Sony 2015 Annual Report Download - page 173

SONY CORPORATION AND CONSOLIDATED SUBSIDIARIES
In conjunction with Sony’s review for goodwill impairment, Sony also assessed whether the carrying
amount of any of the tangible or definite-lived intangible assets of the MC segment was recoverable. As a result
of the assessment, Sony determined that there were no tangible or definite-lived intangible assets within the MC
segment that were impaired.
10. Insurance-related accounts
Sony’s Financial Services segment subsidiaries in Japan maintain their accounting records as described in
Note 2 in accordance with the accounting principles and practices generally accepted in Japan, which vary in
some respects from U.S. GAAP.
Those differences are mainly that insurance acquisition costs for life and non-life insurance contracts are
charged to income when incurred in Japan whereas in the U.S. those costs are deferred and amortized generally
over the premium-paying period of the related insurance policies, and that future policy benefits for life
insurance contracts calculated locally under the authorization of the supervisory administrative agencies are
comprehensively adjusted to a net level premium method with certain adjustments of actuarial assumptions for
U.S. GAAP purposes. For the purpose of preparing the consolidated financial statements, appropriate
adjustments have been made to reflect the accounting for these items in accordance with U.S. GAAP.
The combined amounts of statutory net equity of the insurance subsidiaries, which is not measured in
accordance with U.S. GAAP, as of March 31, 2015 and 2016 were 457,268 million yen and 510,501 million yen,
respectively.
(1) Insurance policies
Life insurance policies that a subsidiary in the Financial Services segment underwrites, most of which are
categorized as long-duration contracts, mainly consist of whole life, term life and accident and health insurance
contracts. The life insurance revenues for the fiscal years ended March 31, 2014, 2015 and 2016 were
670,506 million yen, 693,132 million yen and 803,549 million yen, respectively. Property and casualty insurance
policies that a subsidiary in the Financial Services segment underwrites are primarily automotive insurance
contracts, which are categorized as short-duration contracts. The non-life insurance revenues for the fiscal years
ended March 31, 2014, 2015 and 2016 were 86,780 million yen, 90,431 million yen and 93,928 million yen,
respectively.
(2) Deferred insurance acquisition costs
Amortization of deferred insurance acquisition costs charged to income for the fiscal years ended March 31,
2014, 2015 and 2016 amounted to 45,236 million yen, 56,530 million yen and 92,203 million yen, respectively.
(3) Future insurance policy benefits
Liabilities for future policy benefits, which mainly relate to individual life insurance policies, are established
in amounts adequate to meet the estimated future obligations of policies in force. These liabilities, which require
significant management judgment and estimates, are computed by the net level premium method based upon the
assumptions as to future investment yield, morbidity, mortality, withdrawals and other factors. Future policy
benefits are computed using interest rates ranging from 1.0% to 4.5% and are based on factors such as market
conditions and expected investment returns. Morbidity, mortality and withdrawal assumptions for all policies are
based on either the subsidiary’s own experience or various actuarial tables. Generally these assumptions are
locked-in throughout the life of the contract upon the issuance of new insurance, although significant changes in
experience or assumptions may require Sony to provide for expected future losses. At March 31, 2015 and 2016,
future insurance policy benefits amounted to 4,111,894 million yen and 4,497,951 million yen, respectively.
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