JVC 2007 Annual Report Download - page 56

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19 SUBSEQUENT EVENTS
(1) Capital reduction of important consolidated subsidiaries
A resolution of capital reduction of JVC Entertainment, Inc., a subsidiary in the United States, was approved at the
Board of Directors Meeting on March 27, 2007, and implemented on April 10, 2007.
(Reason for capital reduction)
JVC Entertainment, Inc. was established as an investment corporation of JVC in accordance with the Company’s
move into the motion picture business.
Nevertheless, JVC Entertainment, Inc. has been in a dormant state after JVC’s withdrawal from the motion pic-
ture business, therefore its capital was reduced to the minimum required level.
(Amount of capital reduction)
US$100,000 thousand
(Impact of the above event on consolidated profit/loss)
Extraordinary losses of ¥2.5 billion were incurred due to the difference of exchange rates between the time of
investment and capital reduction.
(2) Merger of important subsidiaries
A resolution of a merger of US JVC CORP. with JVC Americas Corp. was approved at the Board of Directors
Meeting on March 27, 2007, and implemented in April. The details of this business combination involved in this
merger are as follows:
• Names of combined parties and description of business
US JVC CORP. (a United States regional company) and JVC Americas Corp. (a regional company of the Americas)
• Legal structure of the business combination
Transaction under common control
• Name of company after business combination
JVC Americas Corp.
• Summary of transactions
The administrative functions in US JVC CORP. were transferred to JVC Americas Corp.
• Date of merger
April 15, 2007
• Summary of accounting procedure
An accounting policy for a commonly-controlled business combination involving entities under common control
was adopted for this merger, based on the accounting standards, “Opinion Concerning Establishment of
Accounting Standard for Business Combinations” issued by the Business Accounting Deliberation Council on
October 31, 2003 and the implementation guidance for the accounting standard for business combinations and
separations (the Financial Accounting Standard Implementation Guidance No. 10 issued by the Accounting
Standards Board of Japan on December 22, 2006).
(3) Change of segmentation
From the fiscal year ending March 31, 2008, the Company changed its business segments as follows;
“Consumer electronics business”, “Professional electronics business”, “Components & Devices business”,
“Entertainment business” and “Other business”.
Until the year ended March 31, 2007, the Company reported its business segment information as “Consumer
electronics business”, “Professional electronics business”, “Components & Devices business”, “Software & Media
business” and “Other business”.
In connection with the change, the product category of the recording media is transferred from the “Software &
Media business” to the “Other business”.
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