Toshiba 2014 Annual Report Download - page 153

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TOSHIBA Annual Report 2014
28. Variable Interest Entities
The Group recognizes entities, in accordance with ASC No.810, as VIEs that have either (a) equity investors whose voting
right is limited and not having an ability to control it effectively or (b) insufficient equity to permit the entity to finance its
activities without additional subordinated financial support. The Group retains variable interests through equity
investments, loans and guarantees. In evaluating whether the Group is the primary beneficiary of the VIE and consolidates
it, the Group assesses if the Group has both (a) the power to direct the activities of the VIE that most significantly impact
the VIE's economic performance and (b) the obligation to absorb losses or the right to receive benefits that could
potentially be significant to the VIE.
Consolidated Variable Interest Entities
VIEs, of which the Group is the primary beneficiary, are involved in Energy & Infrastructure, and most of those are entities
involved in the Power and Social Infrastructure Systems. The Group has both the power to direct the activities that most
significantly affect those VIEs' economic performance and the obligation to absorb losses or the right to receive benefits
from the VIEs. The Group is also required to contribute capital to each VIE on an as needed basis based on percentage of
ownership interest.
As of March 31, 2014 and 2013, the total assets of VIEs on the consolidated balance sheets were ¥24,376 million
($236,660 thousand) and ¥18,682 million, and the total liabilities of VIEs on the consolidated balance sheets were ¥14,961
million ($145,252 thousand) and ¥12,432 million, respectively. The assets consisted primarily of property, plant and
equipment. The liabilities consisted primarily of accounts payable. The assets are restricted for use only by those VIEs, and
are not available for the Group's general operations. In addition, the creditors or beneficial interest holders of those VIEs
do not have recourse to the general credit of the Group.
Unconsolidated Variable Interest Entities
VIEs, of which the Group is not the primary beneficiary but retains significant variable interests, are involved in Electronic
Devices and Energy & Infrastructure. Unconsolidated VIEs involved in Electronic Devices are joint ventures established
with SanDisk Corporation (“SanDisk”) for the purpose of strengthening the production of NAND flash memories. For
those joint ventures, the Group and SanDisk share power equally. Unconsolidated VIEs involved in Energy & Infrastructure
are established for the purpose of developing nuclear power plants, supplying stable electric power systems, and
providing electric services and equipment to electric power operators. The principal VIE involved in Energy &
Infrastructure is an entity which is seeking regulatory approval for the construction of a nuclear power plant. For the year
ended March 31, 2014, the Group recorded a loss of ¥30,961 million ($300,592 thousand) due to a reassessment of the
value of assets of the VIE involved in Energy & Infrastructure in the United States. The Group is not the primary beneficiary
of those VIEs because the Group does not have the power to direct the activities that most significantly affect those VIEs'
economic performance. The Group accounts for those VIEs under the equity method.
As of March 31, 2014 and 2013, the total assets of those VIEs, carrying amounts of assets and liabilities that relate to the
Group's variable interests in the VIEs and the Group's maximum exposures to losses as a result of the Group's involvement
with the VIEs are summarized as follows:
Millions of yen
March 31, 2014
VIEs involved in
Electronic Devices
VIEs involved in
Energy & Infrastructure
Total฀assets฀of฀VIEs ¥ 350,094 ¥ 119,639
Carrying฀amounts฀of฀assets฀that฀relate฀to฀the฀Group's฀variable฀interests฀in฀the฀VIEs 135,781 42,639
Carrying฀amounts฀of฀liabilities฀that฀relate฀to฀the฀Group's฀variable฀interests฀in฀the฀VIEs 15,145 7,923
Maximum฀exposures฀to฀losses 174,782 34,716