Toshiba 2009 Annual Report Download - page 71

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19
(iv) Impairment of long-lived assets and goodwill
If events or changes in circumstances indicate that the carrying amount of any long-lived asset will not be recovered by the
future undiscounted cash flow, the loss is recognized as an impairment, and impairment loss is recognized as the amount by
which carrying value of the assets exceeds its fair value. A substantial amount of goodwill has been recorded in the
Company’s consolidated balance sheet in accordance with US generally accepted accounting principles. Goodwill is required
to be tested for impairment annually. If an impairment test shows that the total of the carrying amounts, including goodwill,
in relation to the business related to such goodwill exceeds its fair value, the relevant goodwill must be recalculated, and the
balance of the current amount and the recalculated amount will be recognized as an impairment. Therefore, additional
impairments may be recorded, depending on the valuation of long-lived assets and the estimate of future cash flow from busi-
ness related to goodwill.
(25) Financing environment and others
The Group has substantial amounts of interest-bearing debt for financing that is highly susceptible to market environments,
including interest rate movements and fund supply and demand. Thus, changes in these factors may have an adverse effect
on the Group’s funding activities. The Group also has loans from financial institutions. There can be no assurance that the
Group will obtain refinancing loans or new loans in the future on similar terms. If the Group is unable to obtain loans for
the necessary amount in a timely manner, the Group’s financing may be materially adversely affected.
(26) Takeover defense measure
The Company introduced a plan for countermeasures to any large-scale acquisitions of the Company’s shares (the “Takeover
Defense Measure”). However, this Takeover Defense Measure ceased to be effective at the close of the ordinary general
shareholders’ meeting of the Company that was held in June 2009. In response to this situation, the Takeover Defense
Measure, after partial amendment, was renewed for three more years subject to the shareholders’ approval at the ordinary
general shareholders’ meeting. If a person making a large-scale acquisition of the Company’s shares does not comply with the
procedures under the Takeover Defense Measure, the Company will make a gratis allotment of stock acquisition rights
(shinkabu yoyakuken) as a countermeasure under the Takeover Defense Measure. Although such Takeover Defense Measure
was introduced for the purpose of protecting and enhancing the corporate value of the Company and the common interests
of its shareholders, it may limit the opportunities for the shareholders of the Company to sell their shares to hostile acquir-
ers.