Square Enix 2011 Annual Report Download - page 44

In principle, the recoverable amounts for these assets are
determined based on their fair value calculated using market prices.
*8 Accelerated amortization of goodwill
Accelerated amortization of goodwill is the amount of goodwill
amortized in this fiscal year ended March 31, 2010 relating
to TAITO CORPORATION. A change in business circumstances
caused a revision in the estimate of the goodwill’s useful life and
recoverable value.
*9 Loss associated with business restructuring
This item principally comprises business restructuring losses
relating to an overhaul of the Group’s game development and sales
structures in Europe and the United States due to the acquisition of
the Eidos Group.
*10 Income taxes for prior periods
With regard to transactions between the Company and its
subsidiaries in the United States and the United Kingdom, although
the Company had been preparing to file mutual agreement based
on the bilateral advance pricing agreement (BAPA) system relating
to transfer pricing taxation, during this fiscal year, a mutual
agreement became effective between the governments of Japan
and the United States. Japan and the United Kingdom plan to reach
a mutual agreement in the near future. The amount presented as
income taxes for prior periods is the net amount after offsetting
taxes paid and estimated taxes payable against tax refunds under
the aforementioned mutual agreements.
■ Year ended March 31, 2011
*1 Inventories at fiscal year-end are stated after writing down based
on its decrease in profitability. The following amount is included
within cost of sales as loss on valuation of inventories. ¥2,095
million
*2 Selling, general and administrative expenses include
research and development expenses of ¥710 million
*3 Breakdown of gain on sale of property and equipment
Tools and fixtures ¥ 0 million
Amusement equipment 1 million
Total ¥ 1 million
*4 Breakdown of loss on sale of property and equipment
Tools and fixtures ¥ 1 million
Total ¥ 1 million
*5 Breakdown of loss on disposal of property and equipment
Buildings and structures ¥ 49 million
Tools and fixtures 297 million
Amusement equipment 257 million
Software 6 million
Other 10 million
Total ¥621 million
*6 Loss on evaluation of investment securities
Same as the year ended March 31, 2010
*7 Impairment loss
In the fiscal year ended March 31, 2011, the Group posted
impairment loss on the following groups of assets.
Millions of yen
Location Usage Category Impairment
amount
Shinjuku-ku,
Tokyo
Assets planned for disposal
related to home-use online
karaoke business
(discontinued business)
Telephone
subscription
rights
¥10
Amusement
equipment 1
Tools and
fixtures 1
Ebina,
Kanagawa
Prefecture
Amusement equipment
production and sale
Buildings 0
Tools and
fixtures 45
Software 4
Long-term
prepaid
expenses
0
Leased tools and
fixtures 13
Finance
leases that do
not transfer
ownership
of rental
transactions
13
Shibuya-ku,
Tokyo Idle assets
Telephone
subscription
rights
2
Shibuya-ku,
Tokyo Assets planned for disposal Amusement equipment 94
Shibuya-ku,
Tokyo Other Goodwill 3,574
United
Kingdom Other
Goodwill 4,841
Intangible assets 248
Total ¥8,853
In the Amusement business segment, each division, including captive
outlets, rented outlets and equipment production and sales, is classified
as one asset-grouping unit. In other business segments, classification
of asset groups is carried out based on the relationships between
businesses. Idle assets that are not used for operational purposes and
assets planned for disposal are classified individually, separately from
those mentioned above.
With regard to idle assets presented in the table above, market
value had fallen substantially below book value and the future use of
these assets was deemed uncertain. For these reasons, the book value
of these idle assets has been written down to the applicable market
value. With regard to assets planned for disposal, their recoverable
value was recognized as falling below book value. Consequently, their
book value has been written down to the applicable recoverable value.
For goodwill and intangible assets, asset values were reassessed,
taking into account changes in the market environment, and book
Notes to Consolidated Financial Statements (JPNGAAP)
42