From the Olympus Website--A little better translation than DPReview

Started Feb 14, 2013 | Discussions thread
John King
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Re: Camera companies and profitability and capitalisation
In reply to John Koch, Feb 16, 2013

Without having access to the detailed accounting records of the company, it is impossible to make the kinds of statements that you are making.

All I have said is that write downs are a sunk cost - i.e. a loss or other cost incurred in a previous accounting period that are now being brought to account.

The same with the tax liability. Are you really trying to argue that Olympus has a current liability (as at 31 March 2012) based on its making a substantial loss in that year? No. Taxation liabilities are always incurred in the making of profits, not losses. Now they may have taxation liabilities that have arisen as a result of past transactions that have not previously been brought to account.

The above are just a couple of simple reasons why I (almost automatically) remove these figures from my considerations. Neither figure had much, if any, relevance to the current financial year (as at 31 March 2012). I guess that being a CPA in public practice for many years gives me a somewhat different take on these things from that of most people ...

Making the kind of broad generalisations about future trading activities of a company based on your logic would not be sensible! There is an assumption implicit in your analysis that requires Olympus to keep on doing what caused these problems in the first place. One of those things would require them to reinstate the corrupt board who are facing a number of criminal charges, including (IIRC) false accounting.

A company is simply not permitted to just "forget about" such false accounting and fraudulent behaviour. It must bring these things to account. That is what Olympus has done.

In order to set their house in order, Olympus has had to (financially) acknowledge the sins of the past, and has to make proper plans for the future that are not predicated on "business as usual" under a corrupt board.

It appears to be doing just that.
I, for one, wish them the very best in their endeavours.

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Regards, john from Melbourne, Australia.
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