Sony 2015 Annual Report Download - page 88

based on the actual results to date and estimated future results for each film. For example, a film that has resulted
in lower than expected theatrical revenues in its initial weeks of release would generally have its theatrical, home
entertainment and television distribution ultimate revenues adjusted downward; a failure to do so would result in
the understatement of amortized film costs for the period.
Future insurance policy benefits
Liabilities for future insurance 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 percent to 4.5 percent 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.
Policyholders’ account in the life insurance business
Policyholders’ account in the life insurance business represents an accumulation of account deposits plus
credited interest less withdrawals, expenses and mortality charges. Policyholders’ account includes universal life
insurance and investment contracts. Universal life insurance includes interest sensitive whole life contracts and
variable contracts. The credited rates associated with interest sensitive whole life contracts range from
1.9 percent to 2.0 percent. For variable contracts, policy values are expressed in terms of investment units. Each
unit is linked to an asset portfolio. The value of a unit increases or decreases based on the value of the linked
asset portfolio. Investment contracts mainly include single payment endowment contracts, single payment
juvenile contracts and policies after the start of annuity payments. The credited rates associated with investment
contracts range from 0.1 percent to 6.3 percent.
Recently Adopted Accounting Standards
Refer to Note 2, summary of significant accounting policies, recently adopted accounting pronouncements,
of the consolidated financial statements.
Recent Accounting Pronouncements
Refer to Note 2, summary of significant accounting policies, recent accounting pronouncements not yet
adopted, of the consolidated financial statements.
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