6.0 billion in the
cumulative effect of accounting changes in the consolidated statement of income.
8. In July 2001, the FASB issued FAS No. 142, “Goodwill and Other Intangible Assets.” Sony adopted FAS No. 142 retroactive to April 1,
2001. As a result, Sony’s operating income and income before income taxes for the year ended March 31, 2002 increased by ¥20.1
billion and income before cumulative effect of accounting changes as w ell as net income for the year ended March 31, 2002 increased
by ¥18.9 billion.
9. In the fourth quarter of the year ended March 31, 2002, Sony adopted “ EITF” Issue No. 00-25, “Vendor Income Statement Characterization
of Consideration Paid to a Reseller of the Vendor’s Products,” which was later codified along with other similar issues into EITF Issue
No. 01-09, “Accounting for Consideration Given by a Vendor to a Customer or Reseller of the Vendor’s Products,” retroactive to April 1,
2001. As a result, Sony has restated sales and operating revenue for the first three quarters of the year ended March 31, 2002.