Ricoh 2007 Annual Report Download - page 41

that the adoption of SFAS 156 will have on its consolidated results of
operations and financial condition.
In September 2006, the FASB issued SFAS No. 157, “Fair Value
Measurements”, which defines fair value, establishes a framework for
measuring fair value, and expands disclosures about fair value
measurements. SFAS 157 applies under other accounting
pronouncements that require or permit fair value measurements, where
fair value is the relevant measurement attribute. The standard does not
require any new fair value measurements. SFAS 157 is effective for fiscal
years beginning after November 15, 2007, and is required to be adopted
by Ricoh in fiscal year beginning April 1, 2008. The Company is
currently evaluating the effect that the adoption of SFAS 157 will have
on its consolidated results of operations and financial condition.
In September 2006, the FASB issued SFAS 158. SFAS158 requires
companies to recognize an asset or liability for the overfunded or
underfunded status of their benefit plans in their financial statements
and to recognize changes in that funded status in comprehensive
income (loss) in the year in which the changes occur. SFAS 158 also
requires the measurement date for plan assets and liabilities to coincide
with the sponsor’s year-end. The standard provides two transition
alternatives related to the change in measurement date provisions. The
recognition of an asset and liability related to the funded status
provision is effective for fiscal years ending after December 15, 2006.
The effect of adoption of SFAS 158 on Ricoh’s financial condition as of
March 31, 2007 has been included in the accompanying consolidated
financial statement. The change in measurement date provisions is
effective for fiscal years ending after December 15, 2008 and is required
to be adopted by Ricoh in fiscal year beginning April 1, 2008. The
Company is currently evaluating the effect that the adoption
measurement date provisions will have on its consolidated results of
operations and financial condition.
In February 2007, the FASB issued SFAS No. 159, “The Fair Value Option
for Financial Assets and Financial Liabilities-including an amendment
of FASB statement No.115”. SFAS 159 permits entities to choose to
measure many financial instruments and certain other items at fair
value. Unrealized gains and losses on items for which the fair value
option has been elected will be recognized in earnings. SFAS 159 is
effective for fiscal year beginning after November 15, 2007, and is
required to be adopted by Ricoh in fiscal year beginning April 1, 2008.
The Company is currently evaluating the effect that the adoption of
SFAS 159 will have on its consolidated results of operations and
financial condition.
In July 2006, the FASB released FASB Interpretation (“FIN”) No. 48,
“Accounting for Uncertainty in Income Taxes, an interpretation of FASB
Statement No. 109”. FIN 48 clarifies the accounting and reporting for
uncertainties in income tax law. FIN 48 prescribes a comprehensive
model for the financial statement recognition, measurement,
presentation and disclosure of uncertain tax positions taken or expected
to be taken in income tax returns. FIN 48 shall be effective for fiscal
years beginning after December 15, 2006 and is required to be adopted
by Ricoh in fiscal year beginning April 1, 2007. The Company is
currently evaluating the effect that the adoption of FIN 48 will have on
its consolidated results of operations and financial condition.
To Our Shareholders and
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40
ANNUAL REPORT 2007
In January 2007, Ricoh Europe B.V. , which is a wholly-owned
subsidiary of the Company acquired the European operations of Danka
Business Systems PLC (now known as Infotec Europe B.V. ) for total
cash consideration of ¥27,132 million ($229,932 thousand) including
direct acquisition costs. Ricoh made the acquisition to strengthen its
sales and service network in major countries in Europe.
Ricoh used the purchase method of accounting to account for the
acquisition and, accordingly, the purchase price has been allocated to
the tangible and intangible net assets of Infotec Europe B.V. based on
the estimated fair value of such net assets. The amount of consideration
paid in excess of the estimated fair value of the net assets acquired of
¥18,658 million ($158,119 thousand) was recorded as goodwill which
is not tax deductible. Assets, liabilities and operations of Infotec Europe
B.V. have been included in the accompanying consolidated financial
statements since the acquisition date.
The following table reflects the January 31, 2007 condensed balance
sheet of Infotec Europe B.V., as adjusted to give effect to the purchase
method accounting adjustments:
Thousands of
Millions of Yen U.S. Dollars
Cash and cash equivalents ¥ 3,839 $ 32,534
Receivables and other assets 22,385 189,703
Property and equipment 1,434 12,153
Identifiable intangible assets 4,883 41,381
Goodwill 18,658 158,119
Liabilities (24,067) (203,958)
¥ 27,132 $ 229,932
3. ACQUISITION