Goodwill and intangible assets

12 Months Ended

Mar. 31, 2012

9.	*Goodwill and intangible assets*

Intangible assets acquired during the fiscal year ended March 31, 2012 totaled 174,430 million yen, of which 174,275 million yen is subject to amortization and are comprised of the following:


	Intangible assets acquired during the year		Weighted-average amortization period
	Yen in millions		Years
Patent rights, know-how and license agreements*¹		103,036		7
Customer relationships		19,793		14
Trademarks		14,177		7
Software to be sold, leased or otherwise marketed		23,621		3
Other		13,648		4

*1	Includes intellectual property cross-licensing and developed technology relating to the Sony Ericsson acquisition. Refer to Note 24.

Intangible assets subject to amortization are comprised of the following:


	Yen in millions
	March 31, 2011					March 31, 2012
	Gross carrying amount		Accumulated amortization			Gross carrying amount		Accumulated amortization
Patent rights, know-how and license agreements		122,444		(69,224	)		226,142		(80,334	)
Customer relationships		3,051		(1,105	)		23,758		(1,409	)
Trademarks		4,938		(1,401	)		20,214		(2,154	)
Software to be sold, leased or otherwise marketed		76,112		(40,447	)		98,852		(58,865	)
Music catalogs		160,325		(40,455	)		157,699		(45,570	)
Artist contracts		27,727		(17,903	)		27,401		(19,419	)
Television carriage agreements (broadcasting agreements)		35,874		(228	)		36,216		(2,370	)
Other		82,519		(40,136	)		87,843		(54,338	)

Total		512,990		(210,899	)		678,125		(264,459	)

The aggregate amortization expense for intangible assets for the fiscal years ended March 31, 2010, 2011 and 2012 was 57,069 million yen, 52,763 million yen and 57,023 million yen, respectively. The estimated aggregate amortization expense for intangible assets for the next five years is as follows:


Fiscal year ending March 31	Yen in millions
2013		68,735
2014		58,885
2015		48,971
2016		41,218
2017		36,509

Total carrying amount of intangible assets having an indefinite life are comprised of the following:


	Yen in millions
	March 31
	2011		2012
Trademarks		66,967		66,729
Distribution agreements		18,834		18,807
Other		3,230		4,497

Total		89,031		90,033

The changes in the carrying amount of goodwill by segment for the fiscal years ended March 31, 2011 and 2012 are as follows:


	Yen in millions
	Imaging Products & Solutions			Game			Mobile Products & Communications*¹		Home Entertainment & Sound			Devices			Pictures			Music			Financial Services			All Other			Total
Balance, March 31, 2010:
Goodwill — gross		4,883			123,881			—		5,320			62,441			102,481			110,192			3,020			40,938			453,156
Accumulated impairments		(300	)		—			—		(5,320	)		—			—			(306	)		(706	)		(7,655	)		(14,287	)

Goodwill		4,583			123,881			—		0			62,441			102,481			109,886			2,314			33,283			438,869

Increase (decrease) due to:
Acquisitions*²		1,085			—			—		—			—			46,504			203			—			55			47,847
Sales and dispositions		—			(257	)		—		—			—			—			—			—			—			(257	)
Impairments		—			—			—		—			—			—			—			—			—			—
Translation adjustments		76			(510	)		—		—			(45	)		(8,401	)		(6,956	)		—			(1,499	)		(17,335	)
Other*³		—			171			—		—			232			—			(445	)		—			(77	)		(119	)

Balance, March 31, 2011:
Goodwill — gross		6,044			123,285			—		5,320			62,628			140,584			102,994			3,020			39,417			483,292
Accumulated impairments		(300	)		—			—		(5,320	)		—			—			(306	)		(706	)		(7,655	)		(14,287	)

Goodwill		5,744			123,285			—		0			62,628			140,584			102,688			2,314			31,762			469,005

Increase (decrease) due to:
Acquisitions		—			166			128,522		—			—			1,330			—			—			4,358			134,376
Sales and dispositions		—			—			—		—			(589	)		—			—			—			—			(589	)
Impairments*⁴		—			—			—		—			—			—			—			—			(932	)		(932	)
Translation adjustments		124			(240	)		9,733		—			(107	)		(3,073	)		(1,891	)		—			(585	)		3,961
Other³⁵		(201	)		—			—		—			(28,773	)		(521	)		(147	)		—			579			(29,063	)

Balance, March 31, 2012:
Goodwill — gross		5,967			123,211			138,255		5,320			33,159			138,320			100,956			3,020			43,769			591,977
Accumulated impairments		(300	)		—			—		(5,320	)		—			—			(306	)		(706	)		(8,587	)		(15,219	)

Goodwill		5,667			123,211			138,255		0			33,159			138,320			100,650			2,314			35,182			576,758

*1	The 128,522 million yen in the fiscal year ended March 31, 2012 relates to the Sony Ericsson acquisition. Refer to Note 24.

*2	Substantially all of the acquisition amounts in the Pictures segment relate to the Game Show Network, LLC (“GSN”) acquisition. Refer to Note 24.

*3	Other primarily consists of purchase price adjustments for prior years and amounts reclassified as held for sale.

During the fiscal year ended March 31, 2012, Sony recorded impairment losses of 932 million yen in a reporting unit included in All Other. The impairment charge reflected the overall decline in the fair value of the reporting unit. The fair value of the reporting unit was estimated using the expected present value of future cash flows.

During the fiscal year ended March 31, 2012, Sony entered into a memorandum of understanding with a third-party to sell the chemical products business, which is included in the Devices segment. Sony classified certain assets and liabilities related to the business as held for sale as of March 31, 2012, and anticipates completing the divestiture during the fiscal year ending March 31, 2013. No impairment loss was recognized as a result of the held for sale classification. The assets held for sale include 29,182 million yen of goodwill and it was reclassified to other assets in the consolidated balance sheets. Refer to Note 25.

As described in Note 2, Sony performs an annual impairment test for goodwill. As a result of the impairment test, there were no impairments other than the one noted above for the fiscal year ended March 31, 2012.

- Definition

The entire disclosure for the aggregate amount of goodwill and a description of intangible assets, which may include (a) for amortizable intangible assets (also referred to as finite-lived intangible assets), the carrying amount, the amount of any significant residual value, and the weighted-average amortization period, (b) for intangible assets not subject to amortization (also referred to as indefinite-lived intangible assets), the carrying amount, and (c) the amount of research and development assets acquired and written off in the period, including the line item in the income statement in which the amounts written off are aggregated, if not readily apparent from the income statement. Also discloses (a) for amortizable intangibles assets in total and by major class, the gross carrying amount and accumulated amortization, the total amortization expense for the period, and the estimated aggregate amortization expense for each of the five succeeding fiscal years, (b) for intangible assets not subject to amortization the carrying amount in total and by major class, and (c) for goodwill, in total and for each reportable segment, the changes in the carrying amount of goodwill during the period (including the aggregate amount of goodwill acquired, the aggregate amount of impairment losses recognized, and the amount of goodwill included in the gain (loss) on disposal of a reporting unit). If any part of goodwill has not been allocated to a reportable segment, discloses the unallocated amount and the reasons for not allocating. For each impairment loss recognized related to an intangible asset (excluding goodwill), discloses: (a) a description of the impaired intangible asset and the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method for determining fair value, (c) the caption in the income statement or the statement of activities in which the impairment loss is aggregated, and (d) the segment in which the impaired intangible asset is reported. For each goodwill impairment loss recognized, discloses: (a) a description of the facts and circumstances leading to the impairment, (b) the amount of the impairment loss and the method of determining the fair value of the associated reporting unit, and (c) if a recognized impairment loss is an estimate not finalized and the reasons why the estimate is not final. May also disclose the nature and amount of any significant adjustments made to a previous estimate of an impairment loss.

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