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49Hitachi, Ltd. Annual Report 2005
Intangible assets other than goodwill as of March 31, 2005 and 2004 are as follows:
Millions of yen
2005 2004
Gross carrying Accumulated Net carrying Gross carrying Accumulated Net carrying
amount amortization amount amount amortization amount
Amortized intangible assets
Software . . . . . . . . . . . . . . . . ¥402,523 ¥279,139 ¥123,384 ¥335,808 ¥218,972 ¥116,836
Software for internal use . . . . 362,426 189,024 173,402 326,745 151,955 174,790
Patents . . . . . . . . . . . . . . . . . 123,445 24,375 99,070 73,502 14,350 59,152
Other . . . . . . . . . . . . . . . . . . . 96,371 61,769 34,602 75,868 45,064 30,804
¥984,765 ¥554,307 ¥430,458 ¥811,923 ¥430,341 ¥381,582
Unamortized intangible assets . . ¥ 9,382 ¥ – ¥ 9,382 ¥ 13,618 ¥ – ¥ 13,618
Thousands of U.S. dollars
2005
Gross carrying Accumulated Net carrying
amount amortization amount
Amortized intangible assets
Software . . . . . . . . . . . . . . . . $3,761,897 $2,608,776 $1,153,121
Software for internal use . . . . 3,387,159 1,766,579 1,620,580
Patents . . . . . . . . . . . . . . . . . 1,153,692 227,804 925,888
Other . . . . . . . . . . . . . . . . . . . 900,663 577,280 323,383
$9,203,411 $5,180,439 $4,022,972
Unamortized intangible assets . . $ 87,682 $ – $ 87,682
The following table shows the estimated aggregate amortization expense of intangible assets for the next five years.
Millions Thousands of
Years ending March 31 of yen U.S. dollars
2006 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥100,236 $936,785
2007 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 80,885 755,935
2008 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 59,756 558,467
2009 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 39,743 371,430
2010 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25,605 239,299
The changes in the carrying amount of goodwill for the years ended March 31, 2005 and 2004 are as follows:
Thousands of
Millions of yen U.S. dollars
2005 2004 2005
Balance at beginning of the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . ¥53,478 ¥60,317 $499,794
Acquired during the year . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 6,424 10,003 60,038
Impairment loss . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . (13,646) (3,623) (127,533)
Transfer due to divestiture . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . –(8,232) –
Translation adjustment and other . . . . . . . . . . . . . . . . . . . . . . . . . . . . (358) (4,987) (3,346)
Balance at end of the year, included in other assets . . . . . . . . . . . . . . . ¥45,898 ¥53,478 $428,953
Mainly due to severe demands for price reduction in the Automotive industry reporting units in the Power and Industrial
Systems, operating profits and cash flows were lower than expected. Based on that trend, the earnings forecast for the next
three years was revised. The Company’s determination of fair values of the reporting units incorporate the earnings forecast
into its valuation assumptions resulting in a fair market value that was less than its carrying value. The Company recorded a
pretax impairment loss of ¥11,526 million ($107,720 thousand), which was reported in selling, general and administrative
expenses for the year ended March 31, 2005.