Sony Corporation, the Japanese electronics manufacturer, prepares U.S. GAAP-based financial statements (in million yen). On its fiscal

Question:

Sony Corporation, the Japanese electronics manufacturer, prepares U.S. GAAP-based financial statements (in million yen). On its fiscal 2014 balance sheet, it reported investments in affiliate companies of 171,063 and 181,263 for 2014 and 2013, respectively. It also reported income from equity investees of 3,921 on the 2014 income statement, and 2,269 appeared in the operating section of the 2014 statement of cash flows.

REQUIRED:
a. Describe the factors that may have explained the decrease in the balance sheet value of investments in affiliate companies from 2013 to 2014.
b. Why does +2,269 appear in the operating section of the 2014 statement of cash flows?
c. How would income from these investments be computed if Sony chose to exercise the option to account for these equity investments using the fair market value option? What additional information would be needed, and what additional disclosures would be required?

Financial Statements
Financial statements are the standardized formats to present the financial information related to a business or an organization for its users. Financial statements contain the historical information as well as current period’s financial... Balance Sheet
Balance sheet is a statement of the financial position of a business that list all the assets, liabilities, and owner’s equity and shareholder’s equity at a particular point of time. A balance sheet is also called as a “statement of financial...

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