Sony 2006 Annual Report Download - page 80

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78
fiscal years beginning after the date this statement is issued
encouraged. The adoption of FAS No. 151 is not expected to
have a material impact on Sony’s results of operations and
financial position.
■DERIVATIVE INSTRUMENTS AND HEDGING ACTIVITIES
In February 2006, the FASB issued FAS No. 155, “Accounting
for Certain Hybrid Financial Instruments,” an amendment of FAS
No. 133 and FAS No. 140. This statement permits an entity to
elect fair value remeasurement for any hybrid financial instru-
ment (with changes in fair value recognized in earnings) if the
hybrid instrument contains an embedded derivative that would
otherwise be required to be bifurcated and accounted for
separately under FAS No. 133. The election to measure the
hybrid instrument at fair value is made on an instrument-by-
instrument basis and is irreversible. The statement will be
effective for all financial instruments acquired, issued, or subject
to a remeasurement event occurring after the beginning of an
entity’s fiscal years beginning after September 15, 2006, with
earlier adoption permitted as of the beginning of fiscal year,
provided that financial statements for any interim period of that
fiscal year have not been issued. The adoption of FAS No. 155
is not expected to have a material impact on Sony’s results of
operations and financial position.
■ACCOUNTING FOR SERVICING OF FINANCIAL ASSETS
In March 2006, the FASB issued FAS No. 156, “Accounting for
Servicing of Financial Assets—an amendment of FASB Statement
No. 140.” This statement amends FASB Statement No. 140,
“Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities” with respect to the accounting for
separately recognized servicing assets and servicing liabilities.
This statement shall be effective for fiscal years beginning after
September 15, 2006. Sony is currently evaluating the impact of
adopting this new pronouncement.
■ACCOUNTING FOR UNCERTAINTY IN INCOME TAXES
In June 2006, the FASB issued FIN No. 48, “Accounting for
Uncertainty in Income Taxes, an interpretation of FASB Statement
No. 109”. FIN No. 48 clarifies the accounting for uncertainty in
income taxes recognized in an enterprise’s financial statements
in accordance with FAS No. 109, “Accounting for Income
Taxes”. FIN No. 48 prescribes a recognition threshold and
measurement attribute for the financial statement recognition
and measurement of a tax position taken or expected to be
taken in a tax return. FIN No. 48 also provides guidance on
derecognition, classification, interest and penalties, accounting
in interim periods, disclosure, and transition. FIN No. 48 is
effective for fiscal years beginning after December 15, 2006.
Early application of the provisions of this Interpretation is
encouraged if financial statements have not been issued, including
interim financial statements, in the period this Interpretation is
adopted. Sony is currently evaluating the impact of adopting
this Interpretation.