In May 1993, the FASB issued SFAS No. 115, "Accounting for Certain Investments in Debt and Equity Securities," which addresses the accounting and reporting for investments in equity securities that have readily determinable fair values and for all investments in debt securities. Under SFAS No. 115, certain investments in debt and equity securities are classified in the following three categories: held-to-maturity, trading or available-for-sale securities. Debt and equity securities classified as available-for-sale securities are reported at fair value, with unrealized gains and losses reported in a separate component of shareholders' equity, net of taxes. In the case of the company, SFAS No. 115 would have been effective from the fiscal year beginning April 1, 1994. At the request of the company and other Japanese companies which file their consolidated financial statements prepared in accordance with accounting principles generally accepted in the United States of America with the United States Securities and Exchange Commission (the "SEC") and the Japanese Ministry of Finance, in August 1993 the SEC issued a confirmation letter to them that the SEC would accept filings by the company and other Japanese companies that do not adopt the provisions of SFAS No. 115 in their primary financial statements, but provide the information required by the provisions of SFAS No. 115 in a note to the financial statements.
The effects on the consolidated balance sheet accounts at March 31, 1995 and 1996 of the departure from the provisions of SFAS No. 115 are summarized as follows:
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In thousands of
In millions of yen U.S. dollars
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March 31 1995 1996 1996
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Shareholders' equity as reported............................... Y790,749 Y 878,852 $8,213,570
Net increase in carrying amount of:
Marketable securities ---Current........................... 78,135 116,356 1,087,439
---Noncurrent........................ 165,834 237,407 2,218,757
Net decrease in deferred tax assets and
increase in deferred tax liabilities:
Deferred tax assets ---Current........................... 8,416 7,630 71,309
---Noncurrent........................ 4,542 439 4,103
Deferred tax liabilities---Current........................... (48,265) (67,058) (626,710)
---Noncurrent........................ (90,694) (123,862) (1,157,589)
Net increase in investments and advances ---
affiliated companies and other................................ 10,844 16,930 158,224
Net increase in minority interest.............................. (325) (200) (1,869)
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Shareholders' equity in accordance with accounting principles
generally accepted in the United States of America............ Y919,236 Y1,066,494 $9,967,234
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The following is a summary of marketable securities by major security type:
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In millions of yen In millions of yen
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1995 1996
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Gross Gross Gross Gross
unrealized unrealized unrealized unrealized
Carrying holding holding Carrying holding holding
March 31 amount gains losses Fair value amount gains losses Fair value
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Current
Available-for-sale:
Equity securities...... Y 88,045 Y 94,625 Y16,502 Y166,168 Y 88,885 Y131,327 Y15,130 Y205,082
Debt securities........ 6,755 12 --- 6,767 8,761 159 --- 8,920
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Y 94,800 Y 94,637 Y16,502 Y172,935 Y 97,646 Y131,486 Y15,130 Y214,002
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Noncurrent
Available-for-sale:
Equity securities...... Y 94,934 Y170,120 Y 6,910 Y258,144 Y100,482 Y232,897 Y 296 Y333,083
Debt securities........ 23,757 2,624 --- 26,381 28,810 4,806 --- 33,616
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Y118,691 Y172,744 Y 6,910 Y284,525 Y129,292 Y237,703 Y 296 Y366,699
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In thousands of U.S. dollars
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1996
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Gross Gross
unrealized unrealized
Carrying holding holding
March 31 amount gains losses Fair value
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Current
Available-for-sale:
Equity securities.................................................$ 830,701 $1,227,355 $141,402 $1,916,654
Debt securities................................................... 81,878 1,486 --- 83,364
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$ 912,579 $1,228,841 $141,402 $2,000,018
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Noncurrent
Available-for-sale:
Equity securities.................................................$ 939,084 $2,176,607 $ 2,766 $3,112,925
Debt securities................................................... 269,252 44,916 --- 314,168
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$1,208,336 $2,221,523 $ 2,766 $3,427,093
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The net unrealized holding gains, net of taxes, on available-for-sale securities decreased by 45,419 million yen for the year ended March 31, 1995 and increased by 59,155 million yen ($552,850 thousand) for the year ended March 31, 1996.
Contractual maturities of debt securities for available-for-sale securities at March 31, 1996 are due in the period from April 1, 1996 to November 16, 2016.
Proceeds from sales of available-for-sale securities were 96,021 million yen and 11,506 million yen ($107,533 thousand) for the years ended March 31, 1995 and 1996, respectively. Gross realized gains on those sales were 24,018 million yen and 2,380 million yen ($22,243 thousand) for the years ended March 31, 1995 and 1996, respectively, and gross realized losses were 372 million yen and 469 million yen ($4,383 thousand) for the years ended March 31, 1995 and 1996, respectively. For the year ended March 31, 1994, net realized gains on the disposal of marketable equity securities were 25,179 million yen.
