That's.... not right though.

The writedown is in relation to japanese tax credits.

http://newsfeedresearcher.com/data/articles_b22/sony-billion-year.html

"A non-cash charge to establish a valuation allowance of approximately 360 billion yen against certain
deferred tax assets in Japan. Sony evaluates its deferred tax assets on a tax jurisdiction basis to
determine if a valuation allowance is required. In Japan, Sony Corporation files a stand-alone tax
filing for local tax purposes and a consolidated national tax filing with its wholly-owned Japanese
subsidiaries for national tax purposes. Sony Corporation and its national tax filing group in Japan are
in a three year cumulative loss as of March 31, 2011. Under U.S. GAAP, a three year cumulative loss
is considered significant negative evidence regarding the realizability of deferred tax assets, which is
difficult to overcome, particularly given the relatively short tax loss carry forward period of seven
years in Japan and the adverse impact of the Earthquake on the near term forecast for entities in Japan.
Accordingly, Sony determined in the fourth quarter of the fiscal year ended March 31, 2011 that it
was required under U.S. GAAP to establish a valuation allowance against certain deferred tax assets
in Japan."

http://www.sony.net/SonyInfo/IR/financial/fr/10revision_sony.pdf

Under US law. Though the tax credits is from Japan.

"A non-cash charge to establish a valuation allowance of approximately 360 billion yen against certain
deferred tax assets in Japan. Sony evaluates its deferred tax assets on a tax jurisdiction basis to
determine if a valuation allowance is required. In Japan, Sony Corporation files a stand-alone tax
filing for local tax purposes and a consolidated national tax filing with its wholly-owned Japanese
subsidiaries for national tax purposes. Sony Corporation and its national tax filing group in Japan are
in a three year cumulative loss as of March 31, 2011. Under U.S. GAAP, a three year cumulative loss
is considered significant negative evidence regarding the realizability of deferred tax assets, which is
difficult to overcome, particularly given the relatively short tax loss carry forward period of seven
years in Japan and the adverse impact of the Earthquake on the near term forecast for entities in Japan.
Accordingly, Sony determined in the fourth quarter of the fiscal year ended March 31, 2011 that it
was required under U.S. GAAP to establish a valuation allowance against certain deferred tax assets
in Japan."

http://www.sony.net/SonyInfo/IR/financial/fr/10revision_sony.pdf

Under US law. Though the tax credits is from Japan.

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.