Form 20-F X
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Form 40-F __
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SONY GROUP CORPORATION
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(Registrant)
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By: /s/ Hiroki Totoki
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(Signature)
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Hiroki Totoki
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President, Chief Operating Officer and Chief Financial Officer
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1.
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Overview of the Plan and the Approval
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2.
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Expected Schedule of the Spin-off
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May 2025 |
Resolution of the Board of Directors of Sony for the execution of the Spin-off
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October 2025 |
Execution of the Spin-off (effective date of the dividends in kind)
Listing of shares of SFGI |
3.
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Outlook
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(Note 1) |
Toward the execution of the Spin-off, Sony will consider measures from the perspective of tax efficiency for its shareholders. However, at this time, there is no guarantee that the Spin-off would satisfy the requirements for
tax-free treatment in each country, including Japan, and Sony will continuously further consider these details. Regarding the U.S., the Spin-off is expected to be a taxable transaction to U.S. holders of Sony’s common stock and
American Depositary Receipts for U.S. federal income tax purposes because Sony plans to hold the remaining shares of SFGI continuously after the execution of the Spin-off.
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(Note 2) |
Items to be assessed for the execution of the Spin-off include the listing market(s) for the shares of SFGI (*), the necessary steps for dividends in kind in relation to the holders of Sony’s American Depositary Receipts, and the
possibility of satisfying the requirements for tax-free treatment in some countries. In addition, the execution and timing of the Spin-off are subject to approvals, certifications and/or permissions by the relevant stock exchange(s)
and other relevant authorities regarding the steps that are ultimately selected after the assessment of these items.
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(*) |
Under the Plan, the shares of SFGI are planned to be listed on the Tokyo Stock Exchange.
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(Note 3) |
In connection with the Spin-off, Sony expects to primarily apply the following accounting treatments in its consolidated financial statements based on International Financial Reporting Standards (“IFRS”).
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Prior to the execution of the Spin-off, the Financial Services business will be classified as a discontinued operation and presented separately from continuing operations, comprised of Sony’s businesses
without the Financial Services business, in accordance with IFRS 5 “Non-current Assets Held for Sale and Discontinued Operations” (“IFRS 5”). The specific timing for starting such separate presentation will be determined based on the
requirements of IFRS 5, but has not been determined at this time.
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Upon the execution of the Spin-off, Sony will apply accounting for the loss of control of the Financial Services business (“deconsolidation”) in accordance with IFRS 10 “Consolidated Financial
Statements.” In addition to the derecognition of assets and liabilities of the Financial Services business, such deconsolidation mainly includes: (1) reduction in equity by an amount equivalent to the fair value of the shares of SFGI
that will be distributed as dividends in kind, and recording of any difference between the carrying amount and the fair value of such shares of SFGI in net income or loss of the discontinued operations; (2) reclassification of the
balance of accumulated other comprehensive income at the time of deconsolidation, mainly related to debt instruments and insurance contract liabilities, recorded in the Financial Services business to net income or loss of the
discontinued operations (this reclassification would not impact the amount of “Total equity” in Sony’s Consolidated Statements of Financial Position (for reference, total accumulated other comprehensive income recorded in the
Financial Services business as of the end of December 2023 was a loss of approximately 1.3 trillion Japanese yen)); and (3) remeasurement at fair value of the shares of SFGI that Sony continues to hold, and recording of any difference
between the carrying amount and the fair value of such shares of SFGI in net income or loss of the discontinued operations.
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