Ricoh 2008 Annual Report Download - page 41

2008. Ricoh is currently evaluating the effect that the adoption of
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 adoption of SFAS 159 did not have a
material effect on Ricoh’s consolidated financial position or results
of operations.
In December 2007, the FASB issued SFAS No.141 (revised 2007),
“Business Combinations ” (“SFAS 141R”). SFAS 141R establishes
principles and requirements for how an acquirer recognizes and
measures in its financial statements the identifiable assets acquired,
the liabilities assumed, any noncontrolling interest in the acquiree
and the goodwill acquired. SFAS 141R also establishes disclosure
requirements to enable the evaluation of the nature and financial
effects of the business combination. SFAS 141R is effective for
fiscal years beginning on or after December 15, 2008 and is
required to be adopted by Ricoh in the first quarter beginning April
1, 2009. Ricoh will apply prospectively to all business
combinations subsequent to the effective date.
In December 2007, the FASB issued SFAS No.160, “Noncontrolling
Interests in Consolidated Financial Statements - an amendment of
ARB No. 51.” This Statement requires that the noncontrolling
interest in the equity of a subsidiary be accounted for and reported
as equity, provides revised guidance on the treatment of net income
and losses attributable to the noncontrolling interest and changes in
ownership interests in a subsidiary and the valuation of retained
noncontrolling equity investments when a subsidiary is
deconsolidated. SFAS 160 also requires additional disclosures that
identify and distinguish between the interests of the controlling and
noncontrolling owners. Pursuant to the transition provisions of
SFAS 160, Ricoh will adopt SFAS 160 in fiscal year 2009 via
retrospective application of the presentation and disclosure
requirements. Ricoh is currently evaluating the effect that the
adoption of SFAS 160 will have on its consolidated results of
operations and financial condition.
In March 2008, the FASB issued SFAS No.161, “Disclosures about
Derivative Instruments and Hedging Activities, an amendment of
FASB Statement No. 133”. SFAS 161 requires disclosures of how
and why an entity uses derivative instruments, how derivative
instruments and related hedged items are accounted for and how
derivative instruments and related hedged items affect an entity’s
financial position, financial performance, and cash flows. SFAS 161
is effective for fiscal years beginning after November 15, 2008, with
early adoption permitted. Ricoh is currently evaluating the effect
that the adoption of SFAS 161 will have on its consolidated results
of operations and financial condition.
In April 2008, the FASB finalized FSP 142-3, “Determination of the
Useful Life of Intangible Assets”. The position amends the factors
that should be considered in developing renewal or extension
assumptions used to determine the useful life of a recognized
intangible asset under SFAS 142. The position applies to intangible
assets that are acquired individually or with a group of other assets
and both intangible assets acquired in business combinations and
asset acquisitions. FSP 142-3 is effective for fiscal years beginning
after December 15, 2008, and interim periods within those fiscal
years. Ricoh is currently evaluating the effect that the adoption of
FSP 142-3 will have on its consolidated results of operations and
financial condition.
To Our Shareholders
and Customers
Fiscal 2008 Highlights
Fiscal 2008 Milestones 16th Mid-Term
Management Plan
Corporate Governance /
CSR
Financial Section
Sustainable Environmental
Management
40
ANNUAL REPORT 2008
In June 2007, Ricoh and International Business Machines
Corporation (“IBM”) completed formation of a joint venture
company (now known as InfoPrint Solutions Company, LLC) which
was spun-out from on IBM’s Printing Systems Division to provide
output solutions for production printing area.
InfoPrint Solutions Company, LLC will benefit from access to IBM's
powerful worldwide distribution and sales network, as well as
extensive printer development capabilities. The consideration was
paid in a form of cash for the initial 51% acquisition of InfoPrint
Solutions Company, LLC by Ricoh as well as a prepayment for the
remaining 49% to be acquired and certain royalties and services to
be provided by IBM to InfoPrint Solutions Company, LLC. Ricoh
will progressively acquire the remaining 49% over the next three
years, approximately 4% per each quarter, as InfoPrint Solutions
Company, LLC becomes a fully owned subsidiary. Ricoh applied
the purchase method of accounting to account for the acquisition.
Final consideration for this transaction will be determined at the end
of the three-year period based upon the participation in the profits
and losses recorded by the equity partners. Therefore, the amount
of goodwill may be adjusted at the determination of final
consideration. Assets, liabilities and operations of InfoPrint
Solutions Company, LLC have been included in the accompanying
consolidated financial statements since the acquisition date.
The following table reflects the condensed balance sheet of
InfoPrint Solutions Company, LLC, as adjusted to give effect to the
purchase method accounting adjustments:
Thousands of
Millions of Yen U.S. Dollars
Receivables and other assets ¥ 18,121 $ 181,210
Property and equipment 2,214 22,140
Identifiable intangible assets 38,091 380,910
Goodwill 50,301 503,010
Liabilities (15,772) (157,720)
Total cash consideration ¥ 92,955 $ 929,550
Identifiable intangible assets of InfoPrint Solutions Company, LLC
primarily comprised trademark of ¥16,852 million ($168,520
thousand) which were estimated to have a remaining useful life of 5
years to 7 years, existing maintenance contracts of ¥8,289 million
($82,890 thousand) which were estimated to have a remaining
useful life of 9 years, outsourcing agreement of ¥5,162 million
($51,620 thousand) which were estimated to have a remaining
useful life of 1 year to 6 years, and other intangible assets of ¥7,788
3. ACQUISITION