Square Enix 2007 Annual Report Download - page 37

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*5 Impairment loss
In this fiscal year, the Group posted impairment losses on
the following non-current assets:
Impairment
Location Usage Category amount
Nagareyama-shi, Chiba Idle assets Land ¥ 42
Tokushima-shi, Tokushima Idle assets Land 146
Chiyoda-ku, Tokyo and other Idle assets Telephone sub- 9
scription rights
Republic of Korea (TAITO
KOREA CORPORATION) — Goodwill 260
The United States of America
(UIEVOLUTION, INC.) —Cost of
investments in
subsidiaries in
exess of net
assets acquired 3,926
Other ——41
Total ¥4,426
Cash inflows from business segments of the Group are
complementary to one another in terms of similarities in
nature of products, merchandise, services and markets.
Consequently, all assets for operational purposes are classi-
fied in one asset group, and idle assets which are not used
for operational purposes are classified individually. In addi-
tion, assets related to the Group’s headquarters and wel-
fare facilities are classified as common-use assets.
Since the market values of the idle assets listed above
have declined severely in relation to their book values, and
because it remains uncertain as to whether the Group will
be able to utilize these assets in the future, their book
values have been reduced to the recoverable amounts.
The resulting losses have been posted as an impairment loss
totaling ¥198 million.
Furthermore, the recoverable amounts for these assets
have been determined according to market prices calcu-
lated using real estate appraisals.
An amount of ¥260 million related to the Republic of
Korea (TAITO KOREA CORPORATION) has been posted as
an impairment loss. This is the difference between the
appraised income potential in excess of acquisition cost for
amusement facilities in Korea at the time of acquisition, and
the current level of income assessed as recoverable above
acquisition cost.
Goodwill impairment totaling ¥3,926 million listed for
the United States of America (UIEVOLUTION, INC.) has been
posted as an impairment loss. This amount is the appraised
difference between future cash inflows and the current
book value.
• FY2006 (April 1, 2006 to March 31, 2007)
*1 Selling, general and administrative
expenses include R&D costs of ¥2,374 million.
*2 Breakdown of loss on sale of property and equipment
Tools and fixtures ¥17 million
*3 Breakdown of loss on disposal of property and equipment
Buildings and structures ¥269 million
Tools and fixtures ¥266 million
Amusement equipment ¥484 million
Software ¥56 million
Other ¥7 million
Total ¥1,085 million
*4 Loss on valuation of investment securities was due to the
significant decline in market prices of marketable securities.
*5 Impairment loss
In this fiscal year, the Group posted impairment losses on
the following asset groups:
Millions of yen
Impairment
Location Usage Category amount
Kumagaya-shi, Saitama Idle assets Buildings, land ¥ 91
Chiyoda-ku, Tokyo
and other Idle assets, other Tools and fixtures 169
Chiyoda-ku, Tokyo
and other Idle assets Telephone sub- 21
scription rights
Republic of Korea Goodwill 40
Other 44
Total ¥368
Cash inflows from each business segments of the Group are
complementary to one another in terms of similarities in nature
of products, merchandise, services and markets. Consequently,
all assets for operational purposes are classified in one asset
group, and idle assets which are not used for operational pur-
poses are classified individually. In addition, assets related to
the Group’s headquarters and welfare facilities are classified as
common-use assets.
Of the assets listed above, as a result of the restructuring of
the amusement business, the assets owned by the pachinko
and slot machine department were marked down to their
recoverable values, resulting in an impairment loss of ¥102 mil-
lion, which were recorded as an extraordinary loss.
For e-commerce assets, tools and fixtures were marked
down to their recoverable values, resulting in an impairment
loss of ¥66 million, which was posted as an extraordinary loss.
As the market values of buildings, land and telephone subscrip-
tion rights that were idle were substantially lower than their
market values, and they were not expected to be used in the
future, they were marked down to their recoverable values,
resulting in an impairment loss of ¥112 million, which was
posted as an extraordinary loss.
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