Square Enix 2008 Annual Report Download - page 19

Content Production Account
Millions of yen
March 31 2007 2008 Change
¥11,903 ¥14,793 ¥2,890
As a rule, content development costs incurred during the period
from a title’s formal development authorization through to its
release are capitalized in the content production account. When the
title is released, this amount is then recorded as an expense.
The content production account is reevaluated based on the
current business environment. In the event that a title development
project is canceled as a result of such reevaluation, the Company
may write-off capitalized development costs for the canceled title in
the content production account as an extraordinary loss. Costs
incurred during the pre-production phase—the phase before devel-
opment is formally approved—are posted as selling, general and
administrative (SG&A) expenses as they are incurred.
As of March 31, 2008, the content production account totaled
¥14,793 million, an increase of ¥2,890 million compared with the
end of the prior fiscal year.
Deferred Tax Assets
Millions of yen
March 31 2007 2008 Change
Current ¥5,634 ¥4,158 ¥(1,476)
Non-current 4,939 852 (4,087)
In September 2005, the Company acquired 93.7% of the common
shares of TAITO CORPORATION via a takeover bid. Subsequently,
TAITO CORPORATION was merged with SQEX, Inc., a wholly-owned
subsidiary of the Company, resulting in TAITO CORPORATION
becoming part of a wholly-owned subsidiary of the Company.
The temporary tax differences associated with the takeover of
TAITO CORPORATION were recognized as a tax effect that the
Company is expected to recover in the future, and the expected
amount to be recovered was recorded as a deferred tax asset.
Current deferred tax assets as of March 31, 2008, amounted to
¥4,158 million, a decrease of ¥1,476 million, and non-current tax
assets totaled ¥852 million, a decrease of ¥4,087 million.
Property and Equipment
Millions of yen
March 31 2007 2008 Change
¥25,664 ¥19,939 ¥(5,725)
Net property and equipment decreased ¥5,725 million to ¥19,939
million, primarily owing to a decrease in amusement equipment from
¥10,798 million to ¥5,906 million. This was mainly due to a changeover
to leasing contracts when introducing new amusement equipment.
3. Analysis of Business Performance in Fiscal 2007
(Ended March 31, 2008)
Assets
Total Assets
Millions of yen
March 31 2007 2008 Change
¥215,679 ¥212,134 ¥(3,544)
Total assets as of March 31, 2008 amounted to ¥212,134 million, a
decrease of ¥3,544 million compared with the previous fiscal year
end. The main factors contributing to this change were as follows:
Cash and Deposits
Millions of yen
March 31 2007 2008 Change
¥99,852 ¥111,515 ¥11,663
Cash flows in fiscal 2007, as well as the principal factors behind
these cash flows, are described below.
(1) Net cash provided by operating activities
Net cash provided by operating activities amounted to ¥23,655 million.
In addition to income before income taxes and minority interests of
¥16,681 million, there was a decrease in allowance for doubtful
accounts, a decrease in accounts receivable and a decrease in
accounts payable.
(2) Net cash used in investing activities
Net cash used in investing activities totaled ¥5,805 million. The
main item within this was payments for acquiring property and
equipment of ¥6,597 million.
(3) Net cash used in financing activities
Net cash used in financing activities amounted to ¥3,404 million.
The largest item within this was payments for dividends of
¥3,882 million.
Notes and Accounts Receivable
Millions of yen
March 31 2007 2008 Change
¥21,206 ¥17,738 ¥(3,468)
The year end balance of notes and accounts receivable varies
greatly depending on the timing of new game title releases. Notes
and accounts receivable at year end were ¥17,738 million, a
decrease of ¥3,468 million compared with the previous year end.
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