Olympus 2014 Annual Report Download - page 48

20. Loss on Restructuring of Business
Loss on restructuring of business of ¥2,947 million recorded in the consolidated statement of operations for the year ended March 31, 2013
stems mainly from the reorganization of the Imaging Business.
21. Extra Severance Payments for Voluntary Retirement
A charge of ¥1,336 million was recorded in the consolidated statement of operations for the year ended March 31, 2013 for extra severance
payments in connection with the results of a solicitation for voluntary retirement for certain employees.
22. Settlement Charge
(1) March 31, 2013
The Company’s former Representative Director, President and Chief Executive Offi cer, Mr. Michael Woodford, fi led an employment tribunal
action against the Company. On May 29, 2012, the Company reached a settlement on a series of disputes, including those related to the
dismissal of Mr. Woodford from his position as the Company’s Representative Director, President and Chief Executive Offi cer. A charge of
¥1,231 million was recorded in the consolidated statement of operation for the year ended March 31, 2013 as settlement charge in “Other
income (expenses).”
(2) March 31, 2014
A charge of ¥6,256 million ($60,738 thousand) was recorded in the consolidated statement of operations for the year ended March 31,
2014 as settlement charge in “Other income (expenses).”
The settlement charge consists of the following:
• ¥6,000 million ($58,252 thousand) paid to Terumo Corporation due to the settlement of the lawsuit (Note 36 “Supplemental information (2)
Settlement of lawsuit”)
• ¥256 million ($2,486 thousand) due to the settlement of the class action on compensation for damages concerning the ADRs’ price plunge.
The class action was fi led in the United States District Court, Eastern District of Pennsylvania on November 14, 2011 by the representative
of all the plaintiffs who purchased ADRs of the Company within the specifi ed period.
23. Loss on Liquidation of Business
Loss on liquidation of business of ¥11,591 million ($112,534 thousand) recorded in the consolidated statement of operations for the year
ended March 31, 2014 stems mainly from the liquidation of the consolidated subsidiaries which conducted the biologics business.
24. Provision for Loss on Litigation
The Company recorded a provision for loss on litigation of ¥11,000 million ($106,796 thousand) in the consolidated statement of operations
for the year ended March 31, 2014 by estimating the amount considered necessary taking into account the progress of the lawsuits which
were fi led against the Company by the Teachers’ Retirement System of the State of Illinois, etc. on June 28, 2012 and California State
Teachers’ Retirement System, etc. on June 27, 2013.
25. Income Taxes for Prior Periods
Income taxes for prior periods in the consolidated statement of operation for the year ended March 31, 2014 were recorded for the
reassessment of the prior year tax returns of the consolidated subsidiary.
Concerning the transactions over fi ve years from the year ended March 31, 2007 to the year ended March 31, 2011 between the do-
mestic consolidated subsidiary and the consolidated subsidiary in England, the Company received the written notice of reassessment on
July 30, 2013 based on transfer pricing taxation. The Company disagreed with the reassessment and fi led a notice of appeal for objection
with the Tokyo Regional Taxation Bureau and entered into the procedure for a mutual agreement with the bureau based on a tax treaty to
avoid double taxation. Considering the estimated effect on the possible mutual agreement, a net amount of ¥1,476 million ($14,330 thou-
sand), or the difference between the reassessed tax amount and the estimated tax refund amount based on the mutual agreement, was
recorded as income taxes for prior periods in the consolidated statement of operations for the year ended March 31, 2014.
19. Impairment Loss on Fixed Assets
The losses on impairment of fi xed assets that the Company and its consolidated subsidiaries recorded for the years ended March 31, 2013
and 2014 were as follows:
For the year ended March 31, 2013
Use Type of assets Location Millions of yen
Assets used for Imaging Business Land
Tokyo, Guangdong
Province in China
and others
¥ 200
Buildings and structures 1,236
Tools, furniture and fi xtures 713
Machinery and equipment 573
Construction in process 66
Right of using facilities 47
Patent 102
Software, etc. 364
Long-term prepaid expenses 432
Assets used for Others Business Land
Massachusetts in
America and others
10
Buildings and structures 579
Tools, furniture and fi xtures 8
Machinery and equipment 328
Construction in process 3
Leased assets 24
Goodwill 16
Patent 19
Software, etc. 11
Technology-related assets 1,031
Marketing rights 348
Assets scheduled for disposal Software Tokyo 1,490
Total ¥7,600
For the year ended March 31, 2014
Use Type of assets Location Millions of yen
Thousands of
U.S. dollars
Assets used for Others Business Buildings and structures
Tokyo,
Massachusetts in
America and others
¥2,394 $23,243
Tools, furniture and fi xtures 137 1,330
Machinery and equipment 906 8,796
Construction in process 340 3,301
Goodwill 174 1,689
Long-term prepaid expenses 400 3,883
Idle properties Buildings and structures Fukushima 488 4,738
Assets scheduled for disposal Software Singapore 32 311
Total ¥4,871 $47,291
The Company and its consolidated subsidiaries mainly classify their assets for business use into groups based on business segment.
However, assets to be disposed of and idle assets are classifi ed as respective independent groups of assets.
Some assets for business use were not expected to make a profi t constantly because of the deterioration in the business environment.
As a result, carrying amounts for assets for business use were written down to their recoverable amounts. The recoverable amount is mea-
sured according to the value in use or net selling price based on real estate appraisal. When the value in use based on future cash fl ows is
estimated to be negative, the assets are assumed to have no recoverable value.
With regard to assets scheduled for disposal, a decision has been made to dispose of an in-house system for supporting operational
effi ciency improvement. As a result, the book value of these assets is considered to be zero.
Carrying amounts of idle properties were written down to their recoverable amounts, owing to substantial decline in the fair market
values. The recoverable amounts were estimated by net realizable values of fi xed assets which were calculated based on net selling price.
Notes to the Consolidated Financial Statements
93
OLYMPUS Annual Report 2014
92 OLYMPUS Annual Report 2014