The good people at Sony just wrote off a billion dollars

File: Sony.jpg (25KB, 618x412px) Image search: [Google]

25KB, 618x412px

http://variety.com/2017/biz/asia/sony-warns-of-huge-goodwill-loss-1201973089/
http://www.thewrap.com/what-does-the-sony-writedown-mean/

>Early Monday morning, Sony got off to an inauspicious start to its earnings week by eliminating the $962 million in goodwill it had on its balance sheet tied to Sony Pictures’ production and distribution unit. That sent the company’s stock down nearly 4 percent through midday trading and raised speculation about a possible sale of the studio.

>Despite the eye-popping number, the goodwill impairment is a non-cash charge that doesn’t affect the company’s ongoing operations. It has, however, taken a bite out of the Japanese conglomerate’s stock price and could certainly reduce the valuation in an eventual full or partial sale of the studio. Goodwill is an asset, and reducing the value of the asset on a company’s books makes it worth less.

>Companies take a goodwill impairment charge when the book value of assets exceeds their fair value. Or basically, when the asset can no longer deliver the financial results that justify the price paid for it. Almost all the goodwill is from Sony’s acquisition of Columbia Pictures for $3.4 billion in 1989.