Casio 2009 Annual Report Download - page 45

43
Annual Report 2009
17. Business Structure Improvement Expenses and Impairment Loss
1. Business structure improvement expenses
Business structure improvement expenses refers to impairment loss of noncurrent assets used in the Electronic Components busi-
ness and related costs with the aim of improving profitability of the business.
2. Impairment loss
For the reporting period, the Company and its consolidated subsidiaries have posted impairment loss. Details are as follows:
Use Type of assets Location
Production facilities used in the Electronic
Components business
Machinery and equipment, lease assets,
goodwill, accrued lease payments
Nankoku City, Kochi Pref.
Ome City, Tokyo
Idle assets Buildings and structures Fussa City, Tokyo
The Company and its consolidated subsidiaries carries out asset grouping principally according to its management accounting
categories, which are employed to enable continuous monitoring of the Group’s earnings situation. Idle assets are managed on an
individual basis. The Company and its subsidiaries have applied impairment accounting to assets used in the Electronic Components
business whose values are deemed to have significantly declined due to deteriorating business environment and idle assets to make
optimal use of these assets in the future.
Book-value of these assets was reduced to recoverable amounts and the reduced amounts (¥9,734 million [$99,327 thousand])
were recognized as “business structure improvement expenses” and “impairment loss.”
The breakdown of the losses is: ¥315 million ($3,214 thousand) for buildings and structures, ¥2,365 million ($24,133 thousand)
for machinery and equipment, ¥931 million ($9,500 thousand) for lease assets, ¥1,753 million ($17,888 thousand) for goodwill,
¥3,624 million ($36,980 thousand) for accrued lease payments, and ¥746 million ($7,612 thousand) for others.
Recoverable amounts are estimated using net selling prices which are reasonably estimated, primarily on the basis of appraisal
land prices as determined by real estate appraiser.
18. Business Combination and Corporate Separation
1. Sale of operations
(1) Name of purchaser of business, nature of operations, principal reason for sale, date and outline of method of sale
1) Name of purchaser of business
Hitachi Cable, Ltd.
2) Nature of operations of business sold
The Film Device Business of Casio Micronics Co., Ltd. a consolidated subsidiary of Casio Computer, Co., Ltd.
3) Principal reason for sale
Without collaboration with other companies, Casio Micronics had only limited capabilities in terms of raising funds, cutting
costs, enhancing price competitiveness and strengthening marketing in its various businesses. It was judged necessary to
consider ways of reducing the costs of investment and strengthening the fundamentals of the Film Device Business, such as
alliances with other companies including a transfer of the business.
After close consultations with Hitachi Cable, it was recognized that synergies could be maximized through a business
integration since both companies had separate customer bases but complementary technological competencies. In discussing
how to effect this integration it was decided that the best option was to transfer to Hitachi Cable all Film Device Business
operations, that is to say its chip-on-film (COF) businesses (chip-on-film for LCD, and COF semiconductor mounting).
4) Date of sale
June 1, 2008
5) Outline of total spin-off and sale process, including legal form
The Film Device Business of Casio Micronics was transferred to a new company established by Casio Micronics for that
purpose. All shares in the new company were then sold to Hitachi Cable.
(2) Outline of accounting procedures for the business transfer
1) Net proceeds from the transfer: zero
2) Fair book-value of assets and liabilities employed in the business transferred:
Millions of Yen
Thousands of
U.S. Dollars
Current assets .................................................................................................................... ¥1,506 $15,367
Noncurrent assets .............................................................................................................. 5,258 53,653
Total assets ........................................................................................................................ ¥6,764 $69,020
Current liabilities ................................................................................................................ 562 5,735
Noncurrent liabilities .......................................................................................................... 211 2,153
Total liabilities .................................................................................................................... ¥ 773 $ 7,888
(3) Income generated from and expenses used for the operations transferred posted on the consolidated statements of income of
the Company for the term ended March 31, 2009:
Millions of Yen
Thousands of
U.S. Dollars
Net sales ............................................................................................................................ ¥1,416 $14,449
Operating income .............................................................................................................. 00