RICOH COMPANY, LTD.
March 19, 2010
VIA EDGAR AND
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OVERNIGHT DELIVERY
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Mr. Kevin L. Vaughn
Accounting Branch Chief
United States Securities and Exchange Commission
Division of Corporation Finance
100 F Street, N.E.
Washington, D.C. 20549-3628
Re: Ricoh Company, Ltd.
Form 20-F for the Fiscal Year Ended March 31, 2009
Filed June 30, 2009
File No. 002-68279
Dear Mr. Vaughn:
In connection with the comments regarding the annual report of Ricoh
Company, Ltd. ("Ricoh") on Form 20-F for the fiscal year ended March 31, 2009 in
your letter dated March 8, 2010, Ricoh offers the following responses. For the
convenience of the staff of the United States Securities and Exchange Commission
(the "Commission"), Ricoh has reproduced the comments set forth in your letter
in boldface type, which is followed by its responses.
Form 20-F for the Fiscal Year Ended March 31, 2009
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Item 5. Operating and Financial Review and Prospects, page 33
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- -Critical Accounting Policies, page 36
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- -Impairment of Long-lived Assets and Goodwill, page 39
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1. In order to provide investors with greater insight into the probability of
a future material impairment charge, please revise your disclosures in
future filings to disclose the following for any of your reporting units
with material amounts of goodwill that are at risk of failing step one:
. Disclose the percentage by which the fair value exceeded carrying
value as of the date of the most recent test;
. Disclose the amount of goodwill allocated to each reporting unit;
. Describe the methods and key assumptions used and how the key
assumptions were determined;
. Describe the degree of uncertainty associated with the key
assumptions; and
. Describe the potential events and/or changes in circumstances that
could reasonably be expected to negatively affect the key assumptions.
RESPONSE:
In accordance with your comment, Ricoh will revise its Item 5 disclosure in
future filings to disclose the items noted above for any of its reporting units
with material amounts of goodwill that are at risk of failing step one.
- -Fiscal Year 2009 Compared to Fiscal Year 2008, page 43
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2. We note disclosures throughout this section that the acquisitions of IKON
and InfoPrint Solutions impacted your results of operations. In order to
provide the reader with greater insight into your results of operations and
the comparability between periods, please revise future filings to quantify
the impact of acquisitions on your results of operations.
RESPONSE:
In accordance with your comment, Ricoh will revise its Item 5 disclosure in
future filings to quantify the impact of acquisitions, including the
acquisitions of IKON Office Solutions, Inc. ("IKON") and InfoPrint Solutions
Company, LLC, on its results of operations.
3. We note your disclosures on page 46 related to the change in your effective
tax rate from fiscal 2008 to fiscal 2009. Please revise your future filings
to explain in greater detail why your effective tax increased significantly
from fiscal 2008 to fiscal 2009. For example, we note from your disclosure
on page F-32 that tax benefits not recognized on operating losses of
certain consolidated subsidiaries significantly impacted your effective tax
rate. Provide investors with a more detailed explanation on the nature of
these benefits, why the benefits were not recognized and why the benefits
not recognized resulted in a significant increase in the effective tax
rate.
RESPONSE:
In accordance with your comment, Ricoh will revise its Item 5 disclosure in
future filings to explain in greater detail why its effective tax increased
significantly from fiscal 2008 to fiscal 2009.
Index to Consolidated Financial Statements, page F-1
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Note 2. Significant Accounting and Reporting Policies, page F-10
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- -(L). Goodwill and Other Intangible Assets, page F-15
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4. We note that you changed your annual impairment measurement date from
September 30, 2008 to December 31, 2008 in connection with your acquisition
of IKON Office Solutions, Inc. on October 31, 2008. With reference to the
guidance in paragraph 350-20-35-28 of the FASB Accounting Standards
Codification, please tell
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us if you completed your impairment testing for goodwill on September 30,
2008 prior to changing your impairment measurement date. Please note the
guidance in Section II.(G)(2) of the Current Accounting and Disclosure
Issues in the Division of Corporation Finance dated November 30, 2006,
which you can find on our website at
http://www.sec.gov/divisions/corpfin/cfacctdisclosureissues.pdf.
RESPONSE:
Prior to changing its impairment measurement date to December 31, 2008,
Ricoh completed its annual impairment testing as of September 30, 2008, and
determined that no impairment charge was necessary.
5. Please tell us and revise your future filings to explain in more detail why
[you] believe that this change in accounting principle related to the
change in measurement date for goodwill is preferable.
RESPONSE:
After completing its annual impairment testing as of September 30, 2008,
Ricoh acquired IKON on October 31, 2008, which resulted in Ricoh recognizing a
material amount of goodwill. However, the business climate in which Ricoh
operates changed significantly in an adverse manner from October 2008, and Ricoh
believed that such adverse change might reduce the fair value of such reporting
unit below its carrying amount. Therefore, Ricoh performed additional impairment
testing as of December 31, 2008. As a result of such additional impairment
testing, Ricoh decided to change its annual impairment measurement date for
goodwill to December 31 in order to better align the goodwill impairment
measurement date with its acquisition of IKON on October 31, 2008.
6. We note that your auditor has not included an explanatory paragraph in its
opinion relating to the change in accounting principle. Please have your
auditor tell us how it has considered the requirements of Article 2 of
Regulation S-X and paragraphs 5-8 of PCAOB Auditing Standard 6 in
concluding that no such explanatory paragraph was necessary.
RESPONSE:
Ricoh's auditor has provided the following response:
We considered the requirements stated in the comment letter at the time of
our issuance of the audit report and concluded that an explanatory paragraph was
not necessary because the change in accounting principle had no impact on
Ricoh's consolidated financial statements.
Note 3. Acquisition, page F-20
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7. We note that you acquired IKON Office Solutions, Inc. for total cash
consideration of Yen 170,310 million and that you allocated Yen 185,864
million to liabilities. Please tell us and revise your future filings to
include a more detailed explanation of the nature of the liabilities that
you assumed in connection with the acquisition.
RESPONSE:
In accordance with your comment, Ricoh will revise the footnotes to its
consolidated financial statements in future filings to include more detail of
the nature of the liabilities assumed in connection with the IKON acquisition.
The below table reflects the October 31, 2008 condensed balance sheet of IKON,
as adjusted to give effect to the purchase method accounting adjustments, and
provides further detail on the liabilities assumed by Ricoh with the IKON
acquisition.
Thousands of
Millions of Yen U.S. Dollars
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Receivables and other assets Yen 138,532 $1,399,313
Property and equipment 18,798 189,879
Identifiable intangible assets 55,566 561,273
Goodwill 143,278 1,447,253
Trade payables (23,616) (238,545)
Debt (81,737) (825,626)
Other liabilities (80,511) (813,242)
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Total cash consideration Yen 170,310 $1,720,303
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Note 6. Securities, page F-26
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8. We note from page F-6 that you recognized Yen 27.8 billion of impairment
losses related to your securities. We further note from page 45 that these
losses were attributable to the decrease in the stock market. Please tell
us and revise your future filings to explain in more detail the nature of
these losses that you recognized during fiscal 2009 related to securities.
Please also revise future filings as appropriate to include the disclosures
outlined in section 320-10-50 of the FASB Accounting Standard Codification.
RESPONSE:
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The explanation of losses on impairment of securities for fiscal year 2009
is as follows. Consolidated losses on impairment of securities for fiscal year
2009 increased by Yen 26.6 billion to Yen 26.8 billion from Yen 0.1 billion for
fiscal year 2008. The impaired securities consist almost entirely of
available-for-sale securities. The number of impaired available-for-sale
securities was 23. The cause of the impairment was the decline of the stock
markets. Ricoh regarded these losses as other-than-temporary impairments because
it did not believe that the quoted market price of such securities would recover
to its cost basis within the near term. Ricoh will include in the footnotes to
its consolidated financial statements in future filings more detailed
explanation of the nature of the losses that it recognized during fiscal 2009
related to securities.
In addition, Ricoh will revise the footnotes to its consolidated financial
statements in future filings as appropriate to include the disclosures outlined
in section 320-10-50 of the FASB Accounting Standard Codification.
Exhibits 12.1 and 12.2
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9. We note that the certifications filed pursuant to Exchange Act Rule
13a-14(a) are not in the exact form prescribed by Instruction 12 to the
Exhibits of Form 20-F. Specifically, we note that you improperly include
the title of the certifying official in the introduction of your
certification. Please revise your certifications in future filings to
conform to the exact wording required by Instruction 12 to the Exhibits of
Form 20-F.
RESPONSE:
In accordance with your comment, Ricoh will revise its certifications
pursuant to Exchange Act Rule 13a-14(a) in future filings to conform to the
exact wording required by Instruction 12 to the Exhibits of Form 20-F, and Ricoh
will not include the title of the certifying individual in the introduction of
such certifications.
* * *
In connection with Ricoh's response to your comments on its filing, Ricoh
acknowledges that (i) Ricoh is responsible for the adequacy and accuracy of the
disclosure in the filings, (ii) staff comments or changes to disclosure in
response to staff comments do not foreclose the Commission from taking any
action with respect to the filings and (iii) Ricoh may not assert staff comments
as a defense in any proceeding initiated by the Commission or any person under
the federal securities laws of the United States.
Should you have any questions regarding the responses set force in this
letter, please do not hesitate to contact my colleague Hisaki Tsunoda, General
Manager of Accounting Department (+81-3-6278-4901;
hisaki.tsunoda@nts.ricoh.co.jp) or myself (+81-3-5411-4738;
zenji.miura@nts.ricoh.co.jp) either by phone and/or email.
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Sincerely,
/s/ Zenji Miura
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Zenji Miura
Director, Chief Financial Officer
Corporate Executive Vice President
Ricoh Company, Ltd.
cc: Ms. Tara Harkins, Staff Accountant
United States Securities and Exchange Commission
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