Depreciation of Solar Power Generation Equipment Using the Straight-Line Method

「The straight-line method is also used for assets related to solar power generation.」

「The straight-line method is also used for assets related to solar power generation facilities.」

「The Group had previously depreciated machinery and equipment and vehicles using the declining-balance method, but from the third quarter of the current consolidated fiscal year it adopted the straight-line method for machinery and equipment related to solar power generation facilities. This change was prompted by the acquisition of new solar power generation facilities during the third quarter of the current consolidated fiscal year. Upon reviewing the actual use of the Group’s solar power generation facilities, the Group determined that, because they are expected to operate stably over the useful lives and make a stable contribution to earnings, allocating costs through equal depreciation under the straight-line method would more appropriately and reasonably reflect their actual use. As a result, gross profit, operating profit, ordinary profit and profit before income taxes for the nine months of the current consolidated fiscal year each increased by ¥42,565 thousand.」