Canon 2002 Annual Report Download - page 59

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57
(8) Goodwill and Other Intangible Assets
The components of acquired intangible assets excluding
goodwill at December 31, 2002 and January 1, 2002 were as
follows:
As of December 31, 2002 As of January 1, 2002
Gross Carrying Accumulated Gross Carrying Accumulated
(Millions of yen) Amount Amortization Amount Amortization
Intangible assets subject to amortization:
Software ¥106,664 74,971 ¥94,505 67,097
Other 3,233 1,106 3,341 1,088
Total ¥109,897 76,077 ¥97,846 68,185
As of December 31, 2002
Gross Carrying Accumulated
(Thousands of U.S. dollars) Amount Amortization
Intangible assets subject to amortization:
Software $ 888,867 624,758
Other 26,941 9,217
Total $ 915,808 633,975
Intangible assets not subject to amortization at December
31, 2002 and January 1, 2002 were insignificant.
Aggregate amortization expense for the year ended
December 31, 2002 is ¥6,288 million ($52,400 thousand).
Estimated amortization expense for the next five years ending
December 31 is: ¥9,807 million ($81,725 thousand) in 2003,
¥9,219 million ($76,825 thousand) in 2004, ¥6,131 million
($51,092 thousand) in 2005, ¥3,233 million ($26,942
thousand) in 2006, and ¥1,669 million ($13,908 thousand) in
2007.
The changes in the carrying amount of goodwill for the year
ended December 31, 2002 were as follows:
Thousands of
Millions of yen U.S. dollars
2002 2002
Balance at beginning of year ¥13,375 ¥111,458
Goodwill acquired during the year 806 6,717
Impairment losses (503) (4,192)
Translation adjustment (38) (316)
Balance at end of year ¥13,640 ¥113,667
Due to a continuing negative trend in the business systems
industries and semiconductor related market, operating profit
and cash flows were lower than expected. In the year ended
December 31, 2002, under the continuing negative trend, the
majority of goodwill impairment loss of ¥503 million ($4,192
thousand) was recognized from the business system and optical
and other products reporting units since the carrying amounts of
the reporting units were greater than the fair value of the
reporting units (as determined using the expected present value
of future cash flows) and the carrying amounts of the reporting
units goodwill exceeded the implied fair value of that goodwill.