Additional Takata airbag recalls mean additional costs which US accounting rules say must be accounted for in the previous financial year

Additional Takata airbag recalls mean additional costs which US accounting rules say must be accounted for in the previous financial year

Honda said on Friday it would restate its results for the financial year ended 31 March 2015 due to additional costs in the US related to Takata airbag recalls.

The automaker said these totalled JPY44,800m (about US$363m).

A Honda spokesman told Reuters US accounting rules meant the charges had to be booked in the previous fiscal year rather than the current year.

Honda said in its statement there would be no change to previously announced dividend payments or financial forecasts.

The automaker said in April operating income for its fiscal fourth quarter to 31 March, 2015 fell 32.3% to to JPY111.9bn due to cost rises "including quality-related expenses" and a decline in automobile unit sales in Japan.

Operating income for the full fiscal year was down 13.1% to JPY651.6bn and net income fell 8.9% to JPY522.7bn for the same reasons as in the final quarter.

Show the press release

Notice of Events after the Reporting Period Regarding Product Warranty Expenses Honda Motor Co., Ltd. (the “Company”) and its consolidated subsidiaries have been conducting market-based measures in relation to airbag inflators, such as product recalls and a Safety Improvement Campaign. Due to factors arising since May 2015 such as an expansion of the scope of these market-based measures based on an agreement between our supplier and the U.S. National Highway Traffic Safety Administration, a change has arisen in the estimate relating to product warranty expenses. The amount of product warranty expenses now expected to be incurred is 44,800 million yen. Because these expenses arose subsequent to the date of the accounting audit firm’s audit report (May 8, 2015) for the audit required under the Company Law, the event does not constitute an “adjusting event after the reporting period” that would require adjustment of the consolidated or unconsolidated financial accounts, so the event will not be reflected in the consolidated and unconsolidated financial accounts for the fiscal year ended March 31, 2015. Regarding the consolidated financial statements (based on IFRS) for the fiscal year ended March 31, 2015 to be included in the annual securities report required under the Financial Instruments and Financial Exchange Law (to be submitted to the Financial Services Agency of Japan) and Form 20-F (to be submitted to the U.S. Securities and Exchange Commission) that are scheduled to be submitted in late June 2015, because the event occurred before the date on which the financial statements were authorized for issue, the event will be reflected as an adjusting event in such consolidated financial statements. Further, regarding the summary of consolidated financial results for the fiscal year ended March 31, 2015 (based on U.S. GAAP) announced on April 28, 2015, the event will be reflected as an adjusting event, and the adjusted summary consolidated financial results will be announced in late June 2015, on the same day as the submission of the annual securities report. Please note that there will be no change to the planned year-end cash dividends (22 yen per share) for the fiscal year ended March 31, 2015. Also, there will be no change resulting from the above mentioned event to the consolidated financial forecasts (based on IFRS) or the unconsolidated financial forecasts for the fiscal year ending March 31, 2016, or the expected total cash dividends (88 yen per share) for the fiscal year ending March 31, 2016, which were announced on April 28, 2015. 

 

Original source: HMC