Casio 2010 Annual Report Download - page 45

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Annual Report 2010
17. Business Structure Improvement Expenses and Impairment Loss
1. Business structure improvement expenses
For 2010:
The expected amount of the said losses was posted in the provision for business structure improvement to provide against the
accrual of losses following the subsidiary merger resulting from the business integration of its mobile terminal business.
For 2009:
The Company and its consolidated subsidiaries have posted an impairment loss of noncurrent assets used in the Electronic
Components business and related costs with the aim of improving profitability of the business.
2. Impairment loss
For 2009:
The Company and its consolidated subsidiaries have posted an 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 carry 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 a 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) were recognized as
“business structure improvement expenses” and “impairment loss.”
The breakdown of the losses is: ¥315 million for buildings and structures, ¥2,365 million for machinery and equipment, ¥931
million for lease assets, ¥1,753 million for goodwill, ¥3,624 million for accrued lease payments, and ¥746 million 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
For 2009:
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 the Company.
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) Summary of total spin-off and sale process, including its 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.