Pioneer 2007 Annual Report Download - page 30

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PIONEER CORPORATION29
We have the following accounts receivable securitization
programs. In the United States of America, we have established
PUSA Receivables Funding Corporation, a wholly-owned, bank-
ruptcy-remote, special-purpose entity and established an accounts
receivable securitization program of eligible trade accounts
receivable. A bankruptcy-remote subsidiary is a company that
has been structured so as to make it highly unlikely that it
would be drawn into a bankruptcy of any Pioneer group
companies. Through this program, we can securitize and sell,
without recourse, on a revolving basis, an undivided interest up
to $100 million in that pool of receivables to third-party
conduits owned by a bank. These securitization transactions
are accounted for as sales in accordance with SFAS No. 140,
“Accounting for Transfers and Servicing of Financial Assets and
Extinguishments of Liabilities,” because we have surrendered
control over the receivables. We sold a total of ¥18.7 billion of
receivables under this program in fiscal 2007. In Japan, we set
up several accounts receivable sales programs of eligible trade
accounts receivable. Through these programs, we can sell
receivables, without recourse, to financial institutions. These
transactions are accounted for as sales in accordance with
SFAS No. 140, because we have surrendered control over the
receivables. We sold a total of ¥11.7 billion of receivables
under this program in fiscal 2007.
We utilize these programs to diversify our options to
increase the flexibility of our cash flow control. Our cash
flow management would not be critically effected without
these programs.