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Sony?s Goodwill and Segment Reporting




Question;Read Appendix B, "Sample Brief Memorandum," that starts on page 193 of the textbook. In 2-3 pages (12 point font, double spaced), critique the memorandum based on what we've learned so far in the course. For example, does the memorandum use the SEC's "plain English" concepts and cite authoritative sources?APPENDIX BSample Brief MemorandumRE: Sony?s Goodwill and Segment ReportingFacts:Sony is a Japanese multinational company that decided to expand its entertainment business in the United States. Sony purchased CBS Records and Columbia Pictures to form Sony Music and Sony Pictures. Because of these acquisitions, Sony assumed debt of $1.2 billion and allocated $3.8 billion to goodwill. On Sony?s Annual Report filed with the SEC, Sony reported only two industry segments: electronics and entertainment. While Sony Music was profitable, Sony Pictures produced continued losses of approximately $1 billion. When Sony purchased the motion pictures operations, it projected a loss for only five years because it assumed that the motion pictures entertainment would become profitable. However, Sony suffered a significant loss after amortization and the costs of financing the acquisition for the past four years. Moreover, in the current year, Sony Pictures sustained a loss of nearly $450 million, double the amount that Sony had planned. To date, Sony Pictures has had total net losses of nearly $1 billion. Early in the year, Sony declared that it had written down $2.7 billion in goodwill associated with the acquisition of Sony Pictures. Sony combined the results of Sony Music and Sony Pictures and reported them as Sony Entertainment. Little profit was shown in Sony Entertainment. Sony?s consolidated financial statements did not disclose the losses from Sony Pictures.


Paper#40892 | Written in 18-Jul-2015

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