Annual Report 2007 - Komatsu

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS
Thousands of U.S. dollars
2007
Gross
Net
carrying Accumulated carrying
amount amortization amount
Other intangible assets subject to amortization:
Software $199,500 $ (97,907) $101,593
Other 99,797 (31,475) 68,322
Total 299,297 (129,382) 169,915
Other intangible assets not subject to amortization 44,009
Total other intangible assets $213,924
The aggregate amortization expense of other intangible assets subject to amortization for the year ended March 31, 2007, 2006
and 2005 were ¥5,656 million ($47,932 thousand), ¥5,665 million and ¥6,440 million, respectively. (In accordance with SFAS
No. 144, the amortization expense in connection with the discontinued operations is not included in the aggregate amortization
expense for the year ended March 31, 2007, 2006 and 2005.) The future estimated amortization expenses for each of five years
relating to amounts currently recorded in the consolidated balance sheet are as follows:
Thousands of
Year ending March 31 Millions of yen U.S. dollars
2008 ¥ 4,517 $ 38,280
2009 4,186 35,475
2010 3,567 30,229
2011 2,503 21,212
2012 1,513 12,822
The changes in carrying amounts of goodwill for the year ended March 31, 2007 and 2006 were as follow:
Thousands of
Millions of yen
U.S. dollars
2007 2006 2007
Balance at beginning of the year ¥22,000 ¥21,277 $186,441
Goodwill acquired during the year 124 3,904 1,051
Impairment loss — (3,581) —
Recognition of deferred income taxes (1,387) — (11,754)
Foreign exchange impact 57 400 482
Other (200) — (1,695)
Balance at end of the year ¥20,594 ¥22,000 $174,525
At March 31, 2007, the amounts of goodwill allocated to
the construction and mining equipment segment and the industrial
machinery, vehicles and others segment were ¥20,569
million ($174,314 thousand) and ¥25 million ($211 thousand),
respectively.
For the fiscal year ended March 31, 2007, Komatsu recognized
¥1,387 million ($11,754 thousand) of deferred income
taxes relating to preexisting net operating tax losses and temporary
differences deductible in the future. In connection
therewith, Komatsu reduced the related goodwill by the same
amount.
For the fiscal year ended March 31, 2006, Komatsu recognized
an impairment loss of ¥3,041 million, on goodwill allocated
to a reporting unit in the construction and mining
equipment segment due to unfavorable business circumstance
where the net assets of the reporting unit was located. In
addition, an impairment loss of ¥540 million was recognized in
the electronics segment. The impairment losses were recognized
based on the difference by which the net book value of
the reporting unit to which the goodwill was assigned exceeded
the estimated fair value of the same reporting unit as determined
based on estimated future discounted cash flows.
Goodwill acquired during the fiscal year ended March 31,
2006 principally resulted from the acquisition of additional
shares of PT Komatsu Indonesia Tbk, and was allocated to the
construction and mining equipment segment and the industrial
machinery, vehicles and others segment.
65 Annual Report 2007