MITSUBISHI ESTATE Annual Report 2013
50standard, “Revised Accounting Standard for Consolidated Financial Statements” (ASBJ Statement No. 22 issued on March 25, 2011) and other related standards and guidance. Accordingly there is no special purpose companies need to be disclosed. The following tables represent the Company’s transactions with major special purpose companies for the scal year ended March 31, 2012.As part of its real estate business, the Company makes preferred investments in special purpose companies that are established under the Asset Liquidation Law of Japan. The Company intends to recover such preferred investments through rental revenue and subsequent sale of real estate that has been obtained by the special purpose companies from their customers or sale of such real estate after construction of buildings on it. Effective April 1, 2012, the Company early adopted the new accounting 19Transactions with Special Purpose CompaniesAmounts of preferred investment as of March 31, 2012Millions of yen2012Preferred investment securities (*1)¥164,487Major revenue (cost) from transactions with special purpose companiesMillions of yen2012Preferred investment securities: revenue (*2)¥ 274Other income (*3)18Management business: revenue (*4)1,940Real estate rent: cost (*5)3,199Design management business: revenue (*6)938(*1) Preferred investment securities are indicated as amount of investment and speci c bonds as at March 31, 2012. The Company considers that its exposure to loss that may arise in the future is limited to the amount of its preferred investments.(*2) The Company records dividends from such investments as revenue from operations and related expense as cost of revenue from operations.(*3) The Company records interest incomes from such speci c bonds as other income.(*4) The Company, Mitsubishi Estate Building Management Co., Ltd. and Mitsubishi Jisho Property Management Co., Ltd. provide asset management business to special purpose companies and record such service income as revenue from operations.(*5) The Company enters into real estate rental agreements with special purpose companies and records such rent expenses as cost of revenue from operations.(*6) Mitsubishi Jisho Sekkei Inc. and MEC Design International Corporation provide design management services and remodeling services to special purpose companies and record such service incomes as revenue from operations. The Company does not own investments with voting rights for any special purpose companies and does not send directors and employees to any special purpose companies. The following table sets forth major assets and liabilities of the special purpose companies as of their recent nancial closing dates. Excluded are special purpose companies whose nancial closing dates are yet to come because their initial scal years have just started.Major assetsMillions of yen2012Real estate¥562,718Other29,893Total¥592,611Major liabilities and net assetsMillions of yen2012Debt and other (*7)¥354,521Preferred investments (*8)238,090Total¥592,611(*7) Debt and other include speci c bonds.(*8) Preferred investments include contributions made by the Company.20Rental PropertiesThe Company and some of its consolidated subsidiaries own of ce buildings for lease, commercial facilities for lease and others in Tokyo and other areas including overseas countries (the United States and the United Kingdom) for the purpose of obtaining revenue from leases. Some of ce buildings for lease in Japan are regarded as real estate including space used as rental properties since they are used by the Company and some of its consolidated subsidiaries.The followings are the carrying value on the consolidated balance sheet as of March 31, 2013 and the fair values of these rental properties and real estate including space used as rental properties as of March 31, 2013;Millions of yenThousands of U.S. dollars2013Carrying ValueFair ValueCarrying ValueFair ValueAs of April 1, 2012Net ChangeAs of March 31, 2013As of March 31, 2013As of April 1, 2012Net ChangeAs of March 31, 2013As of March 31, 2013Rental properties¥2,622,741¥342,654¥2,965,396¥4,920,768$27,886,675$3,643,320$31,529,995$52,320,775Real estate including spaces used as rental properties232,419(4,854)227,564339,8002,417,228(51,614)2,419,6143,612,9711. The carrying value represents the acquisition cost less accumulated depreciation and accumulated impairment loss.2. The components of net change in carrying value included increases mainly due to the consolidation of Shinjuku 6-chome Tokutei Mokuteki Kaisya in the amount of ¥166,998 million ($ 1,775,634 thousand).3. The fair value is based on the following:(1) The fair value of real estate in Japan is calculated by the Company based mainly on the Real Estate Appraisal Standards.(2) The fair value of real estate in overseas countries is appraised principally by local real estate appraisers.