Square Enix 2009 Annual Report Download - page 19

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Content Production Account
Millions of yen
March 31 2008 2009 Change
¥14,793 ¥18,392 ¥3,599
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.
Costs incurred during the pre-production phase—the phase
before development is approved—are posted as selling, general and
administrative (SG&A) expenses as they are incurred. As of March
31, 2009, the content production account totaled ¥18,392 million,
an increase of ¥3,599 million compared with the end of the prior
fiscal year.
As of March 31, 2009, the Company incurred a ¥5,368 million
loss on valuation of inventory primarily due to reevaluation of the
content production account.
Deferred Tax Assets
Millions of yen
March 31 2008 2009 Change
Current ¥4,158 ¥3,882 ¥(276)
Non-current 852 952 100
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. As of March 31,
2009, current deferred tax assets amounted to ¥3,882 million, a
decrease of ¥276 million, and non-current tax assets totaled ¥952
million, an increase of ¥100 million. These changes were attributable
to a decrease in deferred tax assets owing to the elimination of tax
differences associated with the takeover of TAITO CORPORATION and
an increase in temporary tax differences due to a loss on inventory
valuation and other factors.
Property and Equipment
Millions of yen
March 31 2008 2009 Change
¥19,939 ¥19,082 ¥(857)
Net property and equipment decreased by ¥857 million to ¥19,082
million. Although land increased, amusement equipment decreased
from ¥5,906 million to ¥2,590 million.
¥7,527 million compared to the year ended March 31, 2008), lower
depreciation expense (a decrease of ¥2,955 million compared to
the year ended March 31, 2008) and lower accounts receivable (a
decrease of ¥1,371 million compared to the year ended March 31,
2008), while inventories increased by ¥1,907 million and accounts
payable increased by ¥4,589 million compared to the year ended
March 31, 2008.
(2) Net cash used in investing activities
Net cash used in investing activities totaled ¥10,991 million, an
increase of ¥5,186 million compared to the previous fiscal year.
The main item within this was payments for acquiring property and
equipment of ¥9,983 million.
(3) Net cash used in financing activities
Net cash used in financing activities amounted to ¥3,044 million,
an increase of ¥359 million compared with the previous fiscal year.
The largest item within this was payments for dividends of ¥3,443
million.
The Group believes that it will be possible to procure the funds
required for working capital and capital investments in the future
to maintain growth based on its sound financial standing and ability
to generate cash through operating activities.
3. Analysis of Business Performance in the Fiscal Year
Ended March 31, 2009
Assets
Total Assets
Millions of yen
March 31 2008 2009 Change
¥212,134 ¥213,194 ¥1,060
Total assets as of March 31, 2009 amounted to ¥213,194 million,
an increase of ¥1,060 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 2008 2009 Change
¥111,515 ¥111,981 ¥466
Notes and Accounts Receivable
Millions of yen
March 31 2008 2009 Change
¥17,738 ¥15,432 ¥(2,306)
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 ¥15,432 million, a
decrease of 2,306 million compared with the previous year end.
17