Fujitsu 2014 Annual Report Download - page 136

Purpose: Assets used in European business
Category: Goodwill and other intangible assets
Location: Germany and other countries
In principle, the Group’s business-use assets are grouped based on units that management uses to make decisions, and idle assets
are grouped on an individual asset basis.
The Group has continually promoted structural reforms of its LSI devices business, as the LSI devices business has been confronted with
an extraordinarily difficult operating environment, such as fast-deteriorating market conditions and an increasingly severe competitive
situation, resulting in the declining sales. The Group transferred the Iwate Plant to DENSO Corporation in October 2012, and also transferred
the LSI assembly and testing facilities to J-Devices Corporation in December 2012. In February 2013, the Group made decisions to establish
a new fabless company in system LSI business, in which capital participation from outside investors will be accepted, and transfer the busi-
ness to the new company. Furthermore, the Group decided to transfer 300 mm line of the Mie Plant to a new foundry company.
In conjunction with transfers stated above, the Group reviewed the grouping of assets within LSI device business. As a result, the
Group recognized impairment losses on asset groups of standard logic LSI devices production line, such as 200 mm lines in the Mie and
Fukushima regions and assets group of the LSI assembly and testing facilities. The losses of ¥28,123 million were recorded as restructur-
ing charges and included in “Other, net” under “Other income (expenses)” in the consolidated income statements. Impairment losses for
the Iwate Plant were already recognized in the year ended March 31, 2012.
Other than those described above, the Group recognized impairment losses of ¥24,895 million on the remaining unamortized bal-
ance of goodwill and ¥3,154 million on other intangible assets recorded at the time when the remaining shares of Fujitsu Technology
Solutions (Holding) B.V. were acquired. In the standalone financial statements of the Company, impairment losses on the investments
in the subsidiaries* were recognized. Due to the recession in Europe and intensification of price competition in PCs and x86 servers, the
Group determined that it would not be able to achieve its original return on its investment planned for ten years in April 2009 (date of
acquisition). The losses are recorded as impairment losses and included in “Other, net” under “Other income (expenses)” in the consoli-
dated income statements.
In addition, consolidated subsidiaries in Japan recognized impairment losses related to assets used in businesses with low profit-
ability and welfare facilities for employees planned to be sold. The losses consists of ¥6,236 million of impairment losses and ¥143
million of restructuring charges included in “Other, net” under “Other income (expenses)” in the consolidated income statements.
Total impairment losses consist of ¥26,600 million for goodwill, ¥16,319 million for buildings, ¥5,430 million for land, ¥6,520
million for machinery and equipment, ¥3,826 million for other intangible assets and ¥3,856 million for other assets.
The recoverable amount is measured at fair value less costs of disposal or value in use. The fair value less costs of disposal is mea-
sured based on the amount obtainable from the sale of assets less any costs of disposal. Regarding the LSI device business, the recover-
able amount calculated by value in use is measured at the residual value because negative future cash flow is expected.
* In the standalone financial statements of the Company, the Company has adopted a cost method for valuation of the investments in its subsidiaries. The impair-
ment losses on such investments are generally recognized when the net assets of its subsidiaries decrease significantly due to a deterioration of subsidiaries’ finan-
cial condition and when the decline is deemed to be irrecoverable.
Loss on Changes in Retirement Benefit Plan
Loss on changes in retirement benefit plan includes the costs related to changes to a defined contribution pension plan by a consoli-
dated subsidiary in Japan.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
134 FUJITSU LIMITED ANNUAL REPORT 2014