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Goodwill and intangible assets

12 Months Ended

Mar. 31, 2024

11.	Goodwill and intangible assets

(1)

Goodwill

The changes in goodwill for the fiscal years ended March 31, 2023 and 2024 are as follows:


	Yen in millions
	Fiscal year ended March 31
	2023			2024
Balance at beginning of the fiscal year
Cost		1,312,615			1,649,041
Accumulated impairments		(359,720	)		(373,929	)

Carrying amount		952,895			1,275,112

Increase (decrease) due to:
Acquisitions *		274,499			70,791
Disposals or classified as held for sale		(445	)		(14,491	)
Impairments		—			—
Translation adjustments		48,163			155,688

Total changes		322,217			211,988

Balance at end of the fiscal year
Cost		1,649,041			1,884,627
Accumulated impairments		(373,929	)		(397,527	)

Carrying amount		1,275,112			1,487,100

Refer to Note 30 for the details of the acquisitions.

The carrying amounts of goodwill by segment as of March 31, 2023 and 2024 are as follows:


	Yen in millions
	March 31
	2023		2024
Game & Network Services *1		407,121		465,647
Music *2		579,969		710,888
Pictures *3		259,055		279,949
Entertainment, Technology & Services		14,654		15,829
Imaging & Sensing Solutions		3,479		3,953
Financial Services		10,834		10,834
All Other		—		—

Total		1,275,112		1,487,100

Game & Network Services

All of the goodwill shown in the G&NS line of the table above is allocated to a group of CGUs which comprise the entire G&NS segment.

Intangible assets with indefinite useful lives related to the G&NS business have carrying amounts of 57,409 million yen and 57,438 million yen, as of March 31, 2023 and 2024, respectively, which are included in “Other intangible assets.” Intangible assets with indefinite useful lives include the trademark for PlayStation

, which is assessed to have an indefinite useful life as the trademark for PlayStation

is utilized as the core trademark for Sony’s products and services throughout the G&NS segment and Sony expects to continue using the trademark in the foreseeable future as well.

The recoverable amount of the group of CGUs is determined by the value in use. The value in use is calculated by discounting the estimated future cash flows including a terminal value. The estimated future cash flows are prepared based on the MRP. A terminal value after the final year of the total forecasted period is determined by utilizing a perpetual growth rate. The growth rate and the

pre-tax

discount rate were 1.5% and 10.8% as of March 31, 2023, and 1.5% and 9.6% as of March 31, 2024, respectively.

Music

Goodwill shown in the Music line of the table above is primarily allocated to the worldwide recorded music and the worldwide music publishing CGUs excluding operations in Japan.

Goodwill related to the worldwide recorded music CGU has carrying amounts of 255,834 million yen and 342,653 million yen, as of March 31, 2023 and 2024, respectively. The recoverable amount of the CGU is determined by the value in use. The value in use is calculated by discounting the estimated future cash flows including a terminal value. The estimated future cash flows are prepared based on the MRP. A terminal value after the final year of the total forecasted period is determined by utilizing a perpetual growth rate. The growth rate and the

pre-tax

discount rate were 1.0% and 12.8% as of March 31, 2023, and 1.0% and 12.5% as of March 31, 2024, respectively.

Goodwill related to the music publishing CGU has carrying amounts of 290,833 million yen and 330,240 million yen, as of March 31, 2023 and 2024, respectively. The recoverable amount of the CGU is determined by the value in use. The value in use is calculated by discounting the estimated future cash flows including a terminal value. The estimated future cash flows are prepared based on the MRP. A terminal value after the final year of the total forecasted period is determined by utilizing a perpetual growth rate. The growth rate and the

pre-tax

discount rate were 3.0% and 11.1% as of March 31, 2023, and 3.0% and 11.4% as of March 31, 2024, respectively.

Pictures

Goodwill shown in the Pictures line of the table above is primarily allocated to the animation distribution CGU.

Goodwill related to the animation distribution CGU has carrying amounts of 124,265 million yen and 141,155 million yen, as of March 31, 2023 and 2024, respectively. The recoverable amount of the CGU is determined by the value in use. The value in use is calculated by discounting the estimated future cash flows including a terminal value. The estimated future cash flows are prepared based on the MRP, with revenues in years beyond the MRP based on declining growth rates. A terminal value is based on a revenue multiple applied to the final year of the total forecasted period. The growth rates beyond the MRP period were 5.0% to 15.0% and 5.0% to 12.0%, and the

pre-tax

discount

rates

were

16.2

% and

15.9

% as of March

2023

and

2024

, respectively.

The value in use calculation uses key assumptions such as the

pre-tax

discount rate, perpetual growth rate, competitive and regulatory environment, and technology trends. For each assumption, historical experience, external information, competitors and industry trends are taken into account. Sony does not expect the recoverable amounts to be lower than the carrying amounts even when the growth rate and

pre-tax

discount rate that are used in the evaluation of the recoverable amounts change within a reasonably predictable range.

(2)	Content assets

The changes in content assets for the fiscal years ended March 31, 2023 and 2024 are as follows:


	Yen in millions
	Film costs			Broadcasting rights			Music catalogs			Artist contracts			Music distribution rights			Game content			Content assets Total
Balance as of April 1, 2022:
Cost		3,549,934			395,045			914,418			30,278			43,219			46,086			4,978,980
Accumulated amortization and impairment losses		(3,096,457	)		(293,827	)		(209,628	)		(15,035	)		(9,158	)		(12,829	)		(3,636,934	)

Carrying amount		453,477			101,218			704,790			15,243			34,061			33,257			1,342,046

Changes in carrying amount:
Additions *1		526,273			83,491			27,839			942			35			10,725			649,305
Acquisitions through business combinations		419			7			607			—			1,171			46,079			48,283
Disposals or classified as held for sale		(38,899	)		—			—			—			—			(7	)		(38,906	)
Amortization		(381,753	)		(76,824	)		(31,686	)		(1,285	)		(2,755	)		(15,820	)		(510,123	)
Impairment losses		(13,815	)		—			(236	)		—			—			(152	)		(14,203	)
Translation adjustment		27,228			4,665			50,980			1,086			937			294			85,190
Other		—			—			—			—			—			290			290

Total changes		119,453			11,339			47,504			743			(612	)		41,409			219,836

Balance as of March 31, 2023:
Cost		4,320,022			419,025			1,008,942			32,484			45,988			97,386			5,923,847
Accumulated amortization and impairment losses		(3,747,092	)		(306,468	)		(256,648	)		(16,498	)		(12,539	)		(22,720	)		(4,361,965	)

Carrying amount		572,930			112,557			752,294			15,986			33,449			74,666			1,561,882

Changes in carrying amount:
Additions *1		329,104			97,028			20,842			3,061			146			83,757			533,938
Acquisitions through business combinations and other *2		—			—			229,884			15,075			2,627			—			247,586
Disposals or classified as held for sale		(35,927	)		(7,371	)		—			(224	)		—			(227	)		(43,749	)
Amortization		(397,855	)		(93,240	)		(43,779	)		(1,394	)		(3,146	)		(31,594	)		(571,008	)
Impairment losses		(13,454	)		(883	)		—			(16	)		—			(1,064	)		(15,417	)
Translation adjustment		76,678			16,150			106,777			3,168			2,045			10,063			214,881

Total changes		(41,454	)		11,684			313,724			19,670			1,672			60,935			366,231

Balance as of March 31, 2024:
Cost		5,216,247			528,970			1,401,970			54,131			52,498			170,058			7,423,874
Accumulated amortization and impairment losses		(4,684,771	)		(404,729	)		(335,952	)		(18,475	)		(17,377	)		(34,457	)		(5,495,761	)

Carrying amount		531,476			124,241			1,066,018			35,656			35,121			135,601			1,928,113

The additions in Film costs include the cost of films internally produced and acquired from third party projects. Film costs acquired from third party projects are not a significant portion of Film costs recorded by Sony. The additions in Broadcasting rights, Music catalogs, Artist contracts and Music distribution rights mainly represent acquisitions through contracts with third parties. The additions in Game content primarily include internally developed game content for the fiscal year ended March 31, 2023 and include approximately equal amounts of internally developed game content and externally acquired game content for the fiscal year ended March 31, 2024.

*2	Refer to Notes 27 (7) and 30 (3).

(3) Other intangible assets

The changes in other intangible assets for the fiscal years ended March 31, 2023 and 2024 are as follows:


	Yen in millions
	Patent rights, know-how and license agreements			Customer relationships			Trademarks			Software			Television carriage contracts			Other			Total
Balance as of April 1, 2022
Cost		213,649			58,427			32,683			952,153			61,939			155,479			1,474,330
Accumulated amortization and impairment losses		(193,982	)		(37,342	)		(8,053	)		(678,177	)		(33,881	)		(72,792	)		(1,024,227	)

Carrying amount		19,667			21,085			24,630			273,976			28,058			82,687			450,103
Changes in carrying amount:
Additions		6,432			—			17			117,019			—			3,323			126,791
Acquisitions through business combinations		2,056			9,237			16,655			26,298			—			38,394			92,640
Internal development		—			—			—			19,835			—			—			19,835
Disposals or classified as held for sale		(8	)		(112	)		(14	)		(2,907	)		—			(129	)		(3,170	)
Amortization		(8,152	)		(9,437	)		(4,290	)		(94,821	)		(3,954	)		(14,566	)		(135,220	)
Impairment losses		(8	)		(93	)		—			(342	)		—			(66	)		(509	)
Translation adjustment		156			1,483			1,516			3,715			2,176			613			9,659
Other		(1,121	)		158			699			4,299			—			(322	)		3,713

Total changes		(645	)		1,236			14,583			73,096			(1,778	)		27,247			113,739

Balance as of March 31, 2023:
Cost		201,243			66,593			51,747			1,045,743			66,583			199,311			1,631,220
Accumulated amortization and impairment losses		(182,221	)		(44,272	)		(12,534	)		(698,671	)		(40,303	)		(89,377	)		(1,067,378	)

Carrying amount		19,022			22,321			39,213			347,072			26,280			109,934			563,842

Changes in carrying amount:
Additions		8,854			—			20			145,515			—			6,038			160,427
Acquisitions through business combinations		371			2,003			1,887			13			—			123			4,397
Internal development		—			—			—			20,096			—			—			20,096
Disposals or classified as held for sale		(16	)		(1,697	)		(616	)		(5,576	)		(33	)		(244	)		(8,182	)
Amortization		(8,838	)		(10,166	)		(5,874	)		(110,296	)		(4,129	)		(14,587	)		(153,890	)
Impairment losses		(16	)		—			—			(8	)		—			(571	)		(595	)
Translation adjustment		444			2,472			5,094			10,981			3,329			4,963			27,283
Other		97			—			(104	)		2,193			—			38			2,224

Total changes		896			(7,388	)		407			62,918			(833	)		(4,240	)		51,760

Balance as of March 31, 2024:
Cost		212,000			70,560			59,377			1,196,266			75,716			211,848			1,825,767
Accumulated amortization and impairment losses		(192,082	)		(55,627	)		(19,757	)		(786,276	)		(50,269	)		(106,154	)		(1,210,165	)

Carrying amount		19,918			14,933			39,620			409,990			25,447			105,694			615,602