Konica Minolta 2015 Annual Report Download - page 108

(1) Impairment losses
For fiscal year ended March 31, 2014, impairment losses were recognized on manufacturing equipment of glass substrates for
HDDs as a result of the resolution to withdraw from this business and on manufacturing equipments of medical-use X-ray films as
no further use was expected due to the cessation of manufacturing.
Manufacturing equipments of glass substrates for HDDs (“machinery and vehicles,” “buildings and structures,” etc.) was
written down to the recoverable amounts of ¥3,852 million for these assets, and impairment losses of ¥11,910 million were
recognized for the Industrial Business segment. The recoverable amounts were calculated using a valuation technique (market
approach) which included unobservable inputs. They are therefore classified within level 3 of fair value hierarchy.
As manufacturing equipments for medical-use X-ray films (“buildings and structures”) are specialty assets that cannot be easily
converted or sold, the recoverable amounts of these assets were estimated at zero, and impairment losses of ¥3,516 million were
recorded. These impairment losses were generated on assets not attributed to reportable segments.
For fiscal year ended March 31, 2015, impairment losses were recognized on goodwill at sales sites in Europe due to ongoing
losses stemming from worsening of market environment, on manufacturing equipments of optical products and film manufacturing
equipments located in Japan in the Industrial Business segment due to reduced utilization rates, and on company-wide idle assets,
etc., due to reduced utilization rates and review of asset values.
With regard to sales sites in Europe, the recoverable amount of goodwill and intangible assets associated with the acquisition
of sales subsidiaries was estimated at zero, and impairment losses of ¥2,733 million were recognized in the Business Technologies
business.
With regard to manufacturing equipments of optical products (“machinery and vehicles” and “tools and equipment,” etc.), the
recoverable amounts of these assets was written down to ¥188 million, and impairment losses of ¥473 million were recognized for
the Industrial Business segment. The recoverable amounts is the fair value less costs of disposal, calculated using the valuation
technique (market approach) which included unobservable inputs.It is therefore classified within level 3 of fair value hierarchy.
With regard to film manufacturing equipment located in Japan (“machinery and vehicles” and “tools and equipment”), as these
are specialty assets that cannot be easily converted or sold, the recoverable amounts of these assets was estimated at zero, and
impairment losses of ¥553 million were recorded in the Industrial Business segment.
With regard to idle assets, etc. (“buildings and structures,” “machinery and vehicles” and “land,” etc.), the recoverable amount
for land was written down to ¥50 million, the recoverable amount of assets other than land was estimated at zero, and company-
wide impairment losses of ¥957 million were recognized. The recoverable amount of land is fair value less costs of disposal,
calculated using the valuation technique (market approach) which included unobservable inputs. It is therefore classified within level
3 of fair value hierarchy. These impairment losses were generated on assets not attributable to reportable segments.
(2) Goodwill impairment tests
Goodwill of ¥46,208 million was generated during management integration with Minolta Co., Ltd. At the Transition Date and for each
fiscal year, ¥41,613 million is allocated to Business Technologies and ¥4,595 million to the Industrial Business segment. No
impairment losses were recognized at the Transition Date or in any fiscal year. Calculation of the recoverable amount for each
cash-generating unit is based on value in use. Value in use is calculated as future cash flows discounted to the present value, based
on the most recent business plans approved by the Board of Directors. Estimated future cash flows for periods subsequent to
approved business plans are calculated by using a fixed growth rate based on the long-term average rate of growth for markets to
which the cash-generating unit belongs. The pre-tax discount rate used during the fiscal year under review was 7.52% (previous
fiscal year: 7.89%, Transition Date: 7.62%). In the event of changes in principal assumptions used in the impairment tests within the
scope of rational forecasting possibility, management judges that the likelihood that significant impairment losses will be generated
for these cash-generating units is low.
Millions of yen
Thousands of
U.S. dollars
2015 2014 2015
Property, plant and equipment ············································································································································ ¥2,444 ¥17,401 $20,338
Goodwill ······················································································································································································································ 2,551 - 21,228
Intangible assets ·························································································································································································· 188 85 1,564
Total ··································································································································································································································· ¥5,185 ¥17,487 $43,147
The Group recognizes impairment losses when the recoverable amount of assets falls below their carrying amount. Impairment
losses are included in other expenses in the consolidated statements of profit or loss.
Impairment losses on property, plant and equipment and goodwill and intangible assets are as follows:
13. Impairment losses on non-financial assets
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KONICA MINOLTA, INC. Annual Report 2015
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