Toshiba to post 300 billion yen loss from Westinghouse write-down: sources

Toshiba Corp. is expected to book an impairment loss of some 300 billion yen for the business year that ended in March by writing down the asset value of its U.S. nuclear subsidiary Westinghouse Electric Co., sources close to the company say.

At the same time, Toshiba is expected to include in its consolidated financial statement the profits from the sale of its subsidiary Toshiba Medical Systems Corp. to Canon Inc., and bring its final deficit down to somewhere around 500 billion yen from the initially anticipated figure of a record 710 billion yen.

Toshiba acquired Westinghouse in 2006 for some 600 billion yen, listing around 350 billion yen in goodwill as the firm deemed nuclear power its core business. However, orders for nuclear plants plunged in the wake of the Fukushima No. 1 Nuclear Power Plant disaster in 2011, pushing down the profitability of Toshiba's nuclear plant business. After reassessing the declining asset value of Westinghouse, the firm decided to declare the impairment loss in accordance with accounting rules.

As talks between Toshiba and its auditing firm have been prolonged, however, the amount of losses may change and Toshiba's announcement of its revised earnings forecasts may come sometime after April 26 -- when an extraordinary board meeting is to be held.

In November last year, there were reports that Westinghouse had posted total losses of more than 160 billion yen in the two business years ending in March 2013 and March 2014. However, Toshiba didn't include these losses in its consolidated financial statements on the grounds that its maintenance and inspection business for existing nuclear plants was doing well. After being accused of murky accounting practices, however, the firm decided to include those losses in its upcoming statement.

Toshiba, which is still reeling from a highly publicized accounting scandal, has worked on streamlining measures, including selling its signature home appliance business to a Chinese electronics giant to return to the black with a 40 billion yen surplus in its consolidated accounting for the business term ending March 2017. The company is now eyeing rehabilitating itself by focusing on the energy, social infrastructure and semiconductor businesses.