Nikon just issued this statement regarding recognition of extraordinary losses:
Notice Regarding Recognition of Extraordinary Losses and Reversal of Deferred Tax Assets in Non-Consolidated Financial Statements
NIKON CORPORATION (hereinafter “the Company”) expects to post extraordinary losses and to reverse a part of deferred tax assets in its non-consolidated financial statements, which are prepared in accordance with Japanese GAAP, for the fiscal year ended March 31, 2020.
Using the future plan that reflects the impact and more caused by the spread of COVID-19 to business activities, the Company has assessed an indication that fixed assets may be impaired, performed valuation of financial assets, and examined the recoverability of deferred tax assets.
As a result, the Company has decided to post an impairment loss of 5.7 billion yen for the fixed assets held by Imaging Product Business. And for Nikon Metrology NV, the Company’s consolidated subsidiary, a loss on valuation of the investments in subsidiaries and affiliates and provision for loss on business of subsidiaries and affiliates will be recognized 6.7 billion yen and 9.2 billion yen, respectively. The Company has also decided to reverse a part of deferred tax assets and post deferred tax expenses of 20.6 billion yen. However, the losses associated with the subsidiary mentioned above will have no impact on the consolidated financial results, as those losses will be eliminated in the consolidated financial statements.
Notice Regarding Revision of the Consolidated Financial Forecast for the Fiscal Year Ended March 31, 2020 and Recognition of Impairment Losses
This is to announce that the consolidated financial forecast announced on February 6, 2020 is revised as below, reflecting our recent business performance trend, and to disclose that impairment losses are expected to be recognized.
1. Revision of the Consolidated Financial Forecast
Revised Consolidated Financial Forecast for the Fiscal Year Ended March 31, 2020 (From April 1, 2019 to March 31, 2020)
2. Reason for Revision of the Consolidated Financial Forecast
Decrease in revenue is expected due to factors such as the delay in installations of FPD lithography system, affected by the spread of COVID-19. In addition, operating profit, profit before income taxes and profit attributable to owners of the parent are also expected to be lower than the previous forecast due to the recognition of impairment losses of 11.1 billion yen for non-current assets, as indicated below in “3. The Recognition of Impairment Losses.”
Based on these situations, the consolidated financial forecast announced on February 6, 2020 is revised as above.
3. Recognition of Impairment Losses
For the fiscal year ended March 31, 2020, indication of impairment for non-current assets was examined based on its future utilization and the impact caused by the spread of COVID-19 on business operations. As a result of measuring the recoverable amount of the cash-generating units in which impairment was indicated, a sufficient recoverable amount was not estimated in the Imaging Products Business and the Industrial Metrology Business and Others. Therefore, impairment losses of 11.1 billion yen are to be recognized. In the Imaging Products Business, impairment losses of 7.5 billion yen mainly for property, plant and equipment and intangible assets are to be recognized. In the Industrial Metrology Business and Others, impairment losses of 3.6 billion yen mainly for goodwill, property, plant and equipment and intangible assets are to be recognized.
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