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 for 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 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, 1996 and 1997 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 1996 1997 1997
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Shareholders' equity as reported ............................. Y 878,852 Y1,003,371 $8,091,702
Net increase in carrying amount of:
Marketable and investment securities ---Current .......... 116,356 66,997 540,299
---Noncurrent ....... 237,407 131,802 1,062,919
Net decrease in deferred tax assets and
increase in deferred tax liabilities:
Deferred tax assets ---Current ......................... 7,630 9,655 77,863
---Noncurrent ...................... 439 330 2,661
Deferred tax liabilities---Current ......................... (67,058) (43,998) (354,823)
---Noncurrent ...................... (123,862) (70,079) (565,153)
Net increase in investments and advances ---
affiliated companies and other .............................. 16,930 8,411 67,831
Net increase in minority interest ............................ (200) (773) (6,234)
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Shareholders' equity in accordance with accounting principles
generally accepted in the United States of America Y1,066,494 Y1,105,716 $8,917,065
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The following is a summary of marketable and investment securities by major security type:
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In millions of yen In millions of yen
-------------------------------------------- -------------------------------------------
1996 1997
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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 88,885 Y131,327 Y15,130 Y205,082 Y 89,512 Y 86,042 Y19,273 Y156,281
Debt securities ........ 8,761 159 --- 8,920 19,431 228 --- 19,659
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Y 97,646 Y131,486 Y15,130 Y214,002 Y108,943 Y 86,270 Y19,273 Y175,940
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Noncurrent
Available-for-sale:
Equity securities ...... Y100,482 Y232,897 Y 296 Y333,083 Y138,212 Y128,138 Y 941 Y265,409
Debt securities ........ 28,810 4,806 --- 33,616 92,180 4,605 --- 96,785
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Y129,292 Y237,703 Y 296 Y366,699 Y230,392 Y132,743 Y 941 Y362,194
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In thousands of U.S. dollars
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1997
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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 .............................................. $ 721,871 $ 693,887 $ 155,427 $1,260,331
Debt securities ................................................ 156,701 1,839 --- 158,540
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$ 878,572 $ 695,726 $ 155,427 $1,418,871
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Noncurrent
Available-for-sale:
Equity securities .............................................. $1,114,613 $1,033,371 $ 7,589 $2,140,395
Debt securities ................................................ 743,387 37,137 --- 780,524
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$1,858,000 $1,070,508 $ 7,589 $2,920,919
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The net unrealized holding gains, net of taxes, on available-for-sale securities increased by Y59,155 million for the year ended March 31, 1996 and decreased by Y85,297 million ($687,879 thousand) for the year ended March 31, 1997.
Contractual maturities of available-for-sale debt securities at March 31, 1997 are in the period from April 1, 1997 to November 15, 2016.
Proceeds from sales of available-for-sale securities were Y96,021 million, Y11,506 million and Y118,259 million ($953,702 thousand) for the years ended March 31, 1995, 1996 and 1997, respectively. Gross realized gains on those sales were Y24,018 million, Y2,380 million and Y52,137 million ($420,460 thousand) for the years ended March 31, 1995, 1996 and 1997, respectively, and gross realized losses were Y372 million, Y469 million and Y194 million ($1,565 thousand) for the years ended March 31, 1995, 1996 and 1997, respectively.
