By using this site, you agree to our Privacy Policy and our Terms of Use. Close

Forums - Sony Discussion - Sony warns of massive $3.1 billion FY2011 loss (PSN outtage $171 million)

S____M____C____C on 23 May 2011
yo_john117 said:
Xen said:

Not all that shocking, really - their exps were outed prior to the Japanese quake and tsunami, and we all saw how much damage that one did. Sony just can't catch a break.

I was gonna ask why Sony is losing such a large sum this year but I forgot about the Japanese quake and stuff.

Still sucks they are gonna lose so much...i'm assuming this is all of Sony not just the Playstation branch.

they are hardly losing anything, at least not now and at least not in cash terms.

unless someone can professionaly clarify this deferred tax assets situation, we can't really know future implications in too much detail.



Around the Network
NJ5 on 23 May 2011
M.U.G.E.N said:

and also LOL at those articles in which 'analysts' claimed PSN issue will cost sony Billions (2Bn iirc)


It's way too early to LOL about that. This is just Sony's estimate of the cost, I'm pretty sure they aren't predicting to lose any big lawsuits in that estimate...



My Mario Kart Wii friend code: 2707-1866-0957

S____M____C____C on 23 May 2011
M.U.G.E.N said:
S____M____C____C said:
M.U.G.E.N said:

The OP and some of the article authors should take note of some of our posters, hats off to those who noted the differred tax situation.

http://accounting-financial-tax.com/2009/08/deferred-tax-asset-and-its-valuation-allowance-with-case-examples/

Sony's fine :)

 

Here is a better article

"The immediate cause was a Y360bn one-time tax charge, as Sony wrote-off deferred tax credits it had banked during the past two years of deficits. The credits have value only if Sony is confident it can earn taxable profits in Japan in the future – but it said that confidence had been eroded by the disaster."

http://www.ft.com/cms/s/2/bf4fd94a-8506-11e0-871e-00144feabdc0.html?ftcamp=rss#axzz1NBEGhjGZ

but sony still owes the government Y360bn in taxes for the period ending 5 years from now? 

so, if it doesn't return to profit in the next couple of years, this could be quite harmful.

am i correct? this dta stuff is frying my head

lol don't worry. I'm an Accounting student just entering his Intermediate series and this stuff still confuse the *&%^ out of me. I'm gonna do my best to answer here and if Im mistaken I would be more than happy if someone can point it out

In essense I think you are right, it all comes down to their future performance as well. They posted 2 successive years of losses so by GAAP (actually wonder if Japan uses GAAP or IFRS) they HAVE to put this tax expense in their books by law if I'm not mistaken. Overall the bottom line is, it's not as bad as it may sound initially. Also I think sony have a positive on their operating income which is important, that's the foundation. They will be fine unless some extraordinary losses like tsunami happens again.

actually wonder if the tsunami costs can be considered as extraordinary costs. It depends on whether the area affected by it has a history of such tsunamis or not.

at the end of all this jibber jabber the bottom line is sony isn't doing great, but they aren't that bad off either. Here is a nice post I found on GAF with some extra details

http://www.neogaf.com/forum/showpost.php?p=28003272&postcount=109

and also LOL at those articles in which 'analysts' claimed PSN issue will cost sony Billions (2Bn iirc)

haha, we'll i'm an a-level business studies student at the minute so i was completely mindf**cked earlier, but i think i've got a decent grip on it now.

as a person i like to know everything, so when i don't know stuff it really annoys me. sucks.

and yea, if sony can return to profit in the next couple of years i don't believe any of this to be an issue. they are certainly much healthier now than they were a few years back due to the restructuring.

i guess they would have been mad not to write down these taxes now. 



M.U.G.E.N on 23 May 2011
NJ5 said:
M.U.G.E.N said:

and also LOL at those articles in which 'analysts' claimed PSN issue will cost sony Billions (2Bn iirc)


It's way too early to LOL about that. This is just Sony's estimate of the cost, I'm pretty sure they aren't predicting to lose any big lawsuits in that estimate...


http://news.yahoo.com/s/nm/20110505/tc_nm/us_sony_insurance_1

http://www.gamespot.com/news/6310436/psn-data-leak-cost-could-top-24-billion-report

no no it's still very much lol

LOL



In-Kat-We-Trust Brigade!

"This world is Merciless, and it's also very beautiful"

For All News/Info related to the PlayStation Vita, Come and join us in the Official PSV Thread!

S____M____C____C on 23 May 2011
NJ5 said:
M.U.G.E.N said:

and also LOL at those articles in which 'analysts' claimed PSN issue will cost sony Billions (2Bn iirc)


It's way too early to LOL about that. This is just Sony's estimate of the cost, I'm pretty sure they aren't predicting to lose any big lawsuits in that estimate...

sony stated that they foresee 'incremental' costs with restructuring its securities.

i don't think anything as steep as $2bn is realistic. there seems to be no misuse of credit cards and the vast majority of the information released wasn't truely confidential to be honest. also, their security measures were better than we initially thought - there was encryption etc.



Around the Network
M.U.G.E.N on 23 May 2011
S____M____C____C said:
M.U.G.E.N said:
S____M____C____C said:
M.U.G.E.N said:

The OP and some of the article authors should take note of some of our posters, hats off to those who noted the differred tax situation.

http://accounting-financial-tax.com/2009/08/deferred-tax-asset-and-its-valuation-allowance-with-case-examples/

Sony's fine :)

 

Here is a better article

"The immediate cause was a Y360bn one-time tax charge, as Sony wrote-off deferred tax credits it had banked during the past two years of deficits. The credits have value only if Sony is confident it can earn taxable profits in Japan in the future – but it said that confidence had been eroded by the disaster."

http://www.ft.com/cms/s/2/bf4fd94a-8506-11e0-871e-00144feabdc0.html?ftcamp=rss#axzz1NBEGhjGZ

but sony still owes the government Y360bn in taxes for the period ending 5 years from now? 

so, if it doesn't return to profit in the next couple of years, this could be quite harmful.

am i correct? this dta stuff is frying my head

lol don't worry. I'm an Accounting student just entering his Intermediate series and this stuff still confuse the *&%^ out of me. I'm gonna do my best to answer here and if Im mistaken I would be more than happy if someone can point it out

In essense I think you are right, it all comes down to their future performance as well. They posted 2 successive years of losses so by GAAP (actually wonder if Japan uses GAAP or IFRS) they HAVE to put this tax expense in their books by law if I'm not mistaken. Overall the bottom line is, it's not as bad as it may sound initially. Also I think sony have a positive on their operating income which is important, that's the foundation. They will be fine unless some extraordinary losses like tsunami happens again.

actually wonder if the tsunami costs can be considered as extraordinary costs. It depends on whether the area affected by it has a history of such tsunamis or not.

at the end of all this jibber jabber the bottom line is sony isn't doing great, but they aren't that bad off either. Here is a nice post I found on GAF with some extra details

http://www.neogaf.com/forum/showpost.php?p=28003272&postcount=109

and also LOL at those articles in which 'analysts' claimed PSN issue will cost sony Billions (2Bn iirc)

haha, we'll i'm an a-level business studies student at the minute so i was completely mindf**cked earlier, but i think i've got a decent grip on it now.

as a person i like to know everything, so when i don't know stuff it really annoys me. sucks.

and yea, if sony can return to profit in the next couple of years i don't believe any of this to be an issue. they are certainly much healthier now than they were a few years back due to the restructuring.

i guess they would have been mad not to write down these taxes now. 

mad and depending on the tax laws there, might have not had a choice either. But that's something I have no clue about. and many are waiting to see Thursday's financials to get a clear idea on the numbers. It should give a clear idea on where their operations are at at the moment ignoring incidents like earthquakes and such



In-Kat-We-Trust Brigade!

"This world is Merciless, and it's also very beautiful"

For All News/Info related to the PlayStation Vita, Come and join us in the Official PSV Thread!

Grooski on 23 May 2011

For the common folk who don't have a clue what the hell this means.

Sony gets tax credits for making a loss in previous years, reducing their taxable income this year. Under US law (remembering Sony is an international company) this credit is only applied if Sony can show reasonable probability that they will return to net profit in three years. This is their third year and they are still in a rolling loss.

Sony have indicated that they will create a $1billion operating profit next year, but the uncertain costs of the earthquake/tsunami mean they cannot be sure. As a precaution, and because of these US regulations, they have included a valuation of 360 billion yen on the asset (ie written off the asset). This is just an accounting write-off

It doesn't affect anything to do with how Sony is travelling this year, in fact, Sony made a $700million operating profit. They don't have to pay more taxes now, but if they don't return to profits in the next 1-2 years, this write off will become an actual write-off hitting their bottom line. 



ethomaz on 23 May 2011
Grooski said:

For the common folk who don't have a clue what the hell this means.

Sony gets tax credits for making a loss in previous years, reducing their taxable income this year. Under US law (remembering Sony is an international company) this credit is only applied if Sony can show reasonable probability that they will return to net profit in three years. This is their third year and they are still in a rolling loss.

Sony have indicated that they will create a $1billion operating profit next year, but the uncertain costs of the earthquake/tsunami mean they cannot be sure. As a precaution, and because of these US regulations, they have included a valuation of 360 billion yen on the asset (ie written off the asset). This is just an accounting write-off

It doesn't affect anything to do with how Sony is travelling this year, in fact, Sony made a $700million operating profit. They don't have to pay more taxes now, but if they don't return to profits in the next 1-2 years, this write off will become an actual write-off hitting their bottom line.

So true...  I even posted the document links from Sony explaining everything right but I guess no one looked .



Alby_da_Wolf on 23 May 2011

Good for Sony the situation isn't bad, despite the first look, before the explanations. Sony should anyway worry about its net security and better it as much and as soon as possible, PSN hack damages, despite lower, are in the same order of magnitude of those caused by the tsunami.

LOL @haters that hoped for $ billions PSN affair damages, anyway.   



Stwike him, Centuwion. Stwike him vewy wuffly! (Pontius Pilate, "Life of Brian")
A fart without stink is like a sky without stars.
TGS, Third Grade Shooter: brand new genre invented by Kevin Butler exclusively for Natal WiiToo Kinect. PEW! PEW-PEW-PEW!   


Rafux on 23 May 2011

Michael Pachter already said that like a week ago