Epson 2006 Annual Report Download - page 69

Seiko Epson Annual Report 2006 67
A reduction in value of ¥34,303 million ($292,015 thousand) was recognized in reorganization costs and other
expenses account. The reduction comprised mainly ¥14,914 million ($126,960 thousand) for buildings and struc-
tures, ¥10,090 million ($85,894 thousand) for machinery and equipment, ¥1,301 million ($11,075 thousand) for
furniture and fixtures, ¥542 million ($4,614 thousand) for intangible assets, and ¥7,102 million ($60,458 thousand)
for long-term prepaid expenses.
The recoverable amounts of impaired business assets were calculated on the basis of the asset’s value in use.
The recoverable amount of idle assets were determined using their net selling prices, which were assessed on the
basis of reasonable estimates. The values in use were calculated by applying a 5.5% discount rate to the asset’s
expected future cash flows.
Impairment losses, which are included in other expenses account, were ¥1,671 million, ¥988 million and ¥1,951
million ($16,608 thousand) for the years ended March 31, 2004, 2005 and 2006, respectively.
17. Cash flow information:
Cash and cash equivalents at March 31, 2005 and 2006 were composed of the following:
Thousands of
Millions of yen U.S. dollars
March 31 March 31,
2005 2006 2006
Cash and deposits ¥235,597 ¥233,087 $1,984,226
Short-term investments – 41,984 357,402
Short-term loans receivables – 10,000 85,128
Sub-total 235,597 285,071 2,426,756
Less:
Short-term borrowings (overdrafts) (421) (594) (5,056)
Time deposits due over three months (272) (2,363) (20,116)
Short-term investments due over three months (–) (2,000) (17,026)
Cash and cash equivalents ¥234,904 ¥280,114 $2,384,558
The Company obtained marketable securities, the fair value of which was ¥10,003 million ($85,154 thousand) at
March 31, 2006, as deposit for the short-term loan receivables above.
18. Leases:
As described in Note 2 (17), Epson, as a lessee, charges periodic capital lease payments to expense when paid.
Such payments for the years ended March 31, 2004, 2005 and 2006 amounted to ¥3,211 million, ¥10,369 million
and ¥17,639 million ($150,157 thousand), respectively.
If capital leases that do not transfer the ownership of the assets to the lessee at the end of the lease term were
capitalized, the capital lease assets at March 31, 2005 and 2006 would have been as follows:
Thousands of
Millions of yen U.S. dollars
March 31 March 31,
2005 2006 2006
Acquisition cost:
Machinery and equipment ¥ 79,822 ¥ 78,183 $ 665,557
Furniture and fixtures 4,394 3,375 28,731
Intangible assets 851 592 5,039
85,067 82,150 699,327
Less:
Accumulated depreciation (38,114) (50,302) (428,211)
Accumulated impairment loss (1,184) (821) (6,989)
(39,298) (51,123) (435,200)
Net book value ¥ 45,769 ¥ 31,027 $ 264,127