Sony 2005 Annual Report Download - page 97

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94 Sony Corporation
8. Marketable securities and securities investments and other
Marketable securities and securities investments and other include debt and equity securities of which the aggregate cost, gross
unrealized gains and losses and fair value pertaining to available-for-sale securities and held-to-maturity securities are as follows:
Yen in millions
March 31, 2004 March 31, 2005
Gross Gross Gross Gross
unrealized unrealized unrealized unrealized
Cost gains losses Fair value Cost gains losses Fair value
Available-for-sale:
Debt securities . . . . . . . . . . . . . . . . . .
¥1,938,673 ¥55,922 ¥(2,072) ¥1,992,523 ¥2,090,605 ¥ 58,161 ¥(2,464) ¥2,146,302
Equity securities . . . . . . . . . . . . . . . . .
86,517 63,225 (1,886) 147,856 107,126 49,350 (814) 155,662
Held-to-maturity securities . . . . . . . . . . .
26,439 381 (28) 26,792 27,431 530 (13) 27,948
Total . . . . . . . . . . . . . . . . . . . . . . . . . .
¥2,051,629 ¥119,528 ¥(3,986) ¥2,167,171 ¥2,225,162 ¥108,041 ¥(3,291) ¥2,329,912
Dollars in millions
March 31, 2005
Gross Gross
unrealized unrealized
Cost gains losses Fair value
Available-for-sale:
Debt securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$19,538 $ 544 $(23) $20,059
Equity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
1,002 461 (8) 1,455
Held-to-maturity securities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
256 5 (0) 261
Total . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .
$20,796 $1,010 $(31) $21,775
In Japan, Sony set up several accounts receivable sales
programs whereby Sony can sell up to ¥47,500 million ($444
million) of eligible trade accounts receivable. Through these
programs, Sony can sell receivables to special purpose entities
owned and operated by banks. Sony can sell receivables in
which the agreed upon original due dates are no more than 190
days after the sales of receivables. These transactions are
accounted for as sales in accordance with FAS No. 140, because
Sony has relinquished control of the receivables. The initial sale of
these receivables was in March 2005 in which Sony sold a total of
¥10,041 million ($94 million). Losses from these transactions were
insignificant. Although Sony continues servicing the sold receiv-
ables, no servicing liabilities are recorded because costs for
collection of the sold receivables are insignificant.
At March 31, 2005, debt securities classified as available-for-
sale securities and held-to-maturity securities mainly consist of
Japanese government and municipal bonds and corporate debt
securities with maturities of one to ten years.
Proceeds from sales of available-for-sale securities were
¥215,554 million, ¥397,817 million and ¥613,035 million ($5,729
million) for the years ended March 31, 2003, 2004 and 2005,
respectively. On those sales, gross realized gains computed on
the average cost basis were ¥3,570 million, ¥9,525 million and
¥24,080 million ($225 million) and gross realized losses were
¥3,125 million, ¥1,906 million and ¥5,940 million ($56 million),
respectively.
Marketable securities classified as trading securities at March 31,
2004 and 2005 were ¥131,044 million and ¥315,946 million
($2,953 million), respectively, which consist of debt and equity
securities including short-term investments in money market funds.
In the ordinary course of business, Sony maintains long-term
investment securities, included in securities investments and
other, issued by a number of non-public companies. The aggre-
gate carrying amounts of the investments in non-public compa-
nies at March 31, 2004 and 2005, were ¥51,367 million and
¥48,877 million ($457 million), respectively. A non-public equity
investment is valued at cost as fair value is not readily determin-
able. If the value is estimated to have declined and such decline
is judged to be other than temporary, the impairment of the
investment is recognized and the carrying value is reduced to its
fair value.
Securities investments and other as of March 31, 2004 also
included separate account assets (Note 11) in the life insurance
business, which were carried at fair value and excluded from the
above table as gains or losses accrue directly to policyholders.
As a result of the adoption of SOP 03-1, the separate account
assets, which are defined by insurance business law in Japan and
were previously included in “Securities investments and other” on
the consolidated balance sheet, were excluded from the category
of separate accounts under the provision of SOP 03-1. Accord-
ingly, the assets previously treated as separate account assets are
now treated within general account assets. On April 1, 2004,
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