Sony 2015 Annual Report Download - page 165

SONY CORPORATION AND CONSOLIDATED SUBSIDIARIES
6. Transfer of financial assets
Sony has established several accounts receivable sales programs mainly within the Electronics business.
Through these programs, Sony can sell receivables to a commercial bank or a special purpose entity associated
with a sponsor bank. Total receivables sold during the fiscal years ended March 31, 2014, 2015 and 2016 were
763,947 million yen, 633,190 million yen and 53,267 million yen, respectively. These transactions are accounted
for as sales in accordance with the accounting guidance for transfers of financial assets, because Sony has
relinquished control of the receivables. Gains and losses from these transactions, other than as described below,
were insignificant, and although Sony continues servicing the receivables subsequent to being sold or
contributed, no servicing liabilities are recorded as the costs of collection of the sold receivables are
insignificant. Other than the cash proceeds from the sales below, net cash flows related to these transactions,
including servicing fees, for the fiscal years ended March 31, 2014, 2015 and 2016 were insignificant.
Certain programs require that a portion of the sales proceeds be held back and deferred until collection of
the related receivables by the purchaser. The portion of the sales proceeds held back and deferred are initially
recorded at estimated fair value using a discounted cash flow model and are included in other current assets and
other long-term assets. The significant assumptions used in valuing the deferred proceeds are the discount rate,
the timing and amount of the cash flows. Sony includes collections on deferred proceeds as cash flows within
operating activities in the consolidated statements of cash flows when the receivables are the result of operating
activities and the associated interest rate risk is insignificant due to their short-term nature. When the interest rate
risk associated with the deferred proceeds is greater than insignificant or the receivables are long-term in nature,
as is the case for the program in the Pictures segment, Sony includes collections on deferred proceeds as cash
flows within investing activities in the consolidated statements of cash flows.
In August 2014, Sony terminated an accounts receivable sales program within the Electronics business in
the United States. The program required that a portion of the sales proceeds be held back and deferred until
collection of the related receivables by the purchaser. As of March 31, 2014, deferred proceeds totaled
6,405 million yen. Total trade receivables sold, deferred proceeds from those sales and collections of deferred
proceeds during the fiscal years ended March 31, 2014, 2015 and 2016 were as follows:
Yen in millions
Fiscal year ended March 31
2014 2015 2016
Total trade receivables sold 247,863 50,400 —
Deferred proceeds 36,678 16,150 —
Collections of deferred proceeds 35,196 22,512 —
During the fiscal year ended March 31, 2014, Sony established an accounts receivable sales program within
the Pictures segment in the United States. Sony recognized a gain within other income from sales of accounts
receivable under this program for the fiscal year ended March 31, 2014 of 1,394 million yen. The program
requires that a portion of the sales proceeds be held back and deferred until collection of the related receivables
by the purchaser, and the deferred proceeds totaled 22,188 million yen, 30,893 million yen and 30,291 million
yen as of March 31, 2014, 2015 and 2016, respectively. Total trade receivables sold, deferred proceeds from
those sales and collections of deferred proceeds during the fiscal years ended March 31, 2014, 2015 and 2016
were as follows:
Yen in millions
Fiscal year ended March 31
2014 2015 2016
Total trade receivables sold 53,720 4,237 2,918
Deferred proceeds 22,188 4,237 2,918
Collections of deferred proceeds — — 2,298
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