Illustration

Major Changes Resulting from Application of IFRS
(International Financial Reporting Standards)

The Company has decided to apply the International Financial Reporting Standards (IFRS) beginning in March 2017 for the purpose ofimplementing eﬀective management based on appropriate asset evaluation, applying business management that gives emphasis to the proﬁt of thecurrent period and enhancing accountability to domestic and overseas investors by improving the international comparability of ﬁnancial information.
The Group discloses earnings forecasts and ﬁnancial results, including the quantitative management objectives set forth in the Medium-term
Business Plan, which started in ﬁscal year 2017, on an IFRS basis.

Comparison between Japanese GAAP and IFRSJapanese GAAP (consolidated)

Sales (gross)

IFRS (consolidated)
RevenueSales(net + sales from purchaseon a no return basis ())△Point expenses

Point expenses included in SGAof the Department Store Businessare deducted from sales.

Cost of sales

Cost of sales

Gross proﬁt

Gross proﬁt

SGASGA

Point expenses△Amortization of goodwill△Amortization of retirement beneﬁt plans

Operating proﬁt

Greatly decrease because sales of theDepartment Store Business from purchaserecorded at the time of sales (), tenant sales of the Parco Businessand sales of Daimaru Kogyo fromare presented net.

Actuarial diﬀerences in goodwill andretirement beneﬁts are not amortized.

Other operating income/expenses

Gain on sales of non-current assets,
miscellaneous income, loss on disposal ofnon-current assets, miscellaneous expenses, etc.

Share of proﬁt/loss of equity method entities

Operating proﬁt

Interest income, dividend income,interest expenses, etc.

Ordinary proﬁt

Financial income/loss

Extraordinary gain/loss

Share of proﬁt/loss of equity method entities

Proﬁt attributable to parent company

Proﬁt attributable to parent company

Non-operating income/expenses
Financial income/loss

There is no "ordinary proﬁt"
under IFRS.
Corresponds to proﬁt underJapanese GAAP and is used in
the numerator of ROE

Reference indicator
In consolidated ﬁnancial statements, with the objective of maintaining comparability with previous periods,
the following reference indicators are presented.
Gross sales
Business proﬁt58

Of revenue under IFRS, mainly sales fromof the Department Store Business have been converted intogross amount and the net amount of sales of the Parco Business into tenant transaction amount (gross amount basis).
(Operating proﬁt under IFRS) ‒ (Other operating revenue, etc. under IFRS) + (Other operating expenses, etc. under IFRS)Consolidated P/L●Sales decrease by around 60% due to net presentation of sales fromand tenant sales and deduction of point expenses.

●Operating proﬁt decreases partly due to reclassiﬁcation of non-operating income/expenses and extraordinary gain/loss(e.g. loss on disposal of non-current assets).

Sales (Revenue) (Unit: ¥100 mn)
11,085

Operating proﬁt (Unit: ¥100 mn)
40△6,657[Breakdown]
Department Store △4,463
Parco△2,000
Daimaru Kogyo△156etc.

△97SalesfromTenantsales

194445

3△7213

Other
Amortization Derecognization operatingof amortization revenue
Otherofof retirement
operatinggoodwillbeneﬁts
expenses△13417

Other

4,525

Point
Reversal ofexpenses commonarea
charge of
Parco tenants,
etc.

Japanese GAAPFY ended
Feb 28, 2017

IFRS
FY ended
Feb 28, 2017

IFRS
FY ended
Feb 28, 2017

Japanese GAAPFY ended
Feb 28, 2017

Consolidated B/S●Assets (land, leasehold right and others) and shareholders equity (retained earnings) decrease due to recalculation of
the book value of land, etc. made at market value at the time of transition to IFRS. Liabilities decrease due to tax eﬀect.
(Unit: ¥100 mn)

10,501181
Liquidationof claims

△274

△356
△559

△370
Land

△99
LeaseholdConstruction
rightinprogress<Assets>
Japanese GAAP
Feb 28, 2017

194
Other

10,050

173
Other

28

181

Allowancefor paid Liquidation
Tax eﬀect,
leaveof claims
etc.

10,501Retainedearnings<Assets / Liabilities and shareholders equity>
IFRS
Feb 28, 2017

<Liabilities and net assets>
Japanese GAAP
Feb 28, 2017

Integrated Report 201759