rities when the market value or the net worth falls signifi- cantly and is proved to be unrecoverable. If a significant decline in market value occurs and is proved to be unrecov- erable in the future, additional impairment losses may need to be recognized. In fiscal 2001 and 2002, the Group posted large losses as a result of a deterioration in operating performance and related business restructuring charges. With respect to the timing difference on tax loss carryforwards and others, an estimate has been made of the amount of the deferred tax assets with- in the extent of which the Group judges to be recoverable over the next five years. By recording a valuation allowance for the amount exceeding the projected recoverable amount, an appropriate level of deferred tax assets is recorded. Future increases or decreases in the valuation allowance may be made if projected taxable income decreases or increases as a result of trends in future results. The deferred tax asset is recognized based on the statutory tax rate. Future revisions in the tax rate would result in increases or decreas- es of the deferred tax asset. Deferred Tax Assets Property, Plant and Equipment work performed by outside contractors. Based on this premise, in fiscal 2003 we undertook a stringent assessment of the potential revenue recoverable on those projects for which estimated costs had exceeded estimated revenue, and we recognized as losses the amounts assessed as non-recov- erable. If the estimated costs relating to those contracts increase further in the future, additional losses may be rec- ognized.  Property, plant and equipment are carried at cost. Depreciation is computed principally by the declining-bal- ance method at rates based on the estimated useful lives of the respective assets, which vary according to their general classification, type of construction and function. In the future, some equipment and facilities may become obsolete as a result of technical innovation or other factors, and some equipment and facilities may no longer be required as the result of withdrawal from certain businesses, in which case their actual useful lives may become less than their original- ly estimated useful lives. Losses may occur as a result. We are not adopting in advance the impairment account- ing standard that will become mandatory in fiscal 2005 in Japan. Accordingly, at the time that standard is applied, losses may have to be recognized in cases in which there is a decline in the anticipated amount of future cash flows and a corresponding decline in the amounts judged to be recover- able as a result of deterioration in the projected results of a business unit. Retirement benefit costs and obligations are determined based on certain actuarial assumptions. These assumptions include the discount rate, rates of retirement, death rates, and the expected rate of return on the plan assets. The discount rate for the company and its domestic subsidiaries is esti- mated based on the market rate of return in Japan for long-term corporate bonds of a certain rating. The expected rate of return is estimated based on the weighted average of the expected rates of return for each type of asset in which the pension funds are invested. When actual results differ from the assumptions or when the assumptions are changed, retirement benefit costs and obligations can be affected. In the event an actuarial loss arises, the actuarial loss is amor- tized using a straight-line method over employees’ average remaining service period.  Overseas subsidiaries recognize retirement benefit costs and obligations in conformity with the accounting principles and standards generally accepted in their respective coun- tries. Any future revisions to these accounting standards could impact the retirement benefit costs and obligations recognized by these subsidiaries. Certain computers manufactured by the Group are sold to Japan Electronic Computer Co., Ltd. (JECC) and other leas- ing companies for leasing to the ultimate users under contracts that require the repurchase of the computers if they are returned by the users after a certain period. Based on past experience, an estimated amount for the loss arising from such repurchases is provided at the point of sale and is recorded as a provision. If there are future changes in the usage trends of the ultimate users, there may need to be additions or reductions to the provision.  Provision for Loss on Repurchase of Computers Marketable Securities Intangible Assets Goodwill Held-to-maturity investments, which are the debt securities which the Group has the positive intent and ability to hold to maturity, are stated at amortized cost, adjusted for the amor- tization of premium or discount to maturity. Available-for sale securities, which are “equity securities” or “debt securi- ties not classified as held-to-maturity,” are carried at fair market value as of the balance sheet date of the fiscal year if a market price is available. If no market price is available, they are carried at cost based on the moving average method. Fluctuations in the market value of available-for- sale securities for which market prices are available cause fluctuations in the carrying value of marketable securities, resulting in increases or decreases in shareholders’ equity. Impairment losses are recognized on available-for-sale secu- Goodwill arising from the acquisition of a business is amor- tized by the straight-line method over the period corresponding to the premium of the acquired business. Losses may be recognized when the business is withdrawn or sold by the Group, or when the profitability of the acquired business decreases during the period the Group expected the return. Computer software for internal use is amortized by the straight-line method over its estimated useful life. Losses may occur if the actual useful life falls short of the initially estimated useful life. Computer software for sale is amortized based on projected unit sales volume during the period for which the projec- tions are made. The projected unit sales volume is estimated based on a feasible sales plan, but losses may occur if antici- pated unit sales fall short of the original sales plan.  33 Retirement Benefits 