4. Consolidated Statements of Cash Flows
Significant Matters Pertaining to the Preparation of Consolidated Financial
The consolidated financial statements of NTT have been prepared in
conformity with accounting principles generally accepted in the United States
of America (Accounting Principles Board Opinions, Statements of Financial Accounting
Application of New Accounting Standard
Accounting for Certain Financial Instruments with Characteristics of Liabilities
Effective April 1, 2004, NTT Group adopted Statement of Financial Accounting
Standards No. 150 ("SFAS 150"), "Accounting for Certain Financial
Instruments with Characteristics of Liabilities and Equity." This statement
changes the accounting for certain financial instruments with characteristics
of both liabilities and equity that, under previous guidance, could be classified
as equity, by now requiring those instruments to be classified as liabilities
(or assets in some circumstances) in the balance sheet. Further, SFAS 150 requires
disclosure regarding the terms of those instruments and settlement alternatives.
The adoption of SFAS 150 did not have an impact on the results of operations
or the financial position of NTT Group.
Details of "Cost of services," "Cost of equipment sold," "Cost
of system integration" and "Selling, general and administrative expenses"
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