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Notice of Impairment Loss on Securities of a Consolidated Subsidiary

July 31, 2007

Yamaha Motor Co., Ltd. (the "Company") decided to post an impairment loss on the capital subscription for its motorcycle manufacturing subsidiary in India, Yamaha Motor India Pvt. Ltd. (YMI), based on a Company assessment of the recoverability of YMI's financial condition. The reason for this accounting decision is as follows: the market value of the Company's shareholder equity in YMI at the closing date of the Company's first half-year (ended June 30, 2007) had fallen by more than 30 percent from the value of its original capital subscription in YMI. Therefore, the Company posted an impairment loss of 7,213 million yen on YMI securities as a non-operating expense on its "Non-Consolidated Statements of Income" for the first half-year ended June 30, 2007.

For reference:

In evaluating a loss on securities of any subsidiary, the Company generally posts the entire amount of the impairment loss on securities whose market value at the end of the first half-year (or the fiscal year) has declined by more than 50 percent relative to the Company's acquisition cost. For securities whose market value at the end of the first half-year (or the fiscal year) has decreased in value by 30 to 50 percent relative to the acquisition cost, the Company posts an impairment loss that has been calculated by the Company relative to the estimated recoverability of a subsidiary's financial condition.


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