Consolidated Financial Statements and Notes
For the Fiscal Year Ended March 31, 2022
(from April1, 2021 to March 31, 2022)

INDEX TO THE CONSOLIDATED FINANCIAL STATEMENTS
Independent Auditor’s Report...............................................................................................................................................

2

Consolidated Statement of Financial Position as of March 31, 2022....................................................................................

8

Consolidated Statement of Profit or Loss for the year ended March 31, 2022 .....................................................................

10

Consolidated Statement of Comprehensive Income for the year ended March 31, 2022 .....................................................

11

Consolidated Statement of Changes in Equity for the year ended March 31, 2022 ..............................................................

12

Consolidated Statement of Cash Flows for the year ended March 31, 2022.........................................................................

13

Notes to the Consolidated Financial Statements ...................................................................................................................

15

1

2

3

4

5

6

7

Consolidated Statement of Financial Position
Olympus Corporation and Consolidated Subsidiaries
As of March 31, 2022

2021

Millions of yen
2022

Cash and cash equivalents (Notes 7, 35)¥217,478¥302,572

Trade and other receivables (Notes 8, 35)

157,920

178,428ASSETS
Current assets

Other financial assets (Notes 10, 35)

10,268

10,269Inventories (Note 9)

158,895

167,368

Income taxes receivable

10,425

3,718

Other current assets (Note 11)24,97027,565

Subtotal

579,956

689,920

Assets held for sale (Note 12)
Total current assets

117

4,685

580,073694,605

Non-current assets
Property, plant and equipment (Note 13)239,166

247,112Goodwill (Note 14)

127,384

164,498

Intangible assets (Note 14)

104,810

120,361Retirement benefit asset (Note 23)

22,67725,975Investments accounted for using equity method

3,128

1,514

Trade and other receivables (Notes 8, 35)

24,577

27,857

Other financial assets (Notes 10, 35)

23,35016,152

Deferred tax assets (Note 37)

56,72057,783

Other non-current assets (Note 11)

1,568

2,142

Total non-current assets
Total assets
See accompanying notes to consolidated financial statements.

8603,380

663,394¥1,183,453¥1,357,999

2021

Millions of yen
2022

Trade and other payables (Notes 17, 35)¥69,870¥60,547

Bonds and borrowings (Notes 18, 35)

31,52952,281Other financial liabilities (Notes 19, 35)

21,87326,015

Income taxes payable

10,73634,353

Provisions (Note 20)

33,412

22,114

Other current liabilities (Note 21)

160,971

180,941

Total current liabilities

328,391376,251

Bonds and borrowings (Notes 18, 35)

323,735

333,846

Other financial liabilities (Notes 19, 35)

60,19764,600Retirement benefit liability (Note 23)

42,44640,001

Provisions (Note 20)

5,676

2,783

LIABILITIES AND EQUITY
Liabilities
Current liabilities

Non-current liabilities

Deferred tax liabilities (Note 37)

13,10313,087

Other non-current liabilities (Note 21)

14,425

16,069Total non-current liabilities

459,582

470,386

787,973846,637

Share capital (Note 24)

124,643

124,643

Capital surplus (Note 24)

90,83591,239Total liabilities
EquityTreasury shares (Note 24)(98,048)(45,589)

Other components of equity (Note 24)(1,347)

34,818Retained earnings (Note 24)278,243305,057

Total equity attributable to owners of parent

394,326

510,168

1,154

1,194

395,480

511,362¥1,183,453¥1,357,999

Non-controlling interests
Total equity
Total liabilities and equity

9Consolidated Statement of Profit or Loss
Olympus Corporation and Consolidated Subsidiaries
For the year ended March 31, 2022
2021

Millions of yen
2022

Revenue (Notes 6, 28)¥730,544¥868,867

Cost of sales (Notes 9, 13, 14, 23)

271,014

297,172

Gross profit

459,530

571,695

Selling, general and administrative expenses (Notes 13, 14, 23, 29)
Share of profit (loss) of investments accounted for using equity
method (Note 6)
Other income (Note 30)

357,032

405,399

595

1,492

8,479

14,425

Other expenses (Notes 16, 30)

29,58728,315

Operating profit (Note 6)

81,985

153,898

Continuing operations

Finance income (Note 31)

1,193

1,356

Finance costs (Note 31)

6,368

5,381

Profit before tax

76,810149,873

Income taxes (Note 37)

11,14033,903

Profit from continuing operations

65,670115,970

Loss from discontinued operations (Note 41)(52,681)–

Profit¥12,989¥115,970¥12,918¥115,742

¥71

¥228

¥12,989¥115,970

Discontinued operations

Profit attributable to:
Owners of parent
Non-controlling interests
Profit

Yen
2021

2022

Earnings per share
Basic earnings (loss) per share
Continuing operations (Note 32)¥51.03

Discontinued operations (Note 32)¥(40.98)¥–

Basic earnings per share (Note 32)¥10.05¥90.22

Continuing operations (Note 32)¥51.00¥90.17

Discontinued operations (Note 32)¥(40.96)¥–

Diluted earnings per share (Note 32)¥10.04¥90.17¥90.22

Diluted earnings (loss) per share

See accompanying notes to consolidated financial statements.

10Consolidated Statement of Comprehensive Income
Olympus Corporation and Consolidated Subsidiaries
For the year ended March 31, 2022

Profit2021

Millions of yen
2022¥12,989¥115,970

2,626

(686)

(926)

5,312

1,700

4,626

21,93842,407169(2,154)(55)

152

22,05240,405

Other comprehensive income
Items that will not be reclassified to profit or loss
Financial assets measured at fair value through othercomprehensive income (Note 33)
Remeasurements of defined benefit plans (Note 33)
Total of items that will not be reclassified to profit or loss (Note33)
Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations (Note33)
Cash flow hedges (Note 33)
Share of other comprehensive income (loss) of associates
accounted for using equity method (Note 33)
Total of items that may be reclassified to profit or loss (Note 33)
Total other comprehensive income

23,75245,031

Comprehensive income¥36,741¥161,001¥36,670¥160,773

Comprehensive income attributable to:
Owners of parent
Non-controlling interests

¥71

¥228

Comprehensive income¥36,741¥161,001

See accompanying notes to consolidated financial statements.

11

Consolidated Statement of Changes in Equity
Olympus Corporation and Consolidated Subsidiaries
For the year ended March 31, 2022
Millions of yen
Equity attributable to owners of parent

Balance at April 1, 2020

Balance at March 31, 2021

¥370,747¥1,211¥371,958

12,91871

12,989Other
componentsof equity

Retainedearnings

Total¥124,643¥91,157¥(98,135)¥(22,751)¥275,833
12,918Other comprehensive
incomePurchase of treasury
shares (Note 24)
Disposal of treasury
shares (Note 24)
Dividends from surplus(Note 26)
Transfer from othercomponents of equity toretained earnings
Share-based paymenttransactions (Note 27)
Equity transactions with
non-controlling interests
Total transactions withownersTotal equity

Share capital

TreasurysharesProfitComprehensive income

Noncontrollinginterests

Capitalsurplus23,752
–

–

(58)

–

23,752

23,752

12,91871

36,741

(2)

(2)

(2)

58

0

0

(12,856)(12,856)

2,348

–

–

271

271

(2,348)240

36,67023,752

31

(504)

(170)

(13,026)

(504)

42

(462)

–

(322)

87

(2,348)(10,508)(13,091)(128)(13,219)¥124,643¥90,835¥(98,048)¥(1,347)¥278,243¥394,326¥1,154¥395,480

Noncontrollinginterests

Total equity

Millions of yen
Equity attributable to owners of parent

Balance at April 1, 2021

Share capital

CapitalsurplusTreasuryshares¥124,643¥90,835¥(98,048)

Other
componentsof equity

Retainedearnings

Total¥(1,347)¥278,243¥394,326¥1,154¥395,480

115,742

115,742228

115,970

ProfitOther comprehensive
incomeComprehensive income
Purchase of treasury
shares (Note 24)
Disposal of treasury
shares (Note 24)
Cancellation of treasury
shares (Note 24)
Dividends from surplus(Note 26)
Transfer from retained
earnings to capital surplus
Transfer from othercomponents of equity toretained earnings
Share-based paymenttransactions (Note 27)
Total transactions withownersBalance at March 31, 2022
Note:

45,031–––45,03145,031
115,742

160,773

45,031
228

161,001(30,001)(30,001)(30,001)

(111)

115

4

4

(82,340)

82,340––82,366(8,866)(15,428)(15,428)(188)(15,616)(82,366)

–

–

8,866

–

–

494

494

489

5

–

404

52,459(8,866)(88,928)(44,931)(188)(45,119)¥124,643¥91,239¥(45,589)¥34,818¥305,057¥510,168¥1,194¥511,362

Details of Share capital, Capital surplus, Retained earnings, Treasury shares and Other components of equity are described in Note
24 “Share capital and other components of equity.”

12

Consolidated Statement of Cash Flows
Olympus Corporation and Consolidated Subsidiaries
For the year ended March 31, 2022

2021

Millions of yen
2022

Profit before tax¥76,810¥149,873

Loss before tax from discontinued operations (Note 41)(52,476)–

Depreciation and amortization

59,93764,615

Cash flows from operating activities

Loss (gain) on step acquisitions (Notes 30, 40)–(2,826)

842

3,396

Interest and dividend income(1,169)(1,184)

Interest expenses

3,992

4,865

Loss on sale of Imaging Business (Note 41)
Share of loss (profit) of investments accounted for using equity
methodDecrease (increase) in trade and other receivables

44,794–(595)(1,492)(9,718)(10,981)

Decrease (increase) in inventories

4,024(2,097)

Increase (decrease) in trade and other payables

7,361(8,827)

Increase (decrease) in retirement benefit liability

(987)

181

Impairment loss (reversal) (Note 16)

Decrease (increase) in retirement benefit asset

(718)

328

Increase (decrease) in provisions

6,826(15,372)

Other

13,847

1,516

152,770

181,995

817

1,017

SubtotalInterest received
Dividends received
Interest paid

352

167

(3,355)(4,286)

Income taxes paid

(26,462)(9,164)

Net cash provided by operating activities

124,122

169,729

Cash flows from investing activities
Payments into time deposits(40,002)(1)

Proceeds from withdrawal of time deposits

40,015–Purchase of property, plant and equipment(38,660)(41,688)

Proceeds from sales of property, plant and equipment
Purchase of intangible assets

1,621

4,485

(20,567)(20,083)

Payments for loans receivable

(466)

(129)

Collection of loans receivable

1,167

1,271

7,870

8,282

(27,830)–

Proceeds from sales of investments
Payments for sale of businesses (Note 34)
Proceeds from sale of businesses (Note 34)

2,121

–

(44,541)(21,837)

Proceeds from sale of subsidiaries (Note 34)

1,328

724

Purchase of investments in associates(1,069)–95(2,040)Net cash used in investing activities(118,918)(71,016)

Cash flows from financing activities
Increase (decrease) in short-term borrowings and commercial
papers (Note 34)
Repayments of lease liabilities (Note 34)(67,721)(5,454)(16,188)(17,691)

Payments for acquisition of subsidiaries (Notes 34, 40)

Other

13

Millions of yen
2022

2021
Proceeds from long-term borrowings (Note 34)

99,230–

Repayments of long-term borrowings (Note 34)(10,606)(26,246)

Dividends paid (Note 26)(12,856)(15,428)

Dividends paid to non-controlling interests

(170)

(188)

49,75756,143(2)(30,001)

(462)

–

(182)

(1,802)

Net cash provided by (used in) financing activities

40,800(40,667)

Effect of exchange rate changes on cash and cash equivalents

8,757

27,048Proceeds from issuance of bonds (Notes 18, 34)
Payments for purchase of treasury shares
Payments for acquisition of interests in subsidiaries from noncontrolling interests
Other

Net increase (decrease) in cash and cash equivalents

54,76185,094

Cash and cash equivalents at beginning of period

162,717

217,478

Cash and cash equivalents at end of period¥217,478¥302,572

See accompanying notes to consolidated financial statements.

14

Notes to the Consolidated Financial Statements
Olympus Corporation and Consolidated Subsidiaries
1. Reporting Entity
Olympus Corporation (hereinafter, the “Company”) is a corporation located in Japan. The address of its
registered head office is Hachioji-shi, Tokyo. The Company’s consolidated financial statements comprise theCompany, its subsidiaries (hereinafter, the “Olympus Group”) and interests in the Company’s associates.
The Olympus Group is principally engaged in the manufacturing and sales of endoscopic, therapeutic,
scientific and other products. Details of each business are as described in Note 6 “Segment information.”

2. Basis of Preparation(1) Compliance with IFRSThe accompanying consolidated financial statements of the Olympus Group have been prepared inaccordance with International Financial Reporting Standards issued by the International AccountingStandards Board (hereinafter, “IFRS”). Since the requirements for a “Specified Company of DesignatedInternational Accounting Standards” set forth in Article 1-2 of the “Ordinance on Terminology, Forms,
and Preparation Methods of Consolidated Financial Statements” are satisfied, the Olympus Group
adopts the provisions of Article 93 of the same Ordinance.
The Japanese language consolidated financial statements for the fiscal year ended March 31, 2022 wereapproved by Yasuo Takeuchi, Director, Representative Executive Officer, President and CEO, andChikashi Takeda, Executive Officer CFO, on June 21, 2022. These English language consolidated
financial statements were approved by Yasuo Takeuchi, Director, Representative Executive Officer,
President and CEO, and Chikashi Takeda, Executive Officer CFO subsequently on August 9, 2022.
Refer to (Disposal of treasury shares) of Note 44 for details of material event which occurred
subsequent to the date of the Japanese language consolidated financial statements, which required
additional disclosures in these English language consolidated financial statements.
(2) Basis of measurement
The Olympus Group’s consolidated financial statements have been prepared on a historical cost basis,
except for certain items, such as financial instruments measured at fair value as described in Note 3“Significant accounting policies.”(3) Functional currency and presentation currency
The Olympus Group’s consolidated financial statements are presented in Japanese yen, which is also theCompany’s functional currency, and figures are rounded off to the nearest million yen.
3. Significant Accounting Policies(1) Basis of consolidation
1) Subsidiaries
A subsidiary is an entity that is controlled by the Olympus Group. The Olympus Group considers
that it has control over an entity when it is exposed or has rights, to variable returns arising from its
involvement with the entity, while having the ability to affect those returns through the exercise of
its power over the entity. Financial statements of a subsidiary are consolidated from the date on
which the Olympus Group obtains control over such subsidiary, until the date on which the control
is lost.
All intergroup balances, transactions, unrealized profit or loss arising from intergroup transactions
are eliminated on consolidation.
Comprehensive income of the subsidiaries is attributed to the owners of parent and to the noncontrolling interests even if this results in the non-controlling interests having a deficit balance.

15Changes in the Company’s ownership interests in subsidiaries that do not result in a loss of control
are accounted for as equity transactions. Any difference between the adjustment to the noncontrolling interests and the fair value of the consideration is recognized directly in equity
attributable to owners of parent.
If the Olympus Group loses control over a subsidiary, any resulting gains or losses shall berecognized in profit or loss.
2) Associates
An associate is an entity over which the Olympus Group has significant influence on its financial
and operating policies but does not have control or joint control. Investments in associates areaccounted for by the equity method from the date the Olympus Group gains significant influence
until the date it loses that influence.
Investments in associates include goodwill recognized on acquisition.
(2) Business combinations
Business combinations are accounted for by using the acquisition method.
If the initial accounting for a business combination is incomplete by the end of the reporting period inwhich a business combination occurs, the items for which the accounting treatment is incomplete aremeasured at provisional amounts, and adjustments to the provisional amounts are finalized during themeasurement period within one year from the acquisition date.
Consideration for an acquisition is measured at the sum of the acquisition-date fair value of the assets
transferred, liabilities assumed, and equity instruments issued by the Olympus Group in exchange forthe control over the acquiree. Consideration for an acquisition includes contingent consideration. If
consideration for an acquisition exceeds the fair value of identifiable assets and liabilities, such excess isrecognized as goodwill in the consolidated statement of financial position. If, conversely, theconsideration is less than the fair value, the difference shall be directly recognized in profit or loss in the
consolidated statement of profit or loss. In addition, acquisition-related costs incurred shall berecognized in profit or loss.
For a business combination that is achieved in stages, interest in the acquiree that was previously heldby the Olympus Group is remeasured at fair value at the date of acquisition of control, and the resulting
gains or losses are recognized in profit or loss.
(3) Foreign currency translations
1) Foreign currency transactions
Foreign currency transactions are translated into the functional currency of each Group company
using the exchange rate at the transaction date or an exchange rate that approximates it. At the endof each reporting period, monetary assets and liabilities denominated in foreign currencies aretranslated into functional currencies using the exchange rate at the end of the reporting period. Nonmonetary assets and liabilities denominated in foreign currencies measured at fair value aretranslated into functional currencies using the exchange rate at the date when such fair value wasmeasured. Translation differences arising from translations and settlements are recognized in profit
or loss for the period; provided, however, that translation differences arising from financial assets
measured at fair value through other comprehensive income are recognized in other comprehensive
income.
2) Financial statements of foreign operations
Assets and liabilities of foreign operations are translated into Japanese yen using the exchange rates
at the end of the reporting period. Income and expenses are translated into Japanese yen using the
average exchange rates for the fiscal year unless exchange rates significantly fluctuate during theperiod. Exchange differences on translation of foreign operations are recognized in othercomprehensive income. Such translation differences of foreign operations are recognized in profit orloss for the period in which the foreign operations concerned are disposed of.

16

(4) Financial instruments
1) Financial assets(i)

Initial recognition and measurement
The Olympus Group initially recognizes trade and other receivables on the date when they are
incurred, and other financial assets at the transaction date when the Olympus Group becomes aparty to the contract for the financial assets. At the initial recognition, financial assets aremeasured at fair value plus transaction costs, except for those measured at fair value throughprofit or loss.

(ii) Classification and subsequent measurement
The Olympus Group classifies the financial assets at initial recognition as financial assets
measured at amortized cost, financial assets measured at fair value through othercomprehensive income or financial assets measured at fair value through profit or loss.
(Financial assets measured at amortized cost)
Financial assets are classified into financial assets measured at amortized cost, on the condition
that they meet both of the following criteria:

 Financial assets are held based on the business model to hold financial assets for the purposeof collecting contractual cash flows

 Contractual terms associated with financial assets give rise to cash flows on specified dates,consisting only of payment of the principal and interest on the principal balance

Financial assets measured at amortized cost are measured at amortized cost using the effective
interest method subsequent to the initial recognition.
(Financial assets measured at fair value through other comprehensive income)Equity instruments such as shares held mainly for the purpose of maintaining or strengthening
business relationships with investees are designated at initial recognition as financial assets
measured at fair value through other comprehensive income.
Any change in fair value of equity financial assets measured at fair value through othercomprehensive income is recognized in other comprehensive income subsequent to the initialrecognition. If such assets are derecognized or the fair value decreases significantly,
accumulated other comprehensive income is directly transferred to retained earnings.
Dividends from such financial assets are recognized in profit or loss.
(Financial assets measured at fair value through profit or loss)
Financial assets other than above are classified as financial assets measured at fair value
through profit or loss.
Changes in fair value of financial assets measured at fair value through profit or loss arerecognized in profit or loss subsequent to the initial recognition.
(iii) Impairment of financial assets
For financial assets measured at amortized cost, the Olympus Group recognizes allowance for
doubtful accounts for expected credit losses.
The Olympus Group evaluates at the end of each reporting period whether there is a significant
increase in credit risk of financial assets since initial recognition. When there is no significant
increase in the credit risk since initial recognition, the amount equal to expected credit losses
for 12 months are recognized as allowance for doubtful accounts. When there is a significant
increase in credit risk since initial recognition, the amount equal to expected credit losses forthe remaining life of the financial assets are recognized as allowance for doubtful accounts.

17

For trade receivables, contract assets and lease receivables, allowance for doubtful accounts arealways recognized at the amount equal to expected credit losses for the remaining life of theassets.
With regard to financial assets on which impairment losses were previously recognized, when
the amount of impairment losses decreased due to any event that occurred after the initialrecognition of the impairment losses, the previously recognized impairment losses are reversed
and recognized in profit or loss.
(iv) Derecognition
A financial asset is derecognized when the contractual rights to the cash flows from thefinancial asset expire or when the contractual rights to receive the cash flows from the financial
asset are assigned and substantially all the risks and rewards of ownership are transferred.
2) Financial liabilities(i)

Initial recognition and measurement
The Olympus Group initially recognizes financial liabilities at the transaction date when the
Olympus Group becomes a party to the contract for the financial liabilities. All financial
liabilities are measured at fair value at initial recognition, whereas financial liabilities measured
at amortized cost are measured at the amount less directly attributable transaction costs.

(ii) Classification and subsequent measurement
Financial liabilities are classified into financial liabilities measured at fair value through profit
or loss or financial liabilities measured at amortized cost at initial recognition.
Changes in fair value of financial liabilities measured at fair value through profit or loss arerecognized in profit or loss subsequent to the initial recognition.
Financial liabilities measured at amortized cost are measured at amortized cost subsequent to
the initial recognition, by using the effective interest method. Amortization by the effective
interest method, as well as gains and losses associated with derecognition shall be recognizedin profit or loss.
(iii) Derecognition
The Olympus Group derecognizes a financial liability when it is extinguished, namely when
the obligation specified in the contract is discharged, cancelled or expires.
3) Offsetting financial instruments
Financial assets and liabilities are offset, with the net amount presented in the consolidated
statement of financial position, only if the Olympus Group holds a legal right to offset therecognized amounts, and there is an intention to settle on a net basis or to realize the asset and settle
the liability simultaneously.
4) Derivatives and hedge accounting
The Olympus Group uses derivatives such as forward exchange contracts, interest rate swaps andinterest rate currency swap contracts, as hedging instruments against foreign exchange risk andinterest rate risk. These derivatives are classified as financial assets measured at fair value throughprofit or loss and financial liabilities measured at fair value through profit or loss. Derivatives thatmeet criteria for hedge accounting are designated as hedging instruments, and hedge accounting isapplied.
For the application of hedge accounting, at the inception of the hedge the Olympus Group formallydesignates and documents the hedging relationship as well as the risk management objectives andstrategies. Such documentation includes the hedging instruments, hedged items, the nature of therisks to be hedged and the method for evaluating the hedging effectiveness. The Olympus Group
continually evaluates whether the hedging relationship is effective prospectively.
The Olympus Group applies cash flow hedges to interest rate-related and interest rate currencyrelated derivative transactions that meet the criteria for hedge accounting.
Of changes in fair value associated with hedging instruments in cash flow hedges, the effective
portion is recognized in other comprehensive income, and recognized in other components of equity

18

until the hedged transaction is executed and recognized in profit or loss. The ineffective portion isrecognized in profit or loss.
The amount associated with hedging instruments recognized in other components of equity istransferred to profit or loss, at the point in time when the hedged transaction affects profit or loss. If
a hedged item results in the recognition of a non-financial asset or a non-financial liability, theassociated amount recognized in other components of equity is accounted for as adjustment to theinitial book value of the non-financial asset or the non-financial liability.
When a forecast transaction is no longer expected to occur, hedge accounting is discontinued, andany related cumulative gain or loss that has been recognized in other components of equity istransferred to profit or loss. Even when hedge accounting was discontinued, if these future cash
flows are expected to occur, the amount that had been recognized in other components of equity
remain until future cash flows occur.
The Olympus Group does not use fair value hedges or net investment hedges in foreign operations.
(5) Cash and cash equivalents
Cash and cash equivalents comprise cash, readily available deposits, and short-term, highly liquid
investments having maturities of three months or less of the date of acquisition that are readily
convertible to known amounts of cash and which are subject to an insignificant risk of changes in value.
(6) Inventories
Inventories are measured at the lower of cost or net realizable value. The costs of inventories arecalculated principally by using the weighted average method, which include purchase cost, processing
cost, and other costs incurred in bringing inventories to their present location and condition. Net
realizable value is determined at the estimated selling price in the ordinary course of business lessestimated cost required up to the completion of the process and estimated selling expenses.
(7) Property, plant and equipment
Property, plant and equipment is measured by using the cost model and is stated at cost lessaccumulated depreciation and accumulated impairment losses.
The costs of property, plant and equipment include any costs directly attributable to the acquisition ofassets, dismantlement, removal and restoration costs as well as borrowing costs eligible forcapitalization.
Except for assets that are not depreciated such as land, each asset is depreciated over its estimated usefullife on a straight-line basis. The estimated useful lives of major asset items are as follows (excluding
right-of-use assets):

 Buildings and structures:

2 to 50 years Machinery and vehicles:

2 to 10 years

 Tools, furniture and fixtures:

2 to 15 years

The estimated useful lives, residual values and depreciation methods are subject to review at the end ofeach reporting period, and any change is prospectively applied as a change in an accounting estimate.
(8) Goodwill
Goodwill is carried at cost less any accumulated impairment losses.
Goodwill is not amortized and is tested for impairment in each period or whenever there is an indicationof impairment. Impairment loss of goodwill is recognized in profit or loss.
Goodwill measurements at initial recognition are presented in “(2) Business combinations.”(9) Intangible assets
Intangible assets are measured by using the cost model and are carried at cost less accumulated
amortization and accumulated impairment losses.
The costs of intangible assets acquired separately include any costs directly attributable to theacquisition of the assets. Intangible assets acquired through business combinations are measured at fairvalue at the acquisition date. With regard to internally generated intangible assets, of the costs incurred19during the development phase, the following are eligible for capitalization and recognized as
development costs, whereas such costs that are not eligible are recognized as expenses when incurred.

 The technical feasibility of completing the intangible asset so that it will be available for use or sale.
 The Company’s intention to complete the intangible asset and use or sell it.
 The Company’s ability to use or sell the intangible asset.
 The intangible asset is likely to create future economic benefits.
 The availability of adequate technical, financial and other resources to complete the development
and to use or sell the intangible asset.

 The Company’s ability to measure reliably the expenditure attributable to the intangible asset during
its development.

Except for intangible assets with indefinite useful lives, each asset is amortized over the estimateduseful life on a straight-line basis. The estimated useful lives of major asset items are as follows: Capitalized development costs:

4 to 8 years

 Software:

3 to 5 years

 Other:

3 to 15 years

The estimated useful lives and amortization methods are reviewed at the end of each reporting period,
and any change is prospectively applied as a change in an accounting estimate.
Intangible assets with indefinite useful lives and intangible assets not yet available for use are notamortized and are tested for impairment in each period or whenever there is an indication of
impairment.
(10) Leases
1) Leases as lessee
Instead of classifying leases as finance leases and operating leases, a single accounting model has
been introduced, in principle, and for all leases, right-of-use assets representing the rights to use theunderlying asset and lease liabilities representing the lease payment obligations are recognized.
Lease liabilities are measured at present value of total lease payments not paid at the leasecommencement date. For right-of-use assets, the initial measurements are the initial measurementsof the lease liabilities, adjusting for initial direct costs, prepaid lease payments, and restoration costs.
Right-of-use assets are depreciated on a straight-line basis over the shorter of their estimated useful
lives and lease terms.
Lease terms are based on the non-cancellable period, and the reasonable option terms are estimatedand adjusted.
Furthermore, lease payments are categorized into amounts equivalent to the principal and interest oflease liabilities, and the amount equivalent to the interest apportioned to each fiscal period is
calculated so as to achieve a constant rate of interest on the lease liabilities balance at each periodend, and recognized in profit or loss.
If the right to control the use of the assets identified in contract is transferred in exchange forconsideration for a certain period, it is determined at the inception of the contract whether thecontract is, or contains, a lease.
Furthermore, for short-term leases and leases for which the underlying asset is of low value, theright-of-use assets and lease liabilities are not recognized and lease payments are recognized as
expense.
Moreover, the right-of-use assets and lease liabilities are included in “Property, plant andequipment” and “Other financial liabilities,” respectively, in the consolidated statement of financial
position.

202) Leases as lessor
Lease transactions involving the transfer of substantially all the risks and rewards associated withthe ownership of the leased assets are classified as finance leases, while other types of leasetransactions are classified as operating leases.
In finance lease transactions, the present value of gross investments in the lease is recognized asrevenue at the commencement of the lease term, and the corresponding amount is recognized aslease receivables. Unearned finance income is apportioned at a constant rate on the net investment
over the lease term and recognized as revenue in the period to which it is attributable.
In operating lease transactions, the relevant leased properties are recognized in the consolidated
statement of financial position, and lease payments receivable are recognized as revenue over thelease terms on a straight-line basis.
(11) Impairment of non-financial assets
For the carrying amount of non-financial assets (excluding inventories, deferred tax assets, retirement
benefit assets and non-current assets held for sale), the Olympus Group assesses at the end of eachreporting period whether there is an indication of impairment. If any such indication exists, animpairment test is performed. However, goodwill, intangible assets with indefinite useful lives andintangible assets not yet available for use are tested for impairment in each period or whenever there isan indication of impairment.
Assets that are not individually tested in impairment testing are integrated into the smallest cashgenerating unit that generates cash inflows largely independent of cash inflows from other assets orasset groups. Corporate assets do not generate independent cash inflows. Therefore, if there is anindication that corporate assets may be impaired, the impairment test is performed based on therecoverable amount of the cash-generating unit to which the corporate assets belong.
The recoverable amount of an asset or cash-generating unit is the higher of its value in use and fairvalue less cost of disposal. In calculating value in use, estimated future cash flows are discounted to thepresent value using the pretax discount rate reflecting the time value of money and risks specific to theasset.
Impairment losses are recognized when the carrying amount of an asset or cash-generating unit exceeds
its recoverable amount. Impairment losses recognized in association with a cash-generating unit arerecognized by first reducing the carrying amount of any allocated goodwill and then are allocated toother assets of the cash-generating unit on a pro-rata basis based on the carrying amount of each asset.
When there is an indication of reversal in respect of impairment losses recognized in prior periods andthe recoverable amount of the asset or cash-generating unit exceeds its carrying amount, impairment
losses are reversed. The carrying amount after reversal of impairment losses does not exceed thecarrying amount that would have been determined, net of depreciation or amortization had no
impairment loss been recognized for the asset. Impairment losses associated with goodwill are notreversed.
(12) Non-current assets and discontinued operations held for saleNon-current assets or disposal groups whose carrying amount is expected to be recovered principally
through a sale transaction rather than through continuing use are classified as non-current assets or
disposal groups held for sale if it is highly probable that the assets or disposal groups will be sold within
one year and they are available for immediate sale in their present condition, and the Olympus Group’s
management is committed to a plan to sell.
Non-current assets are not depreciated or amortized while they are classified as held for sale or are partof a disposal group classified as held for sale. Non-current assets or disposal groups classified as held
for sale are measured at the lower of the book value and fair value less costs to sell.
When businesses that are considered as individual units on which management decisions are made havealready been sold or fulfill the requirements to be classified as being held for sale, the Olympus Group
classifies those businesses as discontinued operations.
(13) Provisions
Provisions are recognized when the Olympus Group has present obligations as a result of past events, it
is highly probable that outflows of economic resources will be required to settle the obligations, andreliable estimates of the obligations can be made.

21

Where time value of money is material, provisions are measured by discounting estimated future cash
flows into present value by using the interest rate reflecting the time value of money as well as the risks
inherent to the associated liabilities.
(14) Contingent liabilities
With regard to liabilities held by the Olympus Group as of the end of the reporting period that may be
incurred, when it cannot be confirmed whether or not those are liabilities as of the end of the reporting
period, or when the liabilities do not meet criteria for recognition of provisions, information on suchliabilities is provided in the corresponding note on contingent liabilities, unless it is believed that thepossibility of an outflow of economic resources by performance of the liabilities is remote at the end of
the reporting period.
(15) Government grants
Government grants are recognized at fair value, if there is reasonable assurance that the Olympus Groupwill comply with the conditions attached to them and that will receive the grants. Government grants
associated with expenses are recognized in revenue over the period when the expenses, which the grant
is intended to compensate, are incurred. Government grants related to the acquisition of assets arerecognized as deferred income and then recognized in profit or loss over the expected useful life of therelevant asset on a systematic basis.
(16) Employee benefits
1) Post-employment benefits
The Olympus Group adopts defined benefit pension plans and defined contribution pension plans.
The Olympus Group calculates the present value of defined benefit obligations and associatedcurrent service cost as well as past service cost by using the projected unit credit method.
The discount rate used for discounting to the present value of defined benefit obligations isdetermined by reference to market yields on high quality corporate bonds in a currency and withmaturities consistent with those of the post-employment benefit obligations.
Asset or liability associated with a defined benefit plan is calculated by subtracting the fair value ofplan assets from the present value of defined benefit obligations of each plan.
Any difference due to remeasurement arising from defined benefit pension plans is recognized inother comprehensive income in the period when the difference arose, and immediately transferred toretained earnings. Past service costs are expensed as incurred.
Contributions to defined contribution pension plans are recognized as expenses according to theperiod during which employees rendered the relevant services.
2) Short-term employee benefits
Short-term employee benefits are recognized as expenses in the period in which the employee
renders the related service without discounting. When the Olympus Group has present legal orconstructive obligations to make payments resulting from past services rendered by the employees
and the amount can be estimated reliably, the amount estimated to be paid is recognized as aliability.
3) Other long-term employee benefits
The Olympus Group has a special leave system and incentive payment plans according to a specificnumber of service years as long-term employee benefits other than pension plans. The amount of
obligations to other long-term employee benefits is recognized as a liability at the amount calculatedby discounting the estimated amount of future benefits earned in exchange for service that
employees provided in prior fiscal years and the current fiscal year to the present value.
(17) Equity
Common shares are recognized in share capital at their issue price. Expenses incidental to issuance ofcommon shares are deducted at the amount net of tax effect from equity.
Treasury shares are recognized at cost and deducted from equity. No gain or loss is recognizedassociated with the purchase, sale or retirement of treasury shares of the Company. Any difference
between the book value and the consideration received from the sale is recognized in equity.

22

(18) Share-based payments
The Company has the following equity-settled share option plans as incentive plans for its directors,
executive officers, and corporate officers.
Stock option plans
Stock options are measured at fair value at the grant date and recognized as expenses over thevesting periods with corresponding increases to equity and taking into account the estimated numberof options to be vested. The fair value of stock options is calculated using the Black-Scholes model.
Share-Based Remuneration Plan
With the aim of enhancing awareness toward contributing to sustainable improvement of corporate
value, as well as further enhancing value sharing with shareholders, the Company has introduced asubsequent grant-type restricted share-based remuneration plan for directors. The Company has also
introduced a restricted share-based remuneration plan, performance-linked share-based remuneration
plan, and subsequent grant-type restricted share-based remuneration plan for executive officers andcorporate officers. The remuneration calculated by the reference the fair value of shares of theCompany is recognized in profit or loss as an expense and the corresponding amount is recognized
as an increase in equity.
(19) Revenue
With regard to contracts with customers, the Olympus Group recognizes revenue by applying thefollowing steps (except for interest and dividend income, etc., under IFRS 9 “Financial instruments”
and lease payments receivable under IFRS 16 “Leases”).
Step 1: Identify the contract with the customer
Step 2: Identify the performance obligations in the contract
Step 3: Determine the transaction price
Step 4: Allocate the transaction price to the performance obligations in the contract
Step 5: Recognize revenue when (or as) the entity satisfies a performance obligation
The Olympus Group is principally engaged in the manufacture and sales of endoscopic, therapeutic,
scientific and other products. With regard to the sales of these products, the Olympus Group mainly
recognizes revenue at the time of delivery of a product since in many cases it considers that thecustomer obtains control over the product and performance obligations are satisfied at the time ofdelivery of the product.
Revenue is measured at the amount of promised consideration in contracts with customers lessdiscounts and rebates, and reduced by the amount of sales returns.
(20) Finance income and finance costs
Finance income mainly comprises interest income, dividend income, exchange gains and changes in fairvalue of financial assets and liabilities measured at fair value through profit or loss. Interest income isrecognized as incurred using the effective interest method. Dividend income is recognized when theright to receive payment is established.
Finance costs mainly comprise interest expenses, interest on bonds, exchange losses and changes in fairvalue of financial assets and liabilities measured at fair value through profit or loss. Interest expenses
and interest on bonds are recognized as incurred using the effective interest method.
(21) Income taxes
Income tax costs comprise current taxes and deferred taxes. These taxes are recognized in profit or loss,
except in cases where they arise from items that are recognized directly in other comprehensive income
or equity, and where they arise from business combinations.
1) Current taxes
Current taxes are measured at an expected amount of taxes to be paid to or refunded from the tax
authorities. The tax rates and tax laws used to determine the amount of taxes are tax rates and tax lawsthat have been enacted, or substantially enacted by the end of the reporting period.

23With regard to uncertain tax positions of income taxes, the Olympus Group recognizes thereasonably estimated amount as assets or liabilities, when it is more likely than not, based oninterpretations for the purpose of tax laws, that the tax positions will be sustained.
2) Deferred taxes
Deferred taxes are recognized for temporary differences, which are differences between the tax
bases of assets and liabilities and their carrying amounts for accounting purposes at the end of thereporting period, tax losses carried forward and tax credits carried forward.
Deferred tax assets or liabilities are not recognized for the following cases: Taxable temporary differences arising from the initial recognition of goodwill
 Temporary differences on the initial recognition of assets or liabilities arising from a transaction
other than a business combination that affects neither accounting profit nor taxable profit (taxloss).

 Taxable temporary differences associated with investments in subsidiaries and associates when

the Olympus Group is able to control the timing of the reversal of the temporary difference and it
is probable that the temporary difference will not reverse in the foreseeable future.

 Deductible temporary differences associated with investments in subsidiaries and associates

when it is probable that the temporary difference will not reverse in the foreseeable future, or
when it is not probable that there will be sufficient taxable profits against which the deductible
temporary differences can be utilized.

Deferred tax assets are recognized to the extent that it is expected that taxable profits will beavailable against which deductible temporary differences, unused tax credits carried forward and tax
losses carried forward can be utilized. In principle, deferred tax liabilities are recognized for all
taxable temporary differences.
In recognizing deferred tax assets, the Olympus Group assesses the probability that deductible
temporary differences or tax losses carried forward can be utilized against future taxable profits. In
assessing the recoverability of deferred tax assets, the scheduled reversal of deferred tax liabilities,
projected taxable profits and tax planning are taken into account.
Deferred tax assets and liabilities are measured based on tax rates and tax laws that have beenenacted, or substantially enacted by the end of the reporting period.
Deferred tax assets and liabilities are offset if the Olympus Group has a legally enforceable right tooffset current tax assets against current tax liabilities, and they are related to income taxes levied by
the same taxation authority on the same taxable entity, or different taxable entities that intend either
to settle on a net basis or to realize the tax asset or settle the liability simultaneously.
The Company and some of its subsidiaries have adopted the consolidated tax system.
(22) Earnings per share
Basic earnings per share are calculated by dividing profit attributable to owners of parent by theweighted-average number of common shares outstanding, subject to the adjustment to the number oftreasury shares for the corresponding period.
Diluted earnings per share are calculated reflecting adjustments for the effect of all potential dilutive
common shares.

24

4. Significant Accounting Estimates and Associated Judgments
In preparing IFRS-based consolidated financial statements, the management is required to make judgments,
estimates and assumptions that affect the adoption of accounting policies and the amounts of assets,
liabilities, revenues and expenses. Actual results may differ from such estimates.
The estimates and underlying assumptions are reviewed on an ongoing basis and the effect is recognized in
the period in which the estimates are revised and in future periods.
Information regarding the judgments made by the Olympus Group that may have material impacts on the
consolidated financial statements is as follows: Scope of subsidiaries and associates (Note 3 “Significant accounting policies (1) Basis of consolidation”)
 Accounting for arrangements containing leases (Note 3 “Significant accounting policies (10) Leases,” Note
36 “Leases”)

 Revenue (Note 3 “Significant accounting policies (19) Revenue,” Note 28 “Revenue”)
Information on accounting estimates and assumptions that may have material impacts on the consolidated
financial statements is as follows: Evaluation of inventories (Note 3 “Significant accounting policies (6) Inventories,” Note 9 “Inventories”)
Inventories are measured at cost. However, if net realizable value falls below the cost as of the end of thereporting period, inventories are measured at the net realizable value and any difference is recognized incost of sales in principle. For inventories that are not used in the normal operating cycle process andremain unused, the net realizable value is calculated reflecting future demand and market trends. If the net
realizable value decreased significantly due to a worse than expected market environment, losses may be
incurred.

 Impairment of non-financial assets (Note 3 “Significant accounting policies (11) Impairment of nonfinancial assets,” Note 16 “Impairment of non-financial assets”)

The Olympus Group performs impairment tests on property, plant and equipment, goodwill, andintangible assets in accordance with the accounting treatment described in Note 3 “Significant accounting
policies.” Assumptions concerning future cash flows, discount rates, etc., are set to calculate recoverable
amounts in testing for impairment. Although these assumptions are determined based on management’s
best estimates and judgment, they may be affected as a result of changes in uncertain future economic
conditions. Should those assumptions require change, the consolidated financial statements may besignificantly affected.

 Measurement of provisions (Note 3 “Significant accounting policies (13) Provisions,” Note 20“Provisions”)

Provisions are measured based on best estimates of expenditures required to settle obligations in the
future at the end of the fiscal period. The amount of expenditures required to settle obligations in the
future is calculated, comprehensively taking into account future possible outcomes. Assumptions used in
the measurement of these provisions may be affected by changes in uncertain future economic conditions,and have risk of causing a material adjustment to the measurement of provisions in the future.

 Contingent liabilities (Note 3 “Significant accounting policies (14) Contingent liabilities,” Note 42“Contingent liabilities”)

Contingent liabilities are disclosed whenever any item exists that may have significant impacts on futurebusinesses after all evidence available on the reporting date is examined and the probability and impact interms of the amount are taken into consideration.

 Measurement of defined benefit obligation (Note 3 “Significant accounting policies (16) Employee
benefits,” Note 23 “Employee benefits”)

For defined benefit corporate pension plans, the net amount of defined benefit obligations and fair valueof plan assets is recognized as a liability or asset. Defined benefit obligations are determined based on
actuarial calculation, and assumptions for actuarial calculation include estimates of the discount rate,
retirement rate, mortality, salary increase rate and others. These assumptions are determined by25

comprehensively assessing various available information such as the market trend of interest rate
fluctuations. The assumptions for actuarial calculation may be affected by changes in uncertain future
economic circumstances or social situations, etc., and have risk of causing a material adjustment to themeasurement of defined benefit obligations in the future.

 Recoverability of deferred tax assets (Note 3 “Significant accounting policies (21) Income taxes,” Note
37 “Income taxes”)

Deferred tax assets are recognized to the extent that it is likely that taxable profit will be available against
which the deductible temporary differences can be utilized. In determining the probability that taxable
profit will be available, the Olympus Group estimates the timing and the amount of the taxable profit
based on the business plan. Although these estimates are management’s best estimates, the actual results
may differ as a result of changes in uncertain future economic conditions.

 Impact of COVID-19
Although the impact of the spread of COVID-19 differs by region, it is currently expected to continue
diminishing overall as vaccinations become available worldwide, and we have assumed that theCompany’s sales activities will also begin to normalize. Based on this assumption, the Olympus Groupmakes accounting estimates; in addition to impairment tests on property, plant and equipment, andintangible assets including goodwill, and assessments of recoverability of deferred tax assets, etc.
5. New or Amended Standards or Interpretations Not Yet Adopted
There were no significant new or amended standards and interpretations issued by the date of approval of theconsolidated financial statements not yet early adopted by the Olympus Group.

26

6. Segment Information(1) Overview of reportable segments
The reportable segments of the Olympus Group are components of the Company for which separate
financial information is available. These segments are regularly evaluated in determining the allocationof management resources and in assessing the performance.
The Olympus Group has established strategies and engages in business activities for the products andservices based on four segments: “Endoscopic Solutions,” “Therapeutic Solutions,” “Scientific
Solutions,” and “Others.” Reportable segments are determined in line with these segments.
From the three months ended June 30, 2021, bronchoscopes, which were previously included in the
Endoscopic solutions segment, were transferred to the Therapeutic solutions segment, for the purpose ofstrengthening business in the respiratory area. Segment information for the fiscal year ended March 31,
2021, has been reclassified and restated based on the new reporting segment classification.
Due to the transfer of the Imaging Business to OJ Holdings, Ltd., a special purpose company
established by Japan Industrial Partners, Inc. in the fiscal year ended March 31, 2021, the profit (loss) of
the Imaging Business is presented in discontinued operations.
For details on discontinued operations, please see Note 41 “Discontinued operations.”
The principal products and services of each reportable segment are as follows.
Reportable Segment
Endoscopic Solutions Business
Therapeutic Solutions Business
Scientific Solutions Business
OthersPrincipal products and services
Gastrointestinal endoscopes, surgical endoscopes, medical service
Gastroenterology devices, urology products, respiratory products, energy devices, ENT products,
gynecology products
Biological microscopes, industrial microscopes, industrial endoscopes, non-destructive testing
equipment, X-ray fluorescence (XRF) analyzer
Biomedical materials, orthopedic equipment(2) Revenue, operating profit or loss, finance income, finance costs and other items by reportable segment
Revenue, operating profit or loss, finance income, finance costs and other items of each reportablesegment of the Olympus Group were as follows. The accounting treatment of each reportable segment
is the same as described in Note 3 “Significant accounting policies.”
Millions of yen
For the year ended March 31, 2021
Reportable Segment

Adjustment(Notes 2, 3,
4, 5)

Amount on
consolidated
financialstatements¥730,544¥–¥730,544

166

170

(170)

–

9,343

730,714(170)

730,544

133,605(51,620)

81,985Endoscopic
Solutions

Therapeutic
Solutions

Scientific
Solutions

OthersTotal

Revenue
Revenue from outside
customers
Intersegment revenue (Note 1)¥393,664¥231,842¥95,861¥9,177

–

–

4

Total

393,664

231,842

95,86598,771

30,567

4,949

(682)

Operating profit (loss)
Finance income
Finance costs

1,193
6,368

Profit before tax

76,810

Other items
Share of profit (loss) ofinvestments accounted forusing equity method
Depreciation and amortization
Impairment losses (nonfinancial assets)
Segment assets
Investments accounted forusing equity method
Capital expenditures

656

(61)

–

–

595

–

595

29,421

14,504

7,313

923

52,161

7,398

59,559

70

414

–

–

484

358

842

451,254

343,460

97,08820,517912,319

271,134

1,183,453

1,040

2,088

–

–

3,128

–

3,128

¥50,878¥24,366¥9,098¥928¥85,270¥13,665¥98,935

27

Notes: 1.

Intersegment revenue is based on actual market prices.

2.

Adjustment for operating profit (loss) represents corporate expenses that consist of elimination of transactions among
segments as well as general and administrative expenses and fundamental research expenses, etc., that are not attributableto reportable segments.

3.

Adjustment for segment assets represents corporate assets that are not attributable to reportable segments.

4.

Adjustment for depreciation and amortization represents corporate depreciation and amortization that are not attributableto reportable segments.

5.

Adjustment for capital expenditures represents the increase in corporate assets that is not attributable to reportablesegments.
Millions of yen
For the year ended March 31, 2022
Reportable Segment

Adjustment(Notes 2, 3,
4, 5)

Amount on
consolidated
financialstatements¥868,867¥–¥868,867

373

420

(420)

–

13,002869,287(420)

868,867

209,532(55,634)

153,898

Endoscopic
Solutions

Therapeutic
Solutions

Scientific
Solutions

OthersTotal

Revenue
Revenue from outside
customers
Intersegment revenue (Note 1)¥461,547¥275,586¥119,105¥12,629

–

–

47

Total

461,547

275,586

119,152

133,204

60,826

17,526(2,024)

Operating profit (loss)
Finance income
Finance costs

1,356
5,381

Profit before tax

149,873

Other items
Share of profit (loss) ofinvestments accounted forusing equity method
Depreciation and amortization
Impairment losses (nonfinancial assets)
Segment assets
Investments accounted forusing equity method
Capital expenditures
Notes: 1.

1,539

(47)

–

–

1,492

–

1,492

33,523

16,935

7,156

1,093

58,707

5,908

64,615

2,006

488

–

–

2,494

902

3,396

493,582

412,914112,255

20,685

1,039,436

318,563

1,357,999

1,514

–

–

–

1,514

–

1,514

¥40,437¥16,343¥9,585¥997¥67,362¥8,141¥75,503

Intersegment revenue is based on actual market prices.

2.

Adjustment for operating profit (loss) represents corporate expenses that consist of elimination of transactions among
segments as well as general and administrative expenses and fundamental research expenses, etc., that are not attributableto reportable segments.

3.

Adjustment for segment assets represents corporate assets that are not attributable to reportable segments.

4.

Adjustment for depreciation and amortization represents corporate depreciation and amortization that are not attributableto reportable segments.

5.

Adjustment for capital expenditures represents the increase in corporate assets that is not attributable to reportablesegments.

(3) Information about products and services
This information is omitted as similar information has been disclosed in the above tables.
(4) Geographical information
Revenue and non-current assets of the Olympus Group by country or region were as follows.
Revenue by country or region

28Millions of yen
Japan
North America
EuropeChina
Asia and Oceania
Others
Total
Notes: 1.
2.

2021

2022

¥123,454
236,979
181,227
110,354
63,563
14,967¥135,197
293,441
217,858
125,406
77,484
19,481¥730,544¥868,867

Revenue is based on the location of customers, classified by country or region.
Major countries or regions other than Japan were as follows:(1) North America

United States, Canada(2) Europe

Germany, United Kingdom, France, etc.

(3) Asia and Oceania

Singapore, South Korea, Australia, etc.

(4) Others

Central and South America, Africa, etc.

For the years ended March 31, 2021 and 2022, revenue from external customers in the U.S. was ¥222,057 million and ¥273,429
million, respectively. In no single country or region other than Japan, the United States and China was revenue from externalcustomers significant in the years ended March 31, 2021 and 2022.

Non-current assets (excluding financial instruments, deferred tax assets, and retirement benefit assets)
Millions of yen
JapanAmericas
Europe and Middle East
Asia and Oceania

2021

2022

¥158,872
190,348
99,49924,209¥150,796
214,365
139,256
29,696472,928¥534,113

Total
Notes: 1.
2.

Each geographic location is determined on the basis of geographic proximity.
Major countries and regions other than Japan were as follows:(1) Americas

United States, Canada, Mexico, and Brazil(2) Europe and Middle East

Germany, United Kingdom, France, etc.

(3) Asia and Oceania

Singapore, China, South Korea, Australia, etc.

Within Americas, the balances of non-current assets (except financial instruments, deferred tax assets, and retirement benefit
assets) in the United States were ¥182,958 million and ¥205,699 million as of March 31, 2021 and 2022, respectively. Within
Europe and Middle East, the balances of non-current assets (except financial instruments, deferred tax assets, and retirement
benefit assets) in Germany were ¥52,414 million and ¥55,905 million as of March 31, 2021 and 2022, respectively. Thebalances of non-current assets (except financial instruments, deferred tax assets, and retirement benefit assets) in any individual
country and region other than Japan, the United States, and Germany were not material as of March 31, 2021 and 2022.

(5) Major customers
Information on revenue attributable to major customers for the years ended March 31, 2021 and 2022
was omitted because revenue attributable to each customer accounted for less than 10% of consolidated
revenue.

29

7. Cash and Cash Equivalents
The breakdown of cash and cash equivalents in the consolidated statement of financial position and therelationship between the cash and cash equivalents in the consolidated statement of financial position and the
cash and cash equivalents in the consolidated statement of cash flows as of March 31, 2021 and 2022 were as
follows:
Millions of yen
2021

2022

Cash and deposits
Short-term investments¥173,278
44,200¥294,580
7,992

Cash and cash equivalents in the consolidated statement of financial
position¥217,478¥302,572––¥217,478¥302,572

Cash and cash equivalents included in assets held for sale
Cash and cash equivalents in the consolidated statement of cash flows

8. Trade and Other Receivables
The breakdown of trade and other receivables as of March 31, 2021 and 2022 was as follows:
Millions of yen
2021

2022

¥136,657
12,147436
45,377(12,120)¥151,043
14,955728
50,517(10,958)

Total¥182,497¥206,285

Total

157,920
24,577¥182,497

178,428
27,857¥206,285

Trade notes receivable and trade accounts receivable
Other receivables
Contract assets
Lease receivables
Allowance for doubtful accounts

Current
Non-current
Note:

Trade and other receivables are presented net of allowance for doubtful accounts in the consolidated statement of financial position.

9. Inventories
The breakdown of inventories as of March 31, 2021 and 2022 was as follows:
Millions of yen
Merchandise and finished goods
Work in progress
Raw materials and supplies
Total

2021

2022

¥77,807
23,71857,370¥64,116
40,42862,824¥158,895¥167,368

The amounts of inventories recorded as cost of sales for the years ended March 31, 2021 and 2022 were¥219,710 million and ¥253,024 million, respectively.
Write-downs of inventories recognized as expenses for the years ended March 31, 2021 and 2022 were
¥14,959 million and ¥18,542 million, respectively.
Inventories include materials not expected to be used or sold within 12 months from the end of each fiscal
year, but all of them are held within the Olympus Group’s normal operating cycle. The corresponding
carrying amounts at March 31, 2021 and 2022 were ¥5,779 million and ¥4,135 million, respectively.

30

10. Other Financial Assets
The breakdown of other financial assets as of March 31, 2021 and 2022 was as follows:
Millions of yen
2021
Financial assets measured at fair value through profit or loss
Derivative assets
Equity securities and others
Financial assets measured at amortized cost
Deposits with withdrawal restrictions
Lease and guarantee deposits
Other
Financial assets measured at fair value through other comprehensive
incomeEquity securities
Total
Current
Non-current
Total

2022

¥968
1,495

¥1,874
956

4,661
4,760
10,554

6,023
4,359
8,738

11,1804,471¥33,618¥26,421

10,26823,35010,26916,152¥33,618¥26,421

11. Other Current Assets and Other Non-current Assets
The breakdown of other current assets and other non-current assets as of March 31, 2021 and 2022 was asfollows:
Millions of yen
Prepaid expenses
Consumption tax receivables
Other
Total
Current
Non-current
Total

2021

2022

¥10,090
9,277
7,171

¥14,528
7,285
7,894

¥26,538¥29,707

24,9701,568

27,5652,142¥26,538¥29,707

12. Assets Held for Sale
The breakdown of assets held for sale as of March 31, 2021 and 2022 was as follows:
Millions of yen
2021
AssetsLand
Buildings and structures
Machinery and vehicles
Total

2022

¥45
72
0

¥4,683
2–¥117¥4,685The procedures of sales of assets categorized as assets held for sale in the fiscal year ended March 31, 2021
were completed in the fiscal year ended March 31, 2022.
Assets categorized as assets held for sale in the fiscal year ended March 31, 2022 are assets held by the entire
company not belonging to any segment that the Company decided to sell from the standpoint of management
resource optimization. Sales of these assets were completed on April 27, 2022.

3113. Property, Plant and Equipment(1) Changes in property, plant and equipment
The changes in carrying amount, acquisition cost, and accumulated depreciation and accumulated
impairment losses of property, plant and equipment were as follows:
Carrying amountMillions of yen
Buildings andstructures

Machineryand vehicles

Tools,
furniture andfixtures

Land

Balance at April 1, 2020

¥91,976¥21,880¥61,464¥22,739¥4,075¥202,134

Additions
Additions through business combinations
Depreciation
Impairment losses
Sales and disposals
Transfer to assets held for sale
Reclassification
Exchange differences on translation offoreign operations
Decrease by sale of businesses
Other39,927696(14,879)(339)(2,615)
(72)
3,870

5,625
281
(6,777)(11)(1,153)0
1,534

23,195818(22,906)(27)(3,841)
–
2,137

482
57
(356)
–
(69)
(45)
–

10,20410––––(7,015)79,433
1,862(44,918)(377)(7,678)
(117)
526

4,882

502

3,413

266

401

9,464

(372)
(13)

(343)
11

(195)
(1)

(47)
1

(204)
–

(1,161)(2)

Balance at March 31, 2021

¥123,061¥21,549¥64,057¥23,028¥7,471¥239,166

Additions
Additions through business combinations
Depreciation
Impairment losses
Sales and disposals
Transfer to assets held for sale
Reclassification
Exchange differences on translation offoreign operations
Other

12,846–(15,883)(163)(7,079)
(2)
2,690

6,342
–
(6,965)
(4)
(830)
–
2,486

25,554
29(25,233)(82)(2,160)
–
2,413

358
–
(360)
–
(67)
(4,683)–

10,326–––––(6,100)55,42629(48,441)(249)(10,136)(4,685)
1,489

6,505

884

6,346

253

773

14,761

(214)

(9)

(22)

(2)

(1)

(248)

Balance at March 31, 2022

¥121,761¥23,453¥70,902¥18,527¥12,469¥247,112

Notes: 1.

Constructionin progress

Total

No borrowing costs were capitalized for the years ended March 31, 2021 and 2022.

2.

Depreciation of property, plant and equipment is included in “Cost of sales” and “Selling, general and administrative
expenses” on the consolidated statement of profit or loss.

3.

Changes of carrying amount ¥2,134 million and ¥3,416 million by company housing the Company contracted and loaned
to employees is recorded “Additions” and “Sales and disposals” of “Buildings and structures” for the years ended March
31, 2021 and 2022, respectively. And that has no impact on balance.

Acquisition cost
Millions of yen

Balance at April 1, 2020
Balance at March 31, 2021
Balance at March 31, 2022

Buildings andstructures

Machineryand vehicles

Tools,
furniture andfixtures

Land

Constructionin progress

Total¥195,563
244,133¥257,067¥64,040
66,029¥70,030¥261,650
267,051¥305,888¥23,249
23,873¥19,622¥4,075
7,471¥12,469¥548,577
608,557¥665,076

32

Accumulated depreciation and accumulated impairment losses
Millions of yen

Balance at April 1, 2020
Balance at March 31, 2021
Balance at March 31, 2022

Buildings andstructures

Machineryand vehicles

Tools,
furniture andfixtures¥103,587
121,072¥135,306¥42,160
44,480¥46,577¥200,186
202,994¥234,986

Land

Constructionin progress

¥510
845
¥1,095

¥–
–
¥–

Total
¥346,443
369,391¥417,964

As the provisionally measured fair values of the assets acquired and liabilities assumed related to the businesscombination were revised in the fiscal year ended March 31, 2022, the “carrying amount,” and “acquisition
cost,” of property, plant and equipment for the fiscal year ended March 31, 2021, have been retrospectively
adjusted. For details on retrospective adjustment, please see Note “40. Business Combinations.”(2) Right-of-use assets
The carrying amount of right-of-use assets included in property, plant and equipment by underlying
asset type was as follows:
Millions of yen

Balance at April 1, 2020
Balance at March 31, 2021
Balance at March 31, 2022
Note:

Buildings andstructures

Machinery andvehiclesTools, furnitureand fixtures¥25,195
51,624¥50,341¥4,588
4,487¥5,112¥2,3352,173¥1,881

Land
¥308
264
¥260

Total
¥32,426
58,548¥57,594

Right-of-use assets increased during the fiscal years ended March 31, 2021 and 2022 by ¥39,849 million and ¥16,122 million,
respectively.

3314. Goodwill and Intangible Assets(1) The changes in carrying amount, acquisition cost, and accumulated amortization and accumulated
impairment losses of goodwill and intangible assets were as follows:
Carrying amountMillions of yen
Intangible assets
Goodwill

Capitalized
development
costs

Balance at April 1, 2020
Additions
Additions through internal development
Additions through business combinations (Note 2)
Amortization
Impairment losses
Sales and disposals
Reclassification
Exchange differences on translation of foreign
operations
Decrease by sale of businesses
Other¥98,328––
25,087––––¥47,696–
16,134521(8,617)
(465)
(80)
(9)

3,969

Balance at March 31, 2021
Additions
Additions through internal development
Additions through business combinations (Note 3)
Amortization
Impairment losses
Sales and disposals
Reclassification
Exchange differences on translation of foreign
operations
Other
Balance at March 31, 2022
Notes: 1.

Software

Other

Total

¥11,730
2,948–
199(3,542)
–
(208)
267

¥15,366
1,485–
22,125(2,860)
–
(610)
113

¥74,792
4,433
16,134
22,845(15,019)
(465)
(898)
371

1,054

263

1,339

2,656

–
–

–
–

(16)
–

(44)
21

(60)
21

¥127,384¥56,234¥11,641¥36,935¥104,810––
21,093–––––
15,499–(9,049)(2,061)
–
11

3,205
–
–
(3,296)(1,086)
(24)
(232)

1,373
–
8,645
(3,829)
–
(381)
8

4,578
15,4998,645(16,174)(3,147)
(405)
(213)

16,021

1,310

332

4,527

6,169

–

16

801

(218)

599

¥164,498¥61,960¥11,341¥47,060¥120,361

Amortization of capitalized development costs is recorded as “Cost of sales” on the consolidated statement of profit or loss.
Amortization cost excluding capitalized development costs is recorded in “Cost of sales” and “Selling, general andadministrative expenses” on the consolidated statement of profit or loss.

2.

Of additions through business combinations, major components included in “Other” are ¥2,016 million in technologyrelated assets arising in the acquisition of FH ORTHO SAS and ¥14,339 million in technology-related assets arising in
the acquisition of Veran Medical Technologies, Inc. For details on business combinations, please see Note “40. Business
Combinations.”3.

Of additions through business combinations, major components included in “Other” are ¥8,645 million in technologyrelated assets arising in the acquisition of Medi-Tate Ltd. For details on business combinations, please see Note “40.
Business Combinations.”

Acquisition cost
Millions of yen
Intangible assets

Balance at April 1, 2020
Balance at March 31, 2021
Balance at March 31, 2022

Goodwill

Capitalized
development
costs

Software¥98,328
127,384¥164,498¥72,665
87,537¥99,283¥53,962
56,335¥58,389

34

Other

Total

¥121,662
147,960¥172,542¥248,289
291,832¥330,214

Accumulated amortization and accumulated impairment losses
Millions of yen
Intangible assets
Capitalized
development
costs

Goodwill
Balance at April 1, 2020
Balance at March 31, 2021
Balance at March 31, 2022

¥–
–
¥–

Software¥24,969
31,303¥37,323¥42,232
44,694¥47,048

Other

Total

¥106,296
111,025¥125,482¥173,497
187,022¥209,853

As the provisionally measured fair values of the assets acquired and liabilities assumed related to the businesscombination were revised in the fiscal year ended March 31, 2022, the “carrying amount,” and “acquisition
cost,” of goodwill and intangible assets for the fiscal year ended March 31, 2021, have been retrospectively
adjusted. For details on retrospective adjustment, please see Note “40. Business Combinations.”(2) Significant intangible assets
Significant intangible assets recognized at March 31, 2021 are technology-related assets arising fromthe acquisition of Veran Medical Technologies, Inc. by the Olympus Group on December 29, 2020. The
carrying amount, which reflects revisions to the provisionally measured fair values of the assets
acquired and liabilities assumed related to the business combination, was ¥14,968 million and theremaining amortization period was 15 years as of March 31, 2021.
Significant intangible assets recognized at March 31, 2022 are technology-related assets arising fromthe acquisition of Veran Medical Technologies, Inc. by the Olympus Group on December 29, 2020 andtechnology-related assets arising from the acquisition of Medi-Tate Ltd. by the Olympus Group on May
27, 2021. The carrying amounts were ¥15,168 million and ¥9,276 million, respectively, and theremaining amortization period was 14 years each, as of March 31, 2022.
For details on business combinations, please see Note “40. Business Combinations.”(3) Research and development expenditures recognized as expenses
Research expenses and development costs that do not meet asset recognition criteria are recognized as
expenses when incurred. Research and development expenditures recognized as expenses in the years
ended March 31, 2021 and 2022 were ¥65,660 million and ¥69,773 million, respectively.
15. Commitments
Commitments to acquire property, plant and equipment and intangible assets subsequent to March 31, 2021
and 2022 were as follows:
Millions of yen
Property, plant and equipment
Intangible assets
Total

2021

2022

¥6,738910¥5,972
1,825¥7,648¥7,797

16. Impairment of Non-financial Assets(1) Impairment losses
The Olympus Group recognizes impairment losses when an asset’s recoverable amount is less than its
carrying amount. Impairment losses on non-financial assets are included in “Other expenses” on the
consolidated statement of profit or loss.
Business assets are mainly grouped according to business segment, assets scheduled for disposal aregrouped according to the assets to be disposed, and idle assets are grouped individually.

35

The breakdown of impairment losses by asset type was as follows:
Millions of yen
2021
Property, plant and equipment
Buildings and structures
Machinery and vehicles
Tools, furniture and fixtures
Intangible assets
Capitalized development costs
Software
Total

2022

¥339
11
27

¥163
4
82

465
–

2,061
1,086

¥842

¥3,396

There were no individual material impairment losses to be disclosed for the year ended March 31, 2021.
Major impairment losses recognized in the year ended March 31, 2022 were as follows.
The Company recognized impairment losses of ¥1,630 million on development assets in the endoscopebusiness, which were written down to their recoverable amount since the Company no longer expects
them to generate the expected earnings at the time of acquisition due to such factors as changes in themarket environment. The recoverable amount was the fair value less costs of disposal and, as the assets
are difficult to sell, this amount was zero. It was classified as level 3 in the fair value hierarchy.
The Company recognized impairment loss of ¥902 million for software that is a corporate asset notbelonging to any reportable segment, as the software is no longer expected to be used in the future andthus was written down to its recoverable amount. The recoverable amount was the fair value less costsof disposal and, as the assets are difficult to sell, this amount was zero. It was classified as level 3 in thefair value hierarchy.
The fair value hierarchy is described in greater detail in Note 35 “Financial Instruments (4) Fair value.”(2) Impairment test for goodwill
The breakdown of the carrying amount of goodwill corresponding to cash generating units was asfollows:
Millions of yen
2021¥19,496
102,849
1,971

Endoscopic solutions segment
Therapeutic solutions segment
Scientific solutions segment
OthersOrthopedic business
Total

2022
¥21,339
137,501
2,174

3,068

3,484

¥127,384¥164,498

The Olympus Group tested goodwill for impairment on March 31, 2021 and 2022.
Individually significant goodwill carried on the consolidated statement of financial position is the
goodwill allocated to the Endoscopic solutions segment and Therapeutic solutions segment. As theprovisionally measured fair values of the assets acquired and liabilities assumed related to the businesscombination were revised in the fiscal year ended March 31, 2022, the amount of goodwill for the fiscal
year ended March 31, 2021 has been retrospectively adjusted. Details of the retrospective adjustments
are described in Note “40. Business Combinations.” In addition, from the fiscal year ended March 31,
2022, bronchoscopes, which were previously included in the Endoscopic solutions segment, weretransferred to the Therapeutic solutions segment, to strengthen business in the respiratory area.
Accordingly, goodwill allocated to bronchoscopes of ¥2,865 million and ¥3,133 million for the fiscal
years ended March 31, 2021 and 2022, respectively, was split off from goodwill of the Endoscopic

36

solutions segment and reallocated to goodwill of the Therapeutic solutions segment. Of the goodwill
recorded as a result of the business combination in the fiscal year ended March 31, 2022, the goodwillof Medi-Tate Ltd. is allocated to the Therapeutic solutions segment.
For impairment testing of goodwill, the recoverable amount is measured based on value in use.
Value in use is measured by discounting estimated future cash flows to present value. Estimated future
cash flows is primarily based on a business plan approved by the management and considering a growthrate for the period after the term of the business plan.
Business plans have a maximum term of five years as a general rule. Business plans reflect
management’s assessment of future industry trends as well as historical data, and are prepared based on
external and internal information. The estimated future cash flows are determined based on the businessplans.
The growth rate for the period after the term of the business plans is determined based on market
research reports for the industry in which the cash-generating unit (CGU) operates. The growth rate of“Endoscopic Solutions Business” and “Therapeutic Solutions Business” is 1.1% - 5.00% and 1.8% 4.43%, respectively, as of March 31, 2021, and 1.7% - 4.00% and 1.7% - 3.83%, respectively, as ofMarch 31, 2022.
The discount rate is based on the pre-tax weighted average cost of the cash-generating unit. The
discount rates for the fiscal years ended March 31, 2021 and 2022, were 8.6% and 7.7%, respectively.
The main assumptions in estimating value in use are the growth rate and the operating profit ratio in
estimating future cash flows in the five year business plan, the growth rate for the period after thebusiness plan and the discount rate.
Although the impact of the spread of COVID-19 differs by region, it is currently expected to continue
diminishing overall as vaccinations become available worldwide, and the Company assumes that sales
activities will also begin to normalize.
Value in use measured using the above rates amply exceeds the carrying amount of the Endoscopic
solutions segment and the carrying amount of the Therapeutic solutions segment, respectively. The
Company believes that there is a low probability of significant impairment even if the key assumptions
used in the impairment testing were to change within a range of reasonable foreseeability.
17. Trade and Other Payables
The breakdown of trade and other payables as of March 31, 2021 and 2022 was as follows:
Millions of yen
Notes and account payable
Other payable
Total

37

2021

2022

¥44,463
25,407¥45,316
15,231¥69,870¥60,547

18. Bonds and Borrowings
The breakdown of bonds and borrowings as of March 31, 2021 and 2022 was as follows:
Millions of yen
2021
Short-term borrowings

2022

Average interest
rate
(%)

¥5,458

¥67

1.52

–

39,966

0.10

Current portion of long-term borrowings

26,071

12,2482.92

Bonds (excluding current portion)
Long-term borrowings (excluding current
portion)119,596

140,356

1.11

204,139

193,4900.43¥355,264¥386,127

31,529323,735

52,281
333,846¥355,264¥386,127

Current portion of bonds payable

Total
Current
Non-current
Total
Note:

Maturity—
September 2022 to
December 2022
February 2023 to March
2023
March 2024 to July 2030
November 2023 to
September 2029

The average interest rate is the weighted average interest rate on the ending balance of borrowings. Bonds and borrowings areclassified as financial liabilities measured at amortized cost.

The breakdown of bonds as of March 31, 2021 and 2022 was as follows:
CompanyOlympus
Corporation
Olympus
Corporation
Olympus
Corporation
Olympus
Corporation
Olympus
Corporation
Olympus
Corporation
Olympus
Corporation
Total

Bond nameMillions of yen

Issue date

2021

2022

Interest (%)

Maturity date

22nd unsecured bonds

September 20,
2017¥9,984¥9,9940.22

September 2022

23rd unsecured bonds

March 7, 2019

9,967

9,979

0.27

March 2024

29,93329,971

0.06

December 2022

19,931

19,9490.20

December 2024

24th unsecured bonds
25th unsecured bonds

December 5,
2019
December 5,
201926th unsecured bonds

July 18, 2020

24,90324,925

0.25

July 2025

27th unsecured bonds

July 19, 2020

24,87824,891

0.47

July 2030

Dollar-denominatedunsecured bonds due
2026

December 8,
2021–

60,613

2.14

December 2026

¥119,596¥180,322

38

The breakdown of long-term borrowings, including current portion, as of March 31, 2021 and 2022 was asfollows:
Millions of yen

Financial institution
Japanese BankJapanese BankJapanese BankJapanese BankJapanese BankJapanese BankJapanese BankJapanese BankJapanese BankJapanese BankJapanese BankJapanese BankJapanese BankJapanese BankJapanese Bank
Other

2021
¥13,007
1,458
10,0009,538
10,00015,000
5,535
5,536
5,536
5,536
9,581
39,85549,61139,751
10,000266

2022¥13,063
1,464
10,000
9,608
10,000
–
–
6,120
–
6,120
9,639
39,912
49,71039,831
10,000271

Total¥230,210¥205,738

Interest rate
(%)
0.86
0.73
1.38
0.53
1.39
2.04
2.91
2.91
2.92
2.92
0.55
0.10
0.32
0.22
0.35

Maturity date
September 2029
September 2027
September 2025
August 2027
September 2025
May 2021
February 2022
February 2023
March 2022
March 2023
June 2028
November 2023
April 2025
May 2024
May 2024

19. Other Financial Liabilities
The breakdown of other financial liabilities as of March 31, 2021 and 2022 was as follows:
Millions of yen
Financial liabilities measured at fair value through profit or loss
Derivative liabilities
Contingent consideration
Financial liabilities measured at amortized cost
Lease liabilities
Other
Total
Current
Non-current
Total

39

2021

2022

¥2,467
3,608¥4,037
6,100

66,407
9,588

65,015
15,463¥82,070¥90,615

21,87360,19726,01564,600¥82,070¥90,615

20. Provisions
The changes in provisions during the year ended March 31, 2022 were as follows:
Millions of yen
Provision for
product
warranties

Provision forloss onlitigation

Provision forduodenoscopemarketresponse

Balance at April 1, 2021
Increase during the year
Decrease (Provisions used)
Decrease (Provisions reversed)
Exchange differences on translation of foreign
operations¥9,759908(2,622)(3,766)¥4,108
61
(50)
(12)

5

Balance at March 31, 2022
Current
Non-current
Total
Notes: 1

Other

Total

¥12,394
1,632(1,919)(4,153)¥12,827
2,765(2,698)(4,861)¥39,0885,366(7,289)(12,792)

400

–

119

524

¥4,284¥4,507¥7,954¥8,152¥24,897¥4,083201¥4,47433¥7,954–¥5,603
2,549

22,1142,783¥4,284¥4,507¥7,954¥8,152¥24,897

The Company has decided to voluntarily replace the old type of duodenoscopes with a fixed tip cap with the new type with aremovable tip cap, which is easier to clean and disinfect, against the background of obtaining regulatory approval for the new
type of duodenoscopes with a removable tip cap in the United States, and has recorded the amount deemed necessary for thismarket response as provision. Up until now, the Company had been proceeding with the recall for the old-type product inexchange for the new type. However, in the fiscal year ended March 31, 2022, the Company decided to replace the old-type
product with the new product recommended by the FDA (the US Food and Drug Administration) at no charge with theobjective of speeding up the progress, and due to a change to the amount of money deemed necessary for provision forduodenoscope market response, a reversal of that provision of ¥4,153 million has been made.

2.

As a result of conducting voluntary post-market surveillance, the Company has decided to voluntarily recall a
Bronchovideoscope model and a Choledochofiberscope model that were subject to that surveillance in light of theinternal quality standards, placing top priority on securing patient safety, and has recorded the amount deemed necessary
for this market response as provision. The Company had been proceeding with the recall for the old type in exchange forthe new type. However, in the fiscal year ended March 31, 2022, the Company decided to replace the old-type productwith the new product at no charge with the objective of speeding up the progress, and due to a change to the amount ofmoney deemed necessary for the market response, a reversal of provision for product warranties of ¥2,663 million has
been made.

3.

Of the tax provision recorded in the fiscal year ended March 31, 2019 in anticipation of additional collection related tothe independent investigation conducted by the Company’s foreign subsidiaries regarding indirect taxes, ¥3,596 million,
which is no longer expected to be incurred in the fiscal year ended March 31, 2022, is reversed from Other provision.

(1) Provision for product warranties
For products sold subject to a quality assurance warranty, the Company accrues after service cost
expected to be incurred within the guarantee period. The provision for product warranties is calculatedusing the prescribed standards, based on after service cost actually incurred in the past. These warranty
provisions are expected to be expended during the guarantee period (mostly within three years).
(2) Provision for loss on litigation
To provide for losses related to lawsuits or other litigation, in light of progress of the lawsuits, theexpected amount of these losses is accounted for based on a reasonable estimate of the amount deemednecessary. These loss provisions are expected to be expended mostly within one year.
(3) Provision for duodenoscope market response
Against the backdrop of acquiring legal authorization for new products with detachable tip caps forduodenoscopes in the United States, the Company decided to autonomously replace old products with
fixed tip caps with new products with detachable tip caps, which are simple to wash and disinfect, forduodenoscopes. The amount deemed necessary to carry out this market response was reasonably
estimated and recorded as a provision.

40

21. Other Current Liabilities and Other Non-current Liabilities
The breakdown of other current liabilities and other non-current liabilities as of March 31, 2021 and 2022
was as follows:
Millions of yen
Accrued expenses
Contract liabilities
Other
Total
Current
Non-current
Total

2021

2022

¥107,754
44,92322,719¥117,143
53,65026,217¥175,396¥197,010

160,971
14,425

180,941
16,069¥175,396¥197,010

22. Government Grants
Government grants included in other current liabilities and other non-current liabilities as of March 31, 2021
and 2022 were as follows:
Millions of yen
2021
Other current liabilities
Other non-current liabilities

¥473
2,425

2022
¥443
2,038

Government grants were conditioned on acquiring equipment in a specific medical field in Japan and they areamortized over the useful life of their related assets on a straight-line basis.
There are no unfulfilled conditions or contingencies related to these grants.
In the year ended March 31, 2021, the Company recorded proceeds from government subsidies of ¥2,388
million in “Other income.” The government subsidies are the grants from the national government,
municipalities, and the like due to the spread of COVID-19.
23. Employee Benefits
The Company and some of its consolidated subsidiaries have established defined benefit corporate pension
plans, defined contribution pension plans and lump sum payment plans to fund employees’ retirement
benefits.
The defined benefit corporate pension plans are cash balance plans that use a point system. In these plans,points are awarded to the plan participants based on their job performance and interest points calculated using
an interest crediting rate based on trends in market interest rates accumulate in the participants’ hypotheticalindividual accounts.
The Olympus Group, its pension funds and institutions that manage its plan assets are legally required tofaithfully administer and manage plan assets in the aim of providing reliable pension benefits to plan
participants into the indefinite future. They fulfill their management responsibilities in accord with basic
policies prepared by the funds.
The Olympus Group’s retirement benefit plans are exposed to multiple risks, including investment risks
associated with plan assets and interest rate risk associated with defined benefit obligations.
A pension buy-in was implemented for the primary pension plan for the Olympus Group’s subsidiaries
located in the U.K. in June 2020. In the implementation of the transaction, a portion of plan assets held by thepension plan have been contributed to the insurance company, and the Olympus Group concluded aninsurance agreement with the insurance company that ensures the receipt of an amount of money equivalent
to pension benefits for pensioners in the future. Consequently, the pension plan was released from the risk ofmanagement of plan assets and the risk of increase in defined benefit obligations due to a rise in longevity ofpensioners and other factors. However, if the insurance company does not pay employee benefits stipulated
in the insurance policy to employees, the Olympus Group continues to have legal or constructive obligations
to make an additional payment.

41

Furthermore, a pension buyout was implemented for the primary pension plan for the Olympus Group’s
subsidiaries located in the U.S. in relation to pension benefits to pensioners in March 2021. In conjunction
with this, an insurance company has accepted plan assets and obligations at the amount of defined benefit
obligations of the plan plus fees, etc., and this insurance company will pay benefits to plan participants in the
future. Consequently, in relation to pension benefits for pensioners, the pension plan was released from therisk of management of plan assets and the risk of increase in defined benefit obligations due to a rise inlongevity of pensioners and other factors. Since pension benefits paid to active employees and vested
pensioners in a waiting period are not subject to the pension buyout, the Olympus Group continues to havethe risk of management of plan assets and the risk of increase in defined benefit obligations due to a rise inlongevity of pensioners and other factors, for the pension benefits to active employees and vested pensioners
in a waiting period.
(1) Defined benefit plans
1) Reconciliation of defined benefit obligations
The changes in defined benefit obligations were as follows:
Millions of yen
2021

2022

Balance at April 1
Current service cost
Past service cost
Interest costRemeasurements
Actuarial gains and losses arising from changes in demographic
assumptions
Actuarial gains and losses arising from changes in financial
assumptions
Other
Contributions by employees
Benefits paid
Settlement of a plan (Note 1)
Effects of business combinations and disposals
Exchange differences on translation of foreign operations
Other¥202,638
7,314
51
2,878

¥179,340
6,943
343
2,461

(516)

480

1,133

(7,718)301
137(13,403)(21,921)(3,007)3,776(41)(1,219)156(11,094)
–
(494)
6,462
(27)

Balance at March 31¥179,340¥175,633

Note: 1. This represents a decrease in defined benefit obligations due to the implementation of the pension buyout transaction.

2) Reconciliation of fair value of plan assets
The change in the fair value of plan assets during the year ended March 31, 2022 is presented below.
The Olympus Group conducts a financial verification based on the Company’s corporate pension
rules at the end of every fiscal year to ascertain the extent of any funding deficit and determine
whether contributions need to be recalculated.
In the fiscal year ending March 31, 2023, the Olympus Group plans to contribute ¥5,875 million to
the plan.

42

Millions of yen
2021

2022

Balance at April 1
Interest income
Remeasurements
Return on plan assets (Note 1)
Contributions by employer
Contributions by employees
Benefits paid
Settlement of a plan (Note 2)
Effects of business combinations and disposals
Exchange differences on translation of foreign operations
Other¥184,142
2,585¥159,571
1,988(2,580)6,570
136(11,083)(22,474)(3,550)
6,051
(226)

(410)
6,646
134
(10,288)
–
–
4,058
(92)

Balance at March 31¥159,571¥161,607

Notes: 1.
2.

“Return on plan assets” for the year ended March 31, 2021 includes ¥(14,418) million in the difference due to remeasurement offair value of plan assets arising in conjunction with the pension buy-in transaction.
This represents a decrease in plan assets due to the implementation of the pension buyout transaction.

3) Reconciliation of defined benefit obligations and plan assets
The reconciliation between the defined benefit obligations and plan assets and the retirement benefit
liability and asset recognized in the consolidated statement of financial position was as follows:
Millions of yen
2021

2022

Present value of the funded defined benefit obligations
Fair value of plan assets¥161,366(159,571)¥157,914(161,607)

SubtotalPresent value of the unfunded defined benefit obligations

1,795
17,974(3,693)
17,719Net defined benefit liabilities (assets)

19,76914,026

Amounts recognized in the consolidated statement of financial position
Retirement benefit liability
Retirement benefit asset

42,446(22,677)

40,001(25,975)

Net defined benefit liabilities (assets)¥19,769¥14,026

4) Components of plan assets
The breakdown of plan assets by category was as follows:
Millions of yen
2021
Assets with quoted market prices in an active market
Japanese equity securities
Overseas debt securities
Cash and cash equivalents

2022¥1,407
8,008
2,458¥1,440742
10,849¥11,873¥13,031¥12,098
9,044
55,13853,756
17,662¥15,300
10,54052,92952,933
16,874

Total¥147,698¥148,576

Total of plan assets¥159,571

161,607

Total
Assets without quoted market prices in an active market
Overseas equity securities
Overseas debt securities
General account for life insurance companies
Jointly managed money trust
Other (Note 1)

Note 1: Insurance contracts concluded through annuity buy-in transactions included in “Other” amounted to ¥15,202 million and ¥14,187
million as of the end of the fiscal years ended March 31, 2021 and 2022, respectively.

43

To reliably pay defined benefit obligations into the indefinite future, plan assets in the Olympus
Group’s corporate pension funds are managed safely and efficiently in the aim of generating
medium- to long-term investment returns in excess of the minimum rate of return required tomaintain the plans. To do so, the pension funds carefully ascertain their risk tolerance, determine an
optimal asset allocation within those risk constraints and invest in a diversified portfolio of assets.
5) Matters related to actuarial assumptions
The significant actuarial assumptions used to measure present value of defined benefit obligations
were as follows:
2021
Discount rate

2022
0.61%

0.74%

6) Sensitivity analysis
In the event of a 0.5% change in the discount rate used in the actuarial calculation, the present valueof the defined benefit obligations would be affected as shown below. This analysis assumes that allother variables remain constant. In actuality, however, the sensitivity analysis may be affected bychanges in other assumptions.
Millions of yen
2021
Discount rate
0.5% increase(decrease in obligations)
0.5% decrease(increase in obligations)2022¥(11,736)¥(12,282)

13,76914,3627) Weighted average duration
The weighted average durations of the defined benefit obligations were 13.9 years and 14.3 years asof March 31, 2021 and 2022, respectively.
(2) Defined contribution plans
The amounts recognized as expenses related to the defined contribution plan were ¥18,714 million and¥19,684 million for the years ended March 31, 2021 and 2022, respectively, and included expenses
recognized in relation to the public pension system.

4424. Share Capital and Other Components of Equity(1) Number of authorized shares, issued shares and treasury shares
The changes in the number of authorized shares, issued shares and treasury shares were as follows:
Number of shares
2021

2022

Authorized shares

4,000,000,000

4,000,000,000

Issued shares (Note 1)
As of April 1
Increase or decrease (Note 2)

1,370,914,963–

1,370,914,963(71,620,630)

1,370,914,963

1,299,294,333

85,329,780(49,859)

85,279,921(59,018,309)

85,279,921

26,261,612

As of March 31
Treasury shares (Note 3)
As of April 1
Increase or decrease (Note 4)
As of March 31
Notes: 1.

All of the shares of the Company are ordinary shares that have no par value and no limitations on the rights. Issued shares are
fully paid.

2.

The decrease in the fiscal year ended March 31, 2022, was due to the cancellation of treasury shares conductedeffectively on June 4, 2021.

3.

The Company has adopted stock option plans and utilizes treasury shares for delivery of shares due to exercise. Contract
conditions and amounts are described in Note 27 “Share-based payments.”

4.

The main changes in the fiscal year ended March 31, 2022, were a decrease of 71,620,630 shares due to the cancellationof treasury shares conducted effectively on June 4, 2021, and an increase of 12,681,000 shares due to the acquisition oftreasury shares conducted between December 21, 2021, and February 18, 2022 on contract basis.

(2) Capital surplus
Japan’s Companies Act provides that at least one-half of capital paid in or contributed in exchange for
newly issued shares is to be classified as share capital and any amount not classified as share capital is
to be classified as legal capital surplus included in capital surplus.
Additionally, legal capital surplus may be reclassified as share capital pursuant to a shareholder
resolution at a General Meeting of Shareholders.
(3) Retained earnings
Japan’s Companies Act provides that one-tenth of the amount of reductions in surplus due to dividend
distributions funded by the surplus is to be accumulated as legal capital surplus or legal retained
earnings until the total of legal capital surplus and legal retained earnings equals one-quarter of sharecapital.
Accumulated legal retained earnings may be appropriated to reduce a capital deficit. They may also be
utilized pursuant to a shareholder resolution at a General Meeting of Shareholders.
The amount of the Company’s retained earnings distributable as dividends is measured based on theamount of retained earnings carried on the Company’s accounting books prepared in accordance withaccounting principles generally accepted in Japan.
Additionally, the Companies Act imposes certain restrictions on how the amount of retained earnings
distributable as dividends is measured. The Company distributes retained earnings within the constraints
stipulated by those restrictions.

45

(4) Other components of equity
The changes in other components of equity were as follows:
Millions of yen
Exchangedifferences ontranslation offoreign
operations

Cash flow
hedgesShare of other
Financial assets
comprehensive
measured at
Remeasuremen income (loss)
fair value
ts of definedof associates
through otherbenefit plansaccounted forcomprehensive
using equity
incomemethodTotal

Balance at March 31, 2020
Other comprehensive
incomeReclassification to retained
earnings¥(27,763)¥(516)¥5,625¥–¥(97)¥(22,751)

21,938

169

2,626

(926)

(55)

23,752––(3,274)926–(2,348)

Balance at March 31, 2021¥(5,825)¥(347)¥4,977¥–¥(152)¥(1,347)

42,407(2,154)

(686)

5,312

152

45,031––(3,554)(5,312)–(8,866)¥36,582¥(2,501)

¥737

¥–

¥–

¥34,818

Other comprehensive
incomeReclassification to retained
earnings
Balance at March 31, 2022

1) Exchange differences on translation of foreign operations
Exchange differences that arise when foreign operations’ financial statements prepared in a foreign
currency are consolidated
2) Cash flow hedges
The Company hedges to avert the risk of changes in future cash flows. Changes in the fair value ofderivatives designated as cash flow hedges are recognized in other comprehensive income to theextent the hedges are deemed effective.
3) Financial assets measured at fair value through other comprehensive income
Valuation gains/losses on financial assets measured at fair value through other comprehensive
income4) Remeasurements of defined benefit plans
Changes in defined benefit obligations due to actuarial gains/losses and the effects of changes in
actuarial assumptions; they are recognized in other comprehensive income when they occur and
immediately transferred from other components of equity to retained earnings.
5) Share of other comprehensive income (loss) of associates accounted for using equity method
The Company’s share of the exchange differences on translation of the financial statements offoreign operations of associates accounted for using equity method
25. Capital Policy
To enhance its corporate value, the Olympus Group has adopted a basic policy, premised on maintaining astable financial foundation, of continually returning value to shareholders while placing priority on investingin growth businesses, mainly the Medical Business.
The Olympus Group manages all of its equity and interest-bearing debt as components of its capital cost.
Cognizant of financial stability and capital efficiency, the Olympus Group aims to improve its credit ratings
issued by rating agencies to more readily procure funding globally. The Olympus Group is not subject to any
significant capital restrictions (except for general provisions stipulated in Japan’s Companies Act).
The Olympus Group has designated its equity ratio (ratio of total equity attributable to owners of parent tototal assets) and return on equity (ROE) as equity-related key performance indicators. These indicators as ofor for the years ended March 31, 2021 and 2022 were as follows.

46

2021
Equity ratio (Note 1)
Return on equity (ROE) (Notes 2, 3)
Notes: 1.

2022
33.3%
3.4%

37.6%
25.6%

Total equity attributable to owners of parent / Total assets

2.

Profit attributable to owners of parent (total of continuing operations and discontinued operations) / Total equity
attributable to owners of parent (Average)

3.

ROE calculated using profit attributable to owners of parent (continuing operations only) at March 31, 2021 was 17.1%.

26. Dividends
Dividends paid during the year ended March 31, 2021 were as follows:

Resolution

Class of shares

Amount of dividends
paid(Millions of yen)

Dividend per
share
(Yen)

Record date

Effective date

General Shareholders’ Meeting(July 30, 2020)

Common stock¥12,856¥10.00

May 31, 2020

July 31, 2020

Record date

Effective date

March 31, 2021

June 3, 2021

Dividends paid during the year ended March 31, 2022 were as follows:
Resolution
Board of Directors’ Meeting(May 7, 2021)

Class of shares

Amount of dividends
paid(Millions of yen)

Dividend per
share
(Yen)

Common stock¥15,428¥12.00

Dividends for which the record date falls in the current fiscal year and the effective date is in the following
fiscal year are as follows:
Resolution
Board of Directors’ Meeting(May 11, 2022)

Class of shares

Amount of dividends
paid(Millions of yen)

Dividend per
share
(Yen)

Common stock¥17,822¥14.00Record date

Effective date

March 31, 2022

June 3, 2022

27. Share-based Payments
The Olympus Group has adopted equity-settled stock option plans for directors, executive officers, corporate
officers with the aim of enhancing awareness toward contributing to sustainable improvement of corporate
value as well as further enhancing value sharing with shareholders.
(1) Stock Options
1) Overview of stock option plans
Under the stock option plans, grantees are granted 400 shares of common stock per subscription
right to shares.
The grants are not subject to vesting conditions, but holders of subscription rights to shares may
exercise their subscription rights to shares only during a 10-year period beginning one year from the
day after the date on which they vacate their position as a director, executive officer or corporate
officers of the Company (or the date on which they vacate their position as an audit & supervisoryboard member if they were appointed to the Audit & Supervisory Board members after vacating
their position as a director or corporate officer). If not exercised within the exercise period, theoptions become null and void. The Company introduced a Restricted Share-Based Remuneration
Plan and Performance-Linked Share-Based Remuneration Plan from the year ended March 31, 2018,
and the stock option plan was terminated. No stock options have been granted since such time. The
exercise period for stock options already granted ends on July 13, 2046.

47

2) Outline of stock options
Number of shares
grantedExercise price(Yen)

August 26, 2013

160,400

1

July 11, 2014

164,000

1

July 13, 2015

154,800

1

July 13, 2016

158,000

1

Grant date
First series ofstock subscription rights
Second series ofstock subscription rights
Third series ofstock subscription rights
Fourth series ofstock subscription rights
Note:

Exercise period
From August 27, 2013
to August 26, 2043
From July 12, 2014
to July 11, 2044
From July 14, 2015
to July 13, 2045
From July 14, 2016
to July 13, 2046

The number of stock options is presented as the number of underlying shares.

3) Movement in number of stock options and weighted average exercise price
2021

2022

Number of shares

Weighted average
exercise price(Yen)

Number of shares

Weighted average
exercise price(Yen)

Outstanding at beginning of year
GrantedExercised
Expired563,600–(50,400)
–

1
–
1
–

513,200–(83,600)
–

1
–
1
–

Outstanding at end of year

513,200

1

429,600

1

Exercisable at end of year

294,8001

211,200

1

Notes: 1.

The number of stock options is presented as the number of underlying shares.

2.

The weighted average share prices of stock options at the time of exercise were ¥1,988 and ¥2,325 for the years ended
March 31, 2021 and 2022, respectively.

3.

The weighted average remaining lives of unexercised stock options year were 23.9 years and 23.0 years as of March 31,
2021 and 2022, respectively.

(2) Restricted Share-Based Remuneration Plan
1) Overview of Restricted Share-Based Remuneration Plan
The Restricted Share-Based Remuneration Plan is for the Company’s executive officers andcorporate officers.
Under the Restricted Share-Based Remuneration Plan, the Company’s executive officers andcorporate officers serving in qualifying positions wholly transfer their rights to monetary
remuneration receivable from the Company as in-kind property contributions to the plan and receive
newly issued shares of the Company’s common stock, conditional upon their meeting a specified
continuous-tenure requirement.
Issuance of the Company’s common shares as restricted share-based remuneration is contingent on
the Company and the eligible executive officers and corporate officers serving in qualifying
positions entering into an agreement that includes provisions (1) prohibiting the shares from beingtransferred or pledged to a third party or otherwise disposed of in any manner during a certain
specified period and (2) entering into agreement including contents such as allowing the Company
to reclaim the shares at no cost under certain specified circumstances. The Company abolished therestricted stock compensation plan due to the introduction of the Restricted Stock Unit plan
effectively from the fiscal year ended March 31, 2021. Therefore, no shares will be granted under
the Restricted Stock Unit plan from the fiscal year ended March 31, 2021, onward.
2) Number of shares granted during the year and fair value at grant date
2021
Grant date
Number of shares
Fair value at grant dateJuly 30, 2020
26,821¥1,947

48

2022
–
–
–

(3) Performance-Linked Share-Based Remuneration Plan
1) Overview of Performance-Linked Share-Based Remuneration Plan
The Performance-Linked Share-Based Remuneration Plan is for executive officers and corporate
officers.
Under the Performance-Linked Share-Based Remuneration Plan for executive officers, the numberof units for shares of common share delivered based on the amount of basic compensation isdetermined at the beginning of the performance evaluation period, and the executive officers transfer
all their rights to monetary remuneration receivable paid according to the degree of attainment oftargets at the end of the performance evaluation period as in-kind property contributions and receive
newly issued shares of the Company’s common share.
The performance evaluation period is three years, and the Compensation Committee determines thepayment rate within the predetermined range according to the degree of attainment, at the end of theperformance evaluation period, of predetermined performance indicators and targets set by theCompensation Committee.
Although the Performance-Linked Share-Based Remuneration Plan for corporate officers isbasically the same, the performance indicators and targets at the start of the performance evaluation
period and the payment rate at the end of the performance evaluation period are determined by the
representative executive officer.
2) Number of shares granted during the year and fair value at grant date
The weighted average fair value at the grant date under this plan for the years ended March 31, 2021
and 2022 were ¥1,824 and ¥1,947, respectively.
The number of shares delivered correspond to the directors’ standard variable remuneration
calculated based on their position and adjusted within the predetermined range based on the degreeof attainment, as of the end of the three fiscal years, of predetermined performance targets set by theCompensation Committee or representative executive officer as described above in (3) 1).
(4) Subsequent Grant-type Restricted Stock Compensation Plan
1) Overview of Subsequent Grant-type Restricted Stock Compensation Plan
The Subsequent Grant-type Restricted Stock Compensation Plan is for the Company’s directors,
executive officers and corporate officers.
Under the Subsequent Grant-type Restricted Stock Compensation Plan for directors, executive
officers and corporate officers the number of units for shares of common share delivered isdetermined based on the amount of basic compensation, etc. in advance at the beginning of thetransfer restriction period, and the eligible persons transfer all their rights to monetary remuneration
receivable according to that number of units after the end of the transfer restriction period as in-kindproperty contributions and receive newly issued shares of the Company’s common shares.
For directors who live in Japan, the transfer restrictions are lifted when the directors retire, in
principle. For executive officers and corporate officers, the transfer restriction period is three years.
Directors who do not live in Japan are subject to a standard transfer restricted period for their area ofresidence.
2) Number of shares granted during the year and fair value at grant date
The weighted average fair value at the grant date under this plan for the years ended March 31, 2021
and 2022 were ¥1,939 and ¥2,160, respectively.
As for the number of shares, the Company’s common shares determined by the Company in advanceare delivered after the end of the transfer restriction period as stated in (4) 1) above.

49

(5) Share-based Payment Expenses
Millions of yen
2021

2022

Selling, general and administrative expenses

¥175

¥400

28. Revenue(1) Disaggregation of Revenue
The organization of the Olympus Group basically consists of the Endoscopic Solutions Business,
Therapeutic Solutions Business, Scientific Solutions Business, and Others. Revenue recorded in thesebusiness segments is stated as revenue, as these segments are the units for which separate financial
information is available and according to which reporting is periodically conducted to decide how toallocate management resources and assess business performance. Revenue is geographicallydisaggregated based on customer location. Geographically disaggregated revenue attributable to thereportable segments was as follows.
From the three months ended June 30, 2021, bronchoscopes, which were previously included in the
Endoscopic solutions segment, were transferred to the Therapeutic solutions segment, for the purpose ofstrengthening business in the respiratory area. Segment information for the fiscal year ended March 31,
2021, has been reclassified and restated based on the new reporting segment classification.
Millions of yen
For the year ended March 31, 2021

Japan
North America
EuropeChina
Asia and Oceania
OthersTotal
Revenue from contracts with customers
Revenue from other sources
Note:

Endoscopic
Solutions

Therapeutic
Solutions

Scientific
Solutions¥60,148
132,506
101,11160,07332,593
7,233¥41,541
78,92559,18530,982
18,293
2,916¥14,798
25,384
19,132
19,277
12,452
4,818¥6,967
164
1,799
22
225
0

¥123,454
236,979
181,227
110,354
63,563
14,967¥393,664¥231,842¥95,861¥9,177¥730,544

346,230
47,434

223,033
8,809

95,132
729

9,177
–

673,572
56,972

Revenue from other sources includes revenue from lease contracts as defined under IFRS 16.

50

Others

Total

Millions of yen
For the year ended March 31, 2022

Japan
North America
EuropeChina
Asia and Oceania
OthersTotal
Revenue from contracts with customers
Revenue from other sources
Note:

Endoscopic
Solutions

Therapeutic
Solutions

Scientific
Solutions¥65,908
161,066
117,045
68,29939,6629,567¥44,988
100,074
72,78932,651
21,1493,935¥16,732
32,09023,492
24,432
16,3805,979¥7,569
211
4,532
24
293
0

¥135,197
293,441
217,858
125,406
77,484
19,481¥461,547¥275,586¥119,105¥12,629¥868,867

409,183
52,364

269,092
6,494

118,657
448

12,629-809,561
59,306

OthersTotal

Revenue from other sources includes revenue from lease contracts as defined under IFRS 16.

1) Endoscopic Solutions Business
The Endoscopic Solutions Business sells medical devices, including gastrointestinal endoscopes andsurgical endoscopes, as well as provides medical services such as lease and repair for these products,
to customers who are primarily medical institutions in Japan and overseas.
The Company recognizes related product sales as revenue once control of the product has
transferred to the customer—i.e., when the product is delivered to the customer—because that iswhen legal title to and physical possession of the product and the significant risks and rewards ofownership of the product transfer to the customer and also when the Company gains the right toreceipt of payment from the customer. Revenue from these product sales is measured at thetransaction price contractually agreed upon with the customer. The transaction consideration ismostly received within one year from the fulfillment of the specific performance obligations. Suchproduct sales do not involve a significant financing component. For transactions comprisingmultiple components such as products and maintenance services, the Company treats eachconstituent component as a separate performance obligation if every product sold, service provided
and other component individually has independent value. In such cases, the total transaction
consideration is allocated proportionally to the transaction’s constituent components based on theirstandalone sales prices.
For maintenance contracts related to medical equipment, since performance obligations are satisfied
over time, the transaction amount associated with the contract with the customer is recognized asrevenue evenly over the contract’s term. In such cases, transaction consideration is generally
received as a single prepayment at the contract’s inception.
Leasing transactions as lessor involving medical equipment are accounted for in the manner
described in Note 3 “Significant accounting policies (10) Leases.” Lease payments associated withlease contracts are received in accord with payment terms stipulated in individual contracts.
2) Therapeutic Solutions Business
The Therapeutic Solution Business sells medical devices, including gastroenterology devices,
urology products, respiratory products, energy devices, ENT products, and gynecology products, tocustomers who are primarily medical institutions in Japan and overseas.
The Company recognizes related product sales as revenue once control of the product has
transferred to the customer–i.e., when the product is delivered to the customer—because that iswhen legal title to and physical possession of the product and the significant risks and rewards ofownership of the product transfer to the customer and also when the Company gains the right toreceipt of payment from the customer. Revenue from these product sales is measured at thetransaction price contractually agreed upon with the customer. The transaction consideration ismostly received within one year from the fulfillment of the specific performance obligations. Suchproduct sales do not involve a significant financing component.

513) Scientific Solutions Business
The Scientific Solutions Business sells biological microscopes, industrial microscopes, industrial
endoscopes, non-destructive testing equipment and X-ray fluorescence (XRF) analyzers among
other products. Its main customers include domestic and overseas research and medical institutions.
The Company recognizes related product sales as revenue once control of the product has
transferred to the customer—i.e., when the product is delivered to the customer–because that iswhen legal title to and physical possession of the product and the significant risks and rewards ofownership of the product transfer to the customer and also when the Company gains the right toreceipt of payment from the customer. Revenue from these product sales is measured at thetransaction price contractually agreed upon with the customer. The transaction consideration ismostly received within one year from performance obligations’ fulfillment. Such product sales do
not involve a significant financing component.
For maintenance contracts for the Scientific Solutions Business products, since performanceobligations are satisfied over time, the transaction amount associated with the contract with thecustomer is recognized as revenue evenly over the contract’s term. In such cases, the transaction
consideration is generally received as a single prepayment at the contract’s inception.
4) Others“Others” includes R&D and discovery activities related to new businesses, in addition to sales ofbiomedical materials and orthopedic equipment, etc.
(2) Contract balances
The balances of receivables from contracts with customers, and contract assets and contract liabilities
were as follows:
For the year ended March 31, 2021
Millions of yen
April 1, 2020
Receivables from contracts with customers
Contract assets
Contract liabilities

March 31, 2021

¥121,174367
34,480¥131,127436
44,923For the year ended March 31, 2022
Millions of yen
April 1, 2021
Receivables from contracts with customers
Contract assets
Contract liabilities¥131,127436
44,923

March 31, 2022
¥145,912
728
53,650On the consolidated statement of financial position, receivables from contracts with customers andcontract assets are recognized in trade and other receivables, and contract liabilities are recognized inother current liabilities and other non-current liabilities.
Contract assets are related to consideration for performance that has been completed but not been
charged on the reporting date. Contract assets are reclassified to receivables when the right to payment
becomes unconditional. Contract liabilities are advances from customers who first made some or all of
the payment even though service had not yet been provided to the customer, primarily for maintenancecontracts.
For revenue recognized for the years ended March 31, 2021 and 2022, amounts corresponding tocontract liabilities at the beginning of each fiscal year were ¥30,629 million and ¥41,702 million,
respectively. For the years ended March 31, 2021 and 2022, revenue recognized from performanceobligations satisfied (or partially satisfied) in past periods was not material.

52

(3) Transaction price allocated to remaining performance obligations
The breakdown of transaction price allocated to the remaining performance obligations was as follows:
The Company has applied the practical expedient and does not disclose transactions of which the
expected contract period is within one year or less.
Millions of yen
2021

2022

Within 1 year
Over 1 year

¥10,771
7,097¥13,670
9,594

Total

¥17,868¥23,264

29. Selling, General and Administrative Expenses
Major items of selling, general and administrative expenses for the years ended March 31, 2021 and 2022
were as follows:
Millions of yen
2021
Personnel expenses (Note)
Depreciation
Advertising and promotion expenses
Note:¥213,793
31,543
11,7462022¥227,191
34,193
15,173

Personnel expenses mainly include wages, bonuses, legal welfare expenses, expenses related to post-employment benefits, andpersonnel expenses incurred by the development division.

30. Other Income and Other Expenses(1) Other income
Major items of other income are as follows.
Fiscal year ended March 31, 2021 (April 1, 2020 - March 31, 2021)(Government subsidies)
The Company recorded proceeds from government subsidies of ¥2,388 million in “Other income.” Thegovernment subsidies are the grants from the national government or, municipalities, and the like due tothe spread of COVID-19.
(Reversal of allowance for doubtful accounts)
The Company recorded reversal of allowance for doubtful accounts of ¥1,359 million in “Other
income.”(Subsidiary share transfer)
The Company transferred all shares of OLYMPUS-RMS CORP., a consolidated subsidiary of theCompany, and recorded a gain of ¥1,770 million in “Other income.”
Fiscal year ended March 31, 2022 (April 1, 2021 - March 31, 2022)(Gain on step acquisition)
The Company recorded gain on step acquisition of ¥2,826 million in “Other income” due to theacquisition of Medi-Tate Ltd. For details on said business combinations, please see Note “40. Business
Combinations.”(Gain on sale of fixed assets)
The Company recorded gain on sale of fixed assets of ¥1,393 million in “Other income.”

53

(Partial reversal of provision for indirect taxes of consolidated subsidiaries)
Of the tax provision recorded in the fiscal year ended March 31, 2019 in anticipation of additional
collection related to the independent investigation conducted by the Company’s foreign subsidiaries
regarding indirect taxes, ¥3,596 million, which is no longer expected to be incurred in the current fiscal
year, is recorded under “Other income.”(Change in fair value of contingent consideration, which is a portion of acquisition consideration)¥1,249 million was recorded in “Other income” due to the change in the fair value of the contingent
consideration, which is a portion of the acquisition consideration of Veran Medical Technologies, Inc.
For details on change in fair value, please see Note “40. Business Combinations.”(2) Other expenses
Major items of other expenses are as follows.
Fiscal year ended March 31, 2021 (April 1, 2020 - March 31, 2021)(Business restructuring expenses)
The Company recorded ¥6,614 million for the cost related to promotion of the business transformation
plan “Transform Olympus” in “Other expenses.”
The Company recorded ¥5,156 million in “Other expenses” for the costs incurred to establish andtransfer a new company due to the divestiture of the Imaging Business that aims at promoting selectionof and concentration on the business portfolio of the Company.
(Implementation of career support for external opportunity)
The Company recorded ¥11,866 million in “Other expenses” for the costs incurred in the provision of
special additional payment and re-employment support through career support for external opportunity
implemented by the Company and its Group companies in Japan.
Fiscal year ended March 31, 2022 (April 1, 2021 - March 31, 2022)(Business restructuring expenses)
The Company recorded ¥9,380 million for the cost related to promotion such as the business
transformation plan “Transform Olympus” in “Other expenses.”
The Company recorded ¥9,353 million in “Other expenses” as expenses related to the spin-off of the
Scientific Business, which was carried out for the purpose of establishing a globally integrated businessstructure that matches the nature of the business and a management structure that facilitates flexible andswift decision making.
(Impairment losses)
The Company recognized impairment losses of ¥1,630 million on development assets in the endoscopebusiness, which were written down to their recoverable amount since the Company no longer expects
them to generate the expected earnings at the time of acquisition due to such factors as changes in themarket environment, and recorded the losses in “Other expenses.”54

31. Finance Income and Finance Costs
The breakdown of finance income and finance costs for the years ended March 31, 2021 and 2022 was asfollows:
Millions of yen
2021
Finance income
Interest income
Financial assets measured at amortized cost
Dividends received
Financial assets measured through other comprehensive income
Other
Total
Finance costs
Interest expense
Financial liabilities measured at amortized cost
Bond interest
Financial liabilities measured at amortized cost
Foreign exchange loss (Note 1)
Other
Total
Notes: 1.
2.

2022

¥817

¥1,017

352
24

167
172

¥1,193¥1,356

3,597

4,311

391
2,098
282
¥6,368554
158
358¥5,381

Valuation gains or losses on currency derivatives that are not designated as hedges are included in foreign exchange gain orloss.
Fee income and expenses arising financial assets measured at amortized cost are immaterial.

5532. Earnings per Share(1) Basic earnings per share and diluted earnings per share
Yen
2021
Basic earnings per share
Continuing operations
Discontinued operations
Basic earnings per share
Diluted earnings per share
Continuing operations
Discontinued operations
Diluted earnings per share2022¥51.03(40.98)10.05¥90.22–90.22¥51.00(40.96)10.04¥90.17–90.17(2) Basis for calculating basic earnings per share and diluted earnings per share
Millions of yen
2021

2022

Profit used to calculate basic earnings per share and diluted earnings per share
Profit attributable to owners of parent
Profit not attributable to owners of parent¥12,918–¥115,742–

Profit used to calculate basic earnings per share

12,918

115,742

Continuing operations
Discontinued operations
Adjustment to profit

65,599(52,681)–

115,742––

Profit used to calculate diluted earnings per share
Continuing operations
Discontinued operations

12,91865,599(52,681)

115,742
115,742–

Weighted average number of shares of common stock used to calculate basic earnings per share and diluted earnings per share
Thousand shares
2021
Average number of shares during the period
Increase in number of shares of common stock
Increase due to exercise of subscription rights to shares
Increase due to common stock relating to subsequent
grant-type restricted share-based remuneration
Average number of shares of diluted common stock during
the period

56

2022
1,285,607

1,282,920

536

480

71

203

1,286,214

1,283,603

33. Other Comprehensive Income
The breakdown of each component of other comprehensive income (including non-controlling interests) for
the years ended March 31, 2021 and 2022 was as follows:
Millions of yen
2021
Items that will not be reclassified to profit or loss
Financial assets measured at fair value through other comprehensive
incomeAmount arising during the year
Tax effectFinancial assets measured at fair value through othercomprehensive income
Remeasurements of defined benefit plans
Amount arising during the year
Tax effect¥3,914(1,288)¥2,626¥(3,498)
2,572

2022

¥(481)(205)¥(686)¥8,047(2,735)Remeasurements of defined benefit plans¥(926)

5,312

Total of items that will not be reclassified to profit or loss

¥1,700¥4,626

Items that may be reclassified to profit or loss
Exchange differences on translation of foreign operations
Amount arising during the year
Reclassification adjustments
Before tax effectTax effect¥21,736
202
21,938–¥42,407–42,407–¥21,938¥42,407

¥(28)
271
243
(74)

¥1,622(4,727)(3,105)951¥169¥(2,154)

¥(55)
–
¥(55)
–

¥152
–
¥152
–

Exchange differences on translation of foreign operations
Cash flow hedges
Amount arising during the year
Reclassification adjustments
Before tax effectTax effectCash flow hedges
Share of other comprehensive income (loss) of associates accounted
for using equity method
Amount arising during the year
Reclassification adjustments
Before tax effectTax effect
Share of other comprehensive income (loss) of associates
accounted for using equity method

¥(55)

¥152

Total of items that may be reclassified to profit or loss

¥22,052¥40,405

Total other comprehensive income¥23,752¥45,03157

34. Cash Flow Information(1) Non-cash transactions
The major non-cash transactions are follows:
Millions of yen
2021
Right-of-use assets acquired through lease transactions

2022¥39,644¥16,116(2) Liabilities arising from financing activities
The changes in liabilities arising from financing activities were as follows:
Millions of yen
For the year ended March 31, 2021

Beginningbalance

Short-term borrowings
Bonds (Note)
Commercial papers
Long-term borrowings (Note)
Lease liabilities(Note)
Note:

Movement due
to cash inflows/
outflows from Increase due tofinancingnew leaseactivities

Non-cash items
Exchangedifferences ontranslation offoreign
operations

EndingbalanceOther¥10,135
69,73760,000141,043¥(7,721)49,757(60,000)
88,624

¥–
–
–
–

¥(25)
–
–
118

¥3,069102–425¥5,458
119,596–
230,210¥41,743¥(16,188)¥39,644

¥443

¥765

¥66,407

Balances redeemable within one year are included.
Millions of yen
For the year ended March 31, 2022

Beginningbalance

Short-term borrowings
Bonds (Note)
Long-term borrowings (Note)
Lease liabilities(Note)
Note:

Movement due
to cash inflows/
outflows from Increase due tofinancingnew leaseactivities

Non-cash items
Exchangedifferences ontranslation offoreign
operations

EndingbalanceOther¥5,458
119,596
230,210¥(5,454)
56,143(26,246)

¥–
–
–

¥78
–
1,349

¥(15)
4,583
425

¥67
180,322205,738¥66,407¥(17,691)¥16,116¥787¥(604)¥65,015

Balances redeemable within one year are included.

(3) Payments for acquisition of business
There is no income or expenses from significant business acquisitions during the fiscal years ended
March 31, 2021 and 2022.
(4) Payments for acquisition of subsidiaries
A reconciliation of the consideration paid for the acquisition of subsidiaries and payments foracquisition was as follows:
Millions of yen
2021

2022

Consideration for acquisitions paid in cash
Cash and cash equivalents of assets acquired, at the time the Olympus
Group obtained control of the subsidiaries¥45,472¥23,222(931)(1,385)

Payments for acquisition of subsidiaries¥44,541¥21,83758

(5) Loss of control
For the year ended March 31, 2021
1) Divestiture of Imaging Business(i)

Overview of transaction
Based on the share transfer agreement concluded with OJ Holdings, Ltd., a special purpose
company established by Japan Industrial Partners, Inc. on September 30, 2020, the Company
completed the transfer of 95% of its shares held in OM Digital Solutions Corporation (95% of
total issued shares) on January 1, 2021. As a result of this transfer, the Company has lost
control of OM Digital Solutions Corporation.

(ii) Assets and liabilities associated with the loss of control
Millions of yen
AmountCash and cash equivalents
Other current assets
Non-current assets¥24,266282
479

Total assets¥25,027

Current liabilities
Non-current liabilities

24,783244

Total liabilities¥25,027(iii) Cash flows associated with the loss of control
Millions of yen
AmountCash and cash equivalents received as consideration of theloss of control
Expenses related to sale of businesses
Cash and cash equivalents of subsidiaries with the loss ofcontrol
Payments for sale of businesses (Note)
Note:

¥0
(3,564)(24,266)¥(27,830)

Payments for sale of businesses are included in “Cash flows from investing activities” in the Consolidated Statementof Cash Flows.

(iv) Gain or loss associated with the loss of control
The Company recorded a loss of ¥44,794 million associated with the loss of control under“Loss from discontinued operations” in the consolidated statement of profit or loss. Details on
said loss on sale of business are as described in Note “41. Discontinued Operations.”(Divestiture of significant operations)(i)

Overview of transaction
The Company concluded an agreement with Nissha Co., Ltd. (hereinafter “NISSHA”) on
August 6, 2020 for the transfer of the Norwalk facility (hereinafter “Said Facility”), one of the
manufacturing plants in the United States for therapeutic devices under Olympus SurgicalTechnologies America, to Nissha Medical Technologies, a wholly owned subsidiary of
NISSHA. The transfer of Said Facility was completed on November 2, 2020, and the Company
lost its control of Said Facility.

59

(ii) Assets and liabilities associated with the loss of control
Millions of yen
AmountCurrent assets
Non-current assets

¥860
1,488

Total assets¥2,348(iii) Cash flows associated with the loss of control
Millions of yen
AmountCash and cash equivalents received as consideration of
the loss of control
Cash and cash equivalents of businesses with the loss ofcontrol¥2,121–

Proceeds from sale of businesses (Note)
Note:¥2,121

Proceeds from sale of businesses are included in “Cash flows from investing activities” in the Consolidated
Statement of Cash Flows. The total transfer price is US$30 million, and of this amount, the consideration planned tobe received from the next fiscal year onward is not included in the figures above.

(iv) Gain or loss associated with the loss of control
The Company recorded a gain of ¥486 million associated with the loss of control of Said
Facility under “Other income” in the consolidated statement of profit or loss.
(Transfer of OLYMPUS-RMS CORP.)(i)

Overview of transaction
The Company concluded an agreement to transfer all shares of OLYMPUS-RMS CORP., aconsolidated subsidiary of the Company, to ROHTO Pharmaceutical Co., Ltd. and completed
the transfer procedures on March 23, 2021. As a result, the Company lost control of
OLYMPUS-RMS CORP. on the same day.

(ii) Assets and liabilities associated with the loss of control
Millions of yen
AmountCurrent assets
Non-current assets¥418
6

Total assets¥424

Current liabilities
Non-current liabilities

572–

Total liabilities¥572(iii) Cash flows associated with the loss of control
Millions of yen
AmountCash and cash equivalents received as consideration of theloss of control
Cash and cash equivalents of subsidiaries with the loss ofcontrol
Proceeds from sale of subsidiaries (Note)
Note:¥1,622(294)¥1,328Proceeds from sale of subsidiaries are included in “Cash flows from investing activities” in the Consolidated
Statement of Cash Flows.

60

(iv) Gain or loss associated with the loss of control
The Company recorded a gain of ¥1,770 million associated with the loss of control of
OLYMPUS-RMS CORP. and is included in “Other income” in the consolidated statement of
profit or loss.

For the year ended March 31, 2022
(Transfer of Olympus Systems Corporation)(i)

Overview of transaction
The Company concluded an agreement to transfer all shares of Olympus Systems Corporation,a consolidated subsidiary of the Company, to Accenture Japan Ltd on May 28, 2021 andcompleted the transfer procedures on August 31, 2021. As a result of this, the Company lost its
control of Olympus Systems Corporation on the same day.

(ii) Assets and liabilities associated with the loss of control
Millions of yen
AmountCurrent assets
Non-current assets

¥783
414

Total assets¥1,197

Current liabilities
Non-current liabilities

569
507

Total liabilities¥1,076(iii) Cash flows associated with the loss of control
Millions of yen
AmountCash and cash equivalents received as consideration of theloss of control
Cash and cash equivalents of subsidiaries with the loss ofcontrol
Proceeds from sale of subsidiaries (Note)
Note:

¥726
(2)
¥724

Proceeds from sale of subsidiaries are included in “Cash flows from investing activities” in the Consolidated
Statement of Cash Flows.

(iv) Gain or loss associated with the loss of control
The Company recorded a gain of ¥605 million associated with the loss of control of Olympus
Systems Corporation and is included in “Other income” in the consolidated statement of profit
or loss.

61

35. Financial Instruments(1) Credit risk
Credit risk is the risk that a counterparty may default on its contractual obligations resulting in afinancial loss for the Olympus Group.
The Olympus Group is mainly exposed to the credit risk of customers and business counterparts onfinancial assets measured at amortized cost and of financial institutions that are counterparties toderivatives held for hedging foreign currency fluctuations and other financial risks.
The Olympus Group manages credit risk pertaining to financial assets measured at amortized cost byconducting credit investigations on major external customers and controls of due dates and outstandingbalances by customers in accordance with internal regulations, while promptly identifying doubtful
accounts caused by deteriorated financial conditions, etc., to reduce risks. Credit risk associated with
derivatives is reduced by limiting transactions to highly creditworthy financial institutions.
Financial assets measured at amortized cost are mainly classified into “trade receivables” that consist ofnotes receivable, accounts receivable and lease receivables and “receivables other than tradereceivables.” The Olympus Group provides allowance for doubtful accounts for each receivable asfollows.
“Trade receivables” are classified into three categories: receivables to “debtors that are not facing
serious problems in their management conditions,” receivables to “debtors that are facing serious
problems in repaying their debts,” and receivables to “debtors that are bankrupt,” according to thedebtors’ management and financial conditions at the end of the reporting period. Allowance for doubtful
accounts is always recognized at an amount equal to expected credit losses for the remaining life of theassets for each category.
“Debtors that are not facing serious problems in their management conditions” refer to those that haveno indication of problems in repaying their debts and no problems in ability to repay their debts.
Allowance for doubtful accounts on receivables from the debtors in this category is recorded
collectively using a provision ratio based on a historical loan loss ratio and future estimates.
“Debtors that are facing serious problems in repaying their debts” refer to those that are not in a state ofbankrupt but are facing, or will likely face, serious problems in repaying their debts. Allowance for
doubtful accounts on receivables from the debtors in this category is recorded based on the estimatedcollectable amount of the respective assets on an individual basis.
“Debtors that are bankrupt” refer to those that are legally or substantially bankrupt or in a state ofserious financial difficulty with no prospect of revitalization. Allowance for doubtful accounts onreceivables from the debtors in this category is recorded for all receivables excluding assets received ascollateral or for credit enhancement.
The Olympus Group evaluates at the end of each reporting period whether there is a significant increasein credit risk of “receivables other than trade receivables” since initial recognition. When there is no
significant increase in credit risk since initial recognition, the amount equal to expected credit losses for
12 months is recognized as allowance for doubtful accounts. When there is a significant increase incredit risk since initial recognition, the amount equal to expected credit losses for the remaining life of
the financial assets is recognized as allowance for doubtful accounts.
“A significant increase in credit risk” refers to a situation in which there are serious problems incollectibility of receivables at the end of the reporting period compared to that at the initial recognition.
When evaluating whether or not there is a significant increase in credit risk, the Olympus Group takes
into consideration reasonably available and supportable information, such as a debtor’s results ofoperations for past periods and management improvement plan, as well as past due information.
Allowance for doubtful accounts on “receivables other than trade receivables” is recognized using amethod to estimate credit losses collectively or individually according to the extent of the debtor’s
credit risk. However, when the debtors are in serious financial difficulty or legally or substantiallybankrupt, allowance for doubtful accounts is recognized using a method to estimate credit losses
individually by considering the receivables as credit-impaired financial assets.

62

Irrespective of the above classification, when it is clear that a financial asset in its entirety or a portion
thereof cannot be recovered, such as a legal extinguishment of receivables, the carrying amount of thefinancial asset is directly amortized.
Information on allowance for doubtful accounts
The carrying amounts of financial assets subject to allowance for doubtful accounts were as follows:
These carrying amounts represent the maximum amount of exposure to credit risk.
Millions of yen
Trade receivables
Balance at March 31, 2021
Balance at March 31, 2022

Debtors that are notfacing serious problems
in their management
conditions¥179,320¥199,234

Debtors that are facing
serious problems inrepaying their debts

Debtors that arebankrupt¥4,470¥3,928

Total

¥418
¥364

¥184,208¥203,526

There was no significant change that had a material impact on allowance for doubtful accounts for“Trade receivables” as of March 31, 2021 and 2022.
Millions of yen
Receivables other than tradereceivables
Balance at March 31, 2021
Balance at March 31, 2022

No significant increasein credit risk
¥24,108¥26,502

Significant increase in credit risk
Non-credit-impaired
financial assets¥6,783¥6,924

Total

Credit-impaired
financial assets
¥584
¥604

¥31,475¥34,030

There was no significant change that had material impacts on allowance for doubtful accounts for“Receivables other than trade receivables” as of March 31, 2021 and 2022.
The changes in allowance for doubtful accounts related to above financial assets were as follows:
Millions of yen
Receivables other than trade receivables
Trade receivables

No significant increasein credit risk

Significant increase in credit risk
Non-credit-impaired
financial assets

Credit-impaired
financial assets

Balance at April 1, 2020

¥7,444¥0¥8,225¥517

Increase
Decrease
Other382(2,228)
274

0
(0)
–

–
(1,442)–

17–
50

Balance at March 31, 2021

¥5,872¥0¥6,783

¥584

179
(860)
55

84
(32)
0

79
(9)
–

–
(0)
20

¥5,246¥52¥6,853¥604

Increase
Decrease
Other
Balance at March 31, 2022

(2) Liquidity risk
Liquidity risk is the risk that the Olympus Group may not be able to repay borrowings or settle otherfinancial liabilities on their due dates.
Borrowings, bonds and other financial liabilities held by the Olympus Group are exposed to liquidity
risk. Based on the report from each division, the finance division of the Olympus Group prepares andupdates its cash flow plans on a timely basis and keeps its liquidity in hand over a certain ratio ofconsolidated revenue in order to manage liquidity risk.

63

Major financial liabilities by maturity date are as follows. Trade and other payables are not included in
the tables below as they are settled within one year and their contractual cash flows are nearly equal tothe carrying amount.
As of March 31, 2021
Millions of yen
Contractual cash flows

Carrying amountNon-derivative financial
liabilities
Bonds and borrowings
Lease liabilities
Derivative financial liabilities
Currency derivatives
Interest rate derivatives

Total

Within 1 year

Over 1 year

¥355,264
66,407¥364,972
77,256¥33,462
16,617¥331,510
60,639

1,967
¥500

1,967
¥499

1,821
¥184

146
¥315

As of March 31, 2022
Millions of yen
Contractual cash flows

Carrying amountNon-derivative financial
liabilities
Bonds and borrowings
Lease liabilities
Derivative financial liabilities
Currency derivatives
Currency derivatives

Total

Within 1 year

Over 1 year

¥386,127
65,015¥400,462
73,246¥55,036
16,498¥345,426
56,748

3,752
¥285

4,086
¥285

3,912
¥81

174
¥204

The Olympus Group does not expect the cash flows included in the maturity analysis to occur muchearlier than anticipated or to differ significantly from the anticipated monetary amounts.
(3) Market risk
Market risk is the risk of fluctuations in fair value or future cash flows of financial instruments becauseof changes in market prices. Market risk includes foreign exchange risk which arises from changes inforeign exchange rates, interest rate risk which arises from changes in market interest rates and market
price fluctuation risk which arises from changes in market prices of listed shares.
1) Foreign exchange risk
The Olympus Group operates business activities worldwide. Accordingly, financial assets andliabilities arising from transactions denominated in currencies other than the functional currency are
exposed to foreign exchange rate fluctuation risk. The Olympus Group mainly uses foreignexchange forward contracts and currency swaps to reduce the foreign exchange fluctuation risk.

64

(i)

Foreign exchange forward contracts and currency swaps
The details of foreign exchange forward contracts and currency swaps were as follows:
Millions of yen
2021

Foreign exchange forward contracts:
U.S. dollar
Other currency
Currency swaps
Receive other currencies / pay Euro
Receive Euro / pay other currencies
Receive U.S. dollar / pay Japanese yen
Total

2022

Contract amount

Fair value

Contract amount

Fair value¥96,391
18,36478,027
20,68920,235454–¥(1,050)
(579)
(471)
51
54
(3)
–

¥115,534
72,30743,227
87,91026,537
178
61,195¥(3,063)(1,773)(1,290)
1,185
(121)
(0)
1,306

¥117,080¥(999)¥203,444¥(1,878)(ii) Sensitivity analysis of currency fluctuation risk
The following table illustrates the impact on profit before tax in the consolidated statement of
profit or loss from financial instruments held by the Olympus Group at the end of each fiscal
year if the Japanese yen appreciated by 1 Japanese yen against the U.S. dollar and the Euro.
This analysis assumes that all other variables are held constant.
Millions of yen
2021
U.S. dollar
Euro¥(445)¥(103)

2022¥(209)¥(162)

2) Interest rate risk
The Olympus Group’s exposure to interest rate risk mainly relates to debt such as borrowings andbonds. Because the amount of interest is affected by fluctuations in market interest rates, theOlympus Group is exposed to interest rate risk of fluctuations in future cash flows of interest.
Mainly to limit an increase in the amount of interest paid in the future due to a rise in interest rates,
the Olympus Group raises funds by procuring fixed rate long-term borrowings and issuing bonds atfixed interest rates. If funds are procured through long-term borrowings at a variable interest rate,
the Olympus Group endeavors to stabilize cash flows by entering into an interest rate swap contract
to receive a variable interest rate and pay a fixed interest rate with financial institutions and virtually
fixing the borrowing rate.
In the fiscal year ended March 31, 2021, the Olympus Group borrowed ¥100 billion as businessfinancing and long-term working capital in view of the impact of the spread of COVID-19 on
operating results. Of this amount, ¥50 billion was procured at a variable interest rate and no interest
rate swap contract has been concluded. Therefore, the Olympus Group is exposed to interest raterisk of fluctuations in future cash flows of interest. The Olympus Group retains cash and cash
equivalents exceeding the variable interest bearing debts, and if the interest rate rises due to changes
in the market environment, it mitigates interest rate risk by reducing the interest bearing debts using
these funds, and other means.
Interest rate sensitivity analysis
As for borrowings with variable interest rates held by the Olympus Group at the end of the fiscal
year, the amount of effects on profit before tax in the consolidated statement of profit or loss in theevent of a 1% increase in interest rates at the end of the fiscal year is as follows. This analysis
calculated the amount of effects by multiplying the balance of borrowings with variable interest
rates at the end of the fiscal year by 1%. The analysis excludes borrowings with variable interest
rates of which interest rates have been fixed by interest rate swap agreements.

65Millions of yen
2021
Consolidated statement of profit or loss (Profit before tax)

2022¥(498)¥(498)

3) Market price risk
The Olympus Group holds listed shares for strategic investment purposes, including facilitating
business alliances. Market prices of listed shares may fluctuate depending on market economy
trends as the prices are determined based on market principles. For listed shares, the Olympus Groupregularly checks market prices and the financial status of issuers (business counterparts), while
reviewing holding positions continuously in consideration of relationships with businesscounterparts.
Sensitivity analysis of market price risk
With regard to listed shares held by the Olympus Group at the end of each fiscal year, the following
table shows the impact on other comprehensive income (before tax effect) in the consolidated
statement of comprehensive income that would result from 1% decline in market prices at the end ofeach fiscal year. The impact was calculated by multiplying listed shares at the end of each fiscal year
by 1% for this analysis.
Millions of yen
2021
Other comprehensive income (before tax effect)¥(103)

2022¥(15)(4) Fair value
1) Fair value hierarchy
Fair value hierarchy is categorized into the following three levels depending on the observability of
inputs used in the valuation technique for the measurement.
Level 1: Fair value measured at market prices (unadjusted) in active markets for identical assets or
liabilities
Level 2: Fair value measured using observable prices other than those categorized within level 1,
either directly or indirectly
Level 3: Fair value measured using a valuation technique which includes inputs that are not based on
observable market data
The Olympus Group recognizes transfers of financial instruments between the levels of the fairvalue hierarchy as if they occurred at the end of each fiscal year. There were no significant financial
instruments transferred between the levels for the fiscal years ended March 31, 2021 and 2022.
2) Financial instruments measured at fair value
The methods for measuring major financial instruments measured at fair value are as follows.
(Other financial assets and other financial liabilities)
Listed shares are classified as level 1 and stated at market prices valued at the end of each fiscal
year.
Unlisted shares are classified as level 2 or level 3 and stated at the value obtained by using valuation
techniques such as the comparable company analysis method.
Derivative assets and liabilities are classified as level 2. Currency derivatives are stated at the value
based on forward exchange rates, and interest-rate derivatives are stated at the value obtained basedon observable data such as market interest rates, credit risks, and the period up to maturity.
The contingent consideration for business combinations, etc., is classified as level 3 and stated at theestimates of future payability.

66

The fair value hierarchy of financial instruments measured at fair value is as follows:
As of March 31, 2021
Millions of yen
Level 1
Financial assets
Financial assets measured at fair value throughprofit or loss
Derivative assets
Equity securities and others
Financial assets measured at fair value throughother comprehensive income
Equity securities
Financial liabilities
Financial liabilities measured at fair value
through profit or loss
Derivative liabilities
Contingent consideration

Level 2

Level 3

Total

–
–

¥968
–

–
¥1,495¥968
1,495¥10,327–853

11,180––¥2,467––¥3,6082,467¥3,608

As of March 31, 2022
Millions of yen
Level 1
Financial assets
Financial assets measured at fair value
through profit or loss
Derivative assets
Equity securities and others
Financial assets measured at fair value
through other comprehensive income
Equity securities and others
Financial liabilities
Financial liabilities measured at fair value
through profit or loss
Derivative liabilities
Contingent consideration

Level 2––

Level 3

¥1,874–¥1,532––¥4,037
–

Total

–
¥956

¥1,874
956

2,939

4,471

–
¥6,100

4,037¥6,100The changes in financial assets categorized within level 3 were as follows:
Millions of yen
2021

2022

Balance at April 1
Gains and losses (Note)
Profit or loss
Other comprehensive income
Purchases
Transfer to investments accounted for using the equity method
Other¥1,658¥2,348

11
1
727
–
(48)

(58)
34
1,978
(597)
190

Balance at March 31¥2,348¥3,895

Note:

Gains or losses recognized in profit or loss are included in “Finance income” or “Finance costs” in the consolidated statement of
profit or loss. Gains or losses recognized in other comprehensive income are included in “Financial assets measured at fair value
through other comprehensive income” in the consolidated statement of comprehensive income.

67

Total gains or losses recognized in profit or loss included losses of ¥11 million and gain of ¥136
million on financial instruments held as of the years ended March 31, 2021 and 2022, respectively.
The changes in financial liabilities categorized within level 3 were as follows:
Millions of yen
2021
¥163
3,433
(111)
123
¥3,608

Balance at April 1
Business combinations, etc.
Change in fair value
Other
Balance at March 31

2022¥3,608
2,834
(594)
252
¥6,1003) Financial instruments measured at amortized cost
The measurement techniques for measuring the fair value of major financial instruments measured
at amortized cost are as follows. These financial instruments are mainly classified into level 2.
(Cash and cash equivalents, trade and other receivables, and trade and other payables)
Account items to be settled in the short term are stated at their book value because their fair value isnearly equal to their book value.
Lease receivables are stated at the value obtained by calculating the present value of each leasereceivable, which is categorized by a specific period, using the period up to maturity and a discountrate that takes into account credit risks.
(Other financial assets and other financial liabilities)
Account items to be settled in the short term are stated at their book value because their fair value isnearly equal to their book value.
(Bonds and borrowings)
Bonds and borrowings with fixed interest rates are stated at the value calculated at discounted rates
which would be applied to a similar issuance of bonds or similar new loans to generate future cash
flows.
Borrowings with variable interest rates are stated at their book value because their fair value isdeemed to be nearly equal to their book value, given that they are short-term borrowings reflecting
market interest rates, and their credit conditions have not significantly changed since the drawdown.
Short-term borrowings and commercial papers are stated at their book value since they are settled in
the short term and their fair value is nearly equal to their book value.
The carrying amount and fair value of major financial instruments measured at amortized cost wereas follows. Financial instruments whose carrying amounts approximate fair value are not included in
the following table.

68Millions of yen
2021
Financial assets
Lease receivables
Financial liabilities
Bonds
Borrowings

2022

Carrying amount

Fair value

Carrying amount

Fair value¥45,377¥45,319¥50,517¥50,513

119,596¥155,456

120,070¥157,715

180,322¥145,903

178,341¥146,336

4) Equity instruments
Equity instruments such as shares held mainly for the purpose of maintaining or strengthening
business relationships with the investees are designated as financial assets measured at fair value
through other comprehensive income. The fair values of equity instruments by major issuer were as
follows:
Millions of yen
Issuer

2021

ASAHI INTECC CO., LTD.
USHIO INC.
Mitsubishi UFJ Financial Group, Inc.
Sumitomo Realty & Development Co., Ltd.
OHARA INC.

¥4,119
1,636
1,240
1,113
¥675

Millions of yen
Issuer2022

Noah Medical Corporation
USHIO INC.
OHARA INC.

¥1,836
1,024¥508

The fair value at the date of sale and cumulative gains or losses on sales of equity instruments soldduring the year based on the Company’s policy for equity securities and others held for strategic
investment purposes were as follows:
Millions of yen
Fair value at the date of sale
Cumulative gains or losses on sale

2021

2022

¥7,869¥4,721¥8,280¥4,756The breakdown of dividends received recognized from equity instruments was as follows:
Millions of yen
2021
Equity instruments derecognized during the year
Equity instruments held at the end of year
Total

2022

¥195
157

¥130
37

¥352

¥167

(5) Hedge accounting
The Olympus Group raises a portion of funds through borrowings with variable interest rates and bonds
in foreign currencies with fixed interest rates, and is exposed to interest rate risks and foreign exchangerisks for foreign currency transactions within that scope. The Olympus Group uses interest rate swaps
that virtually converts borrowings with variable interest rates into borrowings with fixed interest rates
and interest rate and currency swaps that virtually converts bonds in foreign currencies with fixedinterest rates into fixed rate bonds denominated in Japanese yen in order to hedge interest rate risk. The
Group applies hedge accounting by designating the interest rate swaps as cash flow hedges.

69

For interest rate swaps, the notional amount, term (maturity) and underlying data for interest rate of thehedging instrument and the hedged item are to be matched, in principle. No ineffective portion wasrecognized as of March 31, 2021 and 2022.
For interest rate and currency swaps, the amount recognized in net gain or loss on the ineffective portionof the hedge for the fiscal year ended March 31, 2022, is not material.
A summary of interest rate swaps and interest rate and currency swaps designated as cash flow hedge
was as follows:
As of March 31, 2021
Millions of yen

Interest rate
swaps

Notional
amountOver 1 year

¥25,000¥10,000

Carrying amount (Note)
AssetsInterest rate

Liabilities

¥–

¥500

Variable rate receipt: 6-month Japanese yen
TIBOR
Fixed rate payment: 1.3815% to 2.040%

As of March 31, 2022
Millions of yen
Carrying amount (Note)

Notional
amountOver 1 year

Interest rate
swaps

¥10,000¥10,000¥–¥285

Variable rate receipt: 6-month Japanese yen
TIBOR
Fixed rate payment: 1.3815%

Interest rateand currency
swaps¥61,195¥61,195¥1,306¥-

Fixed rate receipt: U.S. dollar 2.143%
Fixed rate payment: Japanese yen 0.6975%

Note:

AssetsInterest rate

Liabilities

The amount in the consolidated statement of financial position are recorded in “Other financial assets” or “Other financial
liabilities” of each current and non-current based on their maturity date.

The cash flow hedge reserve (before tax effect) regarding the above table was as follows:
Millions of yen
2021
Interest rate swaps
Interest rate and currency swaps¥(500)¥–

2022¥(285)¥(3,320)

Cash flow hedges recognized in the consolidated statement of comprehensive income and othercomprehensive income (before tax effect) were as follows:
As of March 31, 2021
Millions of yen
Changes in the fair value recognizedin other comprehensive income
Interest rate swaps

¥(28)

70

Amount of reclassification
adjustment from cash flow hedge to
profit or loss (Note)¥271

As of March 31, 2022
Millions of yen
Amount of reclassification
adjustment from cash flow hedge to
profit or loss (Note)

Changes in the fair value recognizedin other comprehensive income
Interest rate swaps
Interest rate and currency swaps
Note:

¥41
¥1,581¥174¥(4,901)

The amounts included in the consolidated statement of profit or loss are recorded in “Finance income” or “Finance costs.”(6) Transfer of financial instruments
Transferred financial assets that are not derecognized in their entirety
The Olympus Group transfers a part of trade receivables to a third party in order to diversify fundraising channels and conduct stable fund procurement. The third party has recourse only to thetransferred assets upon the debtors’ default and cannot claim other assets of the Olympus Group. While
the Olympus Group does not bear bad debt risk on a certain portion of the transferred receivables due toa contract with the third party, the full amount has been recognized in the consolidated statement offinancial position because the financial assets in their entirety do not qualify for derecognition. The
proceeds which arising on the transfer of the assets have been recorded as the associated liabilities andare settled when a payment is made for the transferred assets. The Olympus Group cannot use thetransferred assets until the payment is made.
The carrying amounts of transferred assets and the associated liabilities when the Olympus Group
continues to recognize all of the transferred assets as of March 31, 2021 and 2022 are as follows. They
are recognized in “Trade and other receivables” and “Other financial liabilities,” respectively, in the
consolidated statement of financial position.
Millions of yen
2021

2022

¥2,928
1,996¥4,533
4,533

¥932

¥–

Transferred financial assets
Related liabilities
Net position of transferred financial assets

The fair values are equivalent to the carrying amounts in the above table.
36. Leases(1) Lessor
The Olympus Group leases endoscopes and other equipment under finance leases and also leases
endoscopes and other equipment, and property owned by the Company as operating leases. The
business conditions of the customers, equipment usage, etc. are monitored regularly in order to manage
the risks for the assets
The breakdown of revenue under finance leases was as follows:
Millions of yen
Revenue
Lease income (loss)
Interest income

71

2021

2022

¥7,710¥1,997¥7,971¥2,395

The breakdown of future lease payments receivable under finance leases was as follows:
Millions of yen
Undiscounted lease payments to be received
Within 1 year
More than 1 year, but within 2 years
More than 2 years, but within 3 years
More than 3 years, but within 4 years
More than 4 years, but within 5 years
More than 5 years
Total
Unguaranteed residual value
Unearned finance income
Net investment in the lease

2021

2022

¥22,241
13,001
7,762
3,451
1,539
84

¥24,712
14,666
8,522
3,605
1,107
159

¥48,078¥52,771

1,380(4,081)¥45,377

2,167(4,421)¥50,517

The breakdown of revenue under operating leases was as follows:
Millions of yen
Revenue
Lease income
Variable lease payments (Note)
Note:

2021

2022

¥6,381¥22,110¥26,921¥12,627

Income that is not determined by an index or a rate.

The breakdown of future lease payments receivable under operating leases was as follows:
Millions of yen
2021

2022

Within 1 year

¥17,873¥17,609

More than 1 year, but within 2 years

11,081

11,727More than 2 years, but within 3 years

5,332

6,609

More than 3 years, but within 4 years

2,359

2,568

More than 4 years, but within 5 years

860

602

More than 5 years

451

374

¥37,956¥39,489

Total(2) Lessee
The Olympus Group rents properties and other equipment as lessee.
Certain of the lease transactions have renew/purchase options or escalation clauses, but there are no
significant restrictions on dividends, additional borrowings and additional leases provided by the lease
contracts.
In addition, some lease contracts contain extension options and termination options.
There were no leases that have not yet commenced among lease contracts concluded by the Olympus
Group as of March 31, 2021 and 2022.
The book value of right-of-use assets by type of underlying asset and the increase in right-of-use assets
are described in Note 13 “Property, plant and equipment.”
The total amount of cash outflows related to leases were ¥18,975 million and ¥20,240 million for theyears ended March 31, 2021 and 2022, respectively.

72

The breakdown of lease-related income and expenses for lessee were as follows:
Millions of yen
2021
Revenue from sublease of right-of-use assets
Depreciation of right-of-use assets by underlying asset classLand
Buildings and structures
Machinery and vehicles
Tools, furniture and fixtures
Interest expense under lease obligations
Expenses under short-term leases
Expenses under leases of low-value asset
Note:

¥18

356
8,667
1,048
2,736
1,124
582
¥1,388

360
9,464
2,852
818
1,585
505
¥799

The balance of lease liabilities by date is described in Note “35. Financial Instruments.”

73

2022

¥18

37. Income Taxes(1) Deferred tax assets and liabilities
The breakdown of major deferred tax assets and liabilities by cause was as follows:
Millions of yen
Deferred tax assets
Inventories
Prepaid expenses
Accrued bonuses
Accrued expenses
Unrealized intercompany profits
Depreciation of property, plant and equipment
Amortization of intangible assets
Interest rate swaps
Deferred gains or losses on hedges
Retirement benefit liability
Loss carryforwards
Other
Total
Deferred tax liabilities
Depreciation of property, plant and equipment
Financial assets measured at fair value through other comprehensive
incomeRetirement benefit asset
Fair value differences on acquisition
Capitalized development costs
Retained profit of overseas subsidiaries
Other
Total
Net deferred tax assets

2021

2022

¥5,442
11,099
7,057
5,998
7,123
9,814
3,379
153
–
5,931
18,8309,430¥8,112
16,547
7,704
4,599
11,992
10,037
3,305
87
1,017
6,263
12,8198,803¥84,256¥91,285¥(3,602)¥(5,306)(1,516)(287)(2,158)(8,546)(17,193)(2,318)(5,306)(4,309)(9,773)(18,976)(2,341)(5,597)¥(40,639)¥(46,589)¥43,617¥44,696

As the provisionally measured fair values of the assets acquired and liabilities assumed related to thebusiness combination were revised in the fiscal year ended March 31, 2022, the amount of deferred tax
assets and liabilities at the end of the fiscal year ended March 31, 2021, have been retrospectively
adjusted. For details on retrospective adjustment, please see Note “40. Business Combinations.”
Loss carryforwards, deductible temporary differences and tax credits carried forward for which deferred
tax assets have not been recognized were as follows. The tax base is presented.
Millions of yen
Loss carryforwards
Deductible temporary differences
Tax credits carried forward
Total

2021

2022

¥18,660
29,767842¥5,11727,317718¥49,269¥33,152

Loss carryforwards for which deferred tax assets have not been recognized and expires as follows:
Millions of yen
2021
Within 4th year
5th year and thereafter
Total

2022

¥12,943
5,717

¥–
5,117

¥18,660¥5,117The Company does not recognize deferred tax liabilities for the temporary differences associated with
undistributed profits of subsidiaries when the Company is able to control the timing of the reversal of74

the temporary difference and it is probable that the temporary difference will not reverse in theforeseeable future. Total temporary differences associated with the undistributed profits of subsidiaries
which have not been recognized as deferred tax liabilities (income base) were ¥261,657 million and¥319,744 million as of March 31, 2021 and 2022, respectively.
(2) Income tax expenses
The breakdown of income tax expenses was as follows:
Millions of yen
Current tax expenses (Note 1)
Deferred tax expenses (Notes 2, 3, 4)
Total of income tax expenses
Notes: 1.

2021

2022

¥19,347(8,207)¥37,495(3,592)¥11,140¥33,903

The current tax expense includes tax losses which were previously not recorded, tax credits or benefits resulting from temporary
differences for prior periods. Consequently, the current tax expense for the fiscal years ended March 31, 2021 and 2022
decreased by ¥1,657 million and ¥2,246 million, respectively.
In addition, the current tax expense for the fiscal year ended March 31, 2022 includes the corporation tax for the previous fiscal
year of ¥(1,045) million.

2.

The deferred tax expense includes tax losses which were previously not recorded, tax credits or benefits resulting from
temporary differences for prior periods. Consequently, the deferred tax expense for the fiscal years ended March 31, 2021
and 2022 decreased by ¥557 million and ¥323 million, respectively.

3.

The deferred tax expense includes devaluation of deferred tax assets and the reversal of devaluation of deferred tax assets
which was previously recorded (assessment of recoverability of deferred tax assets). Consequently, the deferred tax
expense for the fiscal years ended March 31, 2021 and 2022 decreased by ¥3,941 million and ¥1,925 million,
respectively.

4.

The deferred tax expense decreased by ¥174 million for the fiscal year ended March 31, 2021 and increased by ¥267
million for the fiscal year ended March 31, 2022 due to the effect of changes in tax rates in Japan and overseas.

(3) Income taxes recognized in other comprehensive income
Income taxes recognized in other comprehensive income are presented in Note 33 “Other
Comprehensive Income.”(4) Reconciliation of effective tax rate
Reconciliation of the effective statutory tax rate and the average actual tax rate for the fiscal years ended
March 31, 2021 and 2022 is as follows.
The Company’s income taxes mainly include corporation tax, inhabitant tax and enterprise tax. The
effective statutory tax rates calculated based on these taxes were 30.6% and 30.6% for the fiscal years
ended March 31, 2021 and 2022, respectively. Overseas subsidiaries are subject to income taxes of thecountries in which they operate.
2021
Effective statutory tax rate
Non-deductible expense, such as entertainment
expenses
Non-taxable income, such as dividend income
Tax credit for experimental research cost and others
Different tax rates applied to subsidiaries
Subsidiaries reserve
Change in unrecognized deferred tax assets andliabilities
Change in deferred tax assets at the end of fiscal year
due to changes in tax rates
Expiration of tax losses carried forward
Effects of organizational restructuring
Other
Average actual tax rate

75

2022
30.6%

30.6%

2.9

1.8

(0.3)
(1.2)
(3.0)
1.3

0.1
(1.7)
(2.1)
0.4

3.3

(12.0)

(0.2)

0.2

1.2
(20.9)
0.8

3.1
–
2.2

14.5%

22.6%

38. Major Subsidiaries(1) Structured entities
Major subsidiaries as of March 31, 2022 were as follows:

Company nameLocation

Main business

Voting rights
held by theCompany (%)(Note 1)

(Consolidated subsidiaries)
Olympus Medical Systems Corp.

Hachioji-shi, Tokyo

Manufacturing Endoscopic Solutions Businessproducts and Therapeutic Solutions Businessproducts

100

Aizu Olympus Co., Ltd.

Aizu-Wakamatsu-shi,
Fukushima

Manufacturing Endoscopic Solutions Businessproducts

100

Aomori Olympus Co., Ltd.

Kuroishi-shi, Aomori

Manufacturing Therapeutic Solutions Businessproducts

100

Nagano Olympus Co., Ltd.

Tatsuno-machi, Kamiina-gun, Manufacturing Scientific Solutions Business
Naganoproducts

100

Shirakawa Olympus Co., Ltd.

Nishigo-mura,Nishishirakawa-gun,
Fukushima

Manufacturing Endoscopic Solutions Businessproducts

100

Olympus Marketing, Inc.

Shinjuku-ku, Tokyo

Sales of Endoscopic Solutions Businessproducts, Therapeutic Solutions Businessproducts and Scientific Solutions Businessproducts

100

Olympus Logitex Co., Ltd.

Minami-ku, Sagamihara-shi,
Kanagawa

Logistics

100

Olympus Terumo Biomaterials
Corp.

Shibuya-ku, Tokyo

Research and development, manufacturing andsales of biomaterials products and regenerative
medicine

66.6

TmediX Corporation

Shinjuku-ku, Tokyo

Leasing of Endoscopic Solutions Businessproducts

100

Evident Corporation

Tatsuno-machi, Kamiina-gun, Manufacturing Scientific Solutions Business
Naganoproducts

100

Olympus Corporation of theAmericasPennsylvania, U.S.A.

Holding company of corporate planning andfinancial support to affiliated companies in
Americas region

100

Olympus America Inc.

Pennsylvania, U.S.A.

Sales of Endoscopic Solutions Businessproducts, Therapeutic Solutions Businessproducts and Scientific Solutions Businessproducts

100
(100)

Olympus Latin America, Inc.

Florida, U.S.A.

Sales of Endoscopic Solutions Businessproducts, Therapeutic Solutions Businessproducts and Scientific Solutions Businessproducts

100
(100)

Gyrus ACMI, Inc.

Massachusetts, U.S.A.

Manufacturing Therapeutic Solutions Businessproducts

100
(100)

Gyrus ACMI LP

Minnesota, U.S.A.

Manufacturing Therapeutic Solutions Businessproducts

100
(100)

Veran Medical Technologies, Inc.

Missouri, U.S.A.

Sales and manufacturing of Therapeutic
Solutions Business products

100
(100)

Olympus Scientific Solutions
Americas Corp.

Massachusetts, U.S.A.

Manufacturing Scientific Solutions Businessproducts

100
(100)

Olympus Scientific Solutions
Technologies Inc.

Massachusetts, U.S.A.

Manufacturing Scientific Solutions Businessproducts

100
(100)

Olympus Innovation Ventures,
LLC

Massachusetts, U.S.A.

Investment in Endoscopic Solutions Businessand Therapeutic Solutions Business

100
(100)

Olympus NDT Canada Inc.

Québec, Canada

Manufacturing Scientific Solutions Businessproducts

100
(100)

Olympus Europa Holding SE

Hamburg, Germany

Holding company of corporate planning toaffiliated companies in Europe region

100

76

Company nameLocation

Main business

Voting rights
held by theCompany (%)(Note 1)

Olympus Europa SE & Co. KG

Hamburg, Germany

Holding company and sales of Endoscopic
Solutions Business products, Therapeutic
Solutions Business products and Scientific
Solutions Business products

100
(100)

Olympus Soft Imaging Solutions
GmbH

Munster, Germany

Information services and system development

100
(100)

Hamburg, Germany

Sales of Endoscopic Solutions Businessproducts, Therapeutic Solutions Businessproducts and Scientific Solutions Businessproducts

100
(100)

Olympus France S.A.S.

Rungis Cedex, France

Sales of Endoscopic Solutions Businessproducts, Therapeutic Solutions Businessproducts and Scientific Solutions Businessproducts

100
(100)

Olympus Winter & Ibe GmbH

Hamburg, Germany

Manufacturing Endoscopic Solutions Businessproducts and Therapeutic Solutions Businessproducts

100
(100)

KeyMed (Medical & Industrial
Equipment) Ltd.

Essex, U.K.

Manufacturing and sales of Endoscopic
Solutions Business products and Scientific
Solutions Business products

100
(100)

Quest Photonic Devices B.V.

North Holland,
The Netherlands

Development of Endoscopic Solutions Businessproducts

100
(100)

Arc Medical Design LimitedWest Yorkshire, U.K.

Manufacturing Therapeutic Solutions Businessproducts

100
(100)

FH ORTHO SAS

Heimsbrunn, France

Sales and manufacturing of orthopedic
equipment

100
(100)

Olympus Global Treasury Services
LimitedEssex, U.K.

Fund management of the whole group100

Medi-Tate Ltd.

Or-Akiva, Israel

Development and manufacturing of Therapeutic
Solutions Business products

100
(100)

Olympus Corporation of Asia
Pacific Limited

Hong Kong

Holding company of corporate planning toaffiliated companies in Asia region

100

Olympus Hong Kong and China
LimitedHong Kong

Sales of Endoscopic Solutions Businessproducts, Therapeutic Solutions Businessproducts and Scientific Solutions Businessproducts and manufacturing Scientific Solutions
Business products

100
(100)

Olympus (China) Co., Ltd.

Beijing, P.R.C.

Holding company of corporate planning toaffiliated companies in China

100
(100)

Olympus (Guangzhou) Industrial
Ltd.

Guangzhou, P.R.C.

Manufacturing Endoscopic Solutions Businessproducts and Scientific Solutions Businessproducts

100
(100)

Olympus (Beijing) Sales & Service
Beijing, P.R.C.
Co., Ltd.

Sales of Endoscopic Solutions Businessproducts, Therapeutic Solutions Businessproducts and Scientific Solutions Businessproducts

100
(100)

Olympus Trading (Shanghai)
LimitedShanghai, P.R.C.

Sales of Endoscopic Solutions Businessproducts, Therapeutic Solutions Businessproducts and Scientific Solutions Businessproducts

100
(100)

Olympus Korea Co., Ltd.

Seoul, Republic of Korea

Sales of Endoscopic Solutions Businessproducts, Therapeutic Solutions Businessproducts and Scientific Solutions Businessproducts

100

Olympus Singapore Pte Ltd.

Singapore

Sales of Endoscopic Solutions Businessproducts, Therapeutic Solutions Businessproducts and Scientific Solutions Businessproducts

100
(100)

Olympus Vietnam Co., Ltd.

Vietnam

Manufacturing Therapeutic Solutions Businessproducts

100

Olympus Deutschland GmbH

77

Company nameLocation

Olympus Australia Pty Ltd.

Victoria, Australia

64 others

Main business

Voting rights
held by theCompany (%)(Note 1)

Sales of Endoscopic Solutions Businessproducts, Therapeutic Solutions Businessproducts and Scientific Solutions Businessproducts

―

100
(100)

―

―

Development of Endoscopic Solutions Businessproducts

49――(Equity method affiliatedcompanies)
Sony Olympus Medical Solutions
Inc.

Hachioji-shi, Tokyo

1 others
Note:―

Figures disclosed in parentheses in the “Voting rights held by the Company” column represent voting rights held indirectly by theCompany.

(2) Significant subsidiaries having non-controlling interests
During the years ended March 31, 2021 and 2022, there was no individually significant subsidiaryhaving non-controlling interests.
39. Related-party Transactions(1) Related-party transactions
There were no material related-party transactions (except for transactions that were offset in the
consolidated financial statements) for the years ended March 31, 2021 and 2022.
(2) Remuneration for management executives
Millions of yen
Remuneration and bonuses
Share-based payments
Total

2021

2022

¥1,124173¥1,370353¥1,297¥1,723

40. Business Combinations
For the year ended March 31, 2021
(Acquisition of Arc Medical Design Limited)(1) Overview of business combination
1) Name and description of acquired business
Name of acquired business

Arc Medical Design Limited (hereinafter “Arc Medical Design”)

Description of business

Development and manufacturing of auxiliary devices for diagnoses
and treatment using gastrointestinal endoscopes

2) Primary reason for business combination
To further strengthen the Company’s core competencies in early detection and minimally invasive
therapies, beyond our proprietary development, by acquiring optimal partners, we are working to
expand our lineup of devices to treat digestive disorders and to develop auxiliary devices for the
diagnosis and treatment of colorectal cancer.

78

Through this acquisition, the Company has obtained full rights to Arc Medical Design’s innovative
medical products. The Company already has exclusive distribution rights in the European market for
Arc Medical Design’s core product, ENDOCUFF VISION™; however, from now on, the Company
will be responsible for the design, manufacturing, sales, and business strategy of the entire
ENDOCUFF product group. Through the acquisition of this product group, we will further
contribute to reducing treatment costs and improving patients’ QOL.
3) Percentage of voting equity interest acquired
100%4) Acquisition dateAugust 7, 20205) How we obtained control of the acquiree
Cash consideration for the acquisition of shares(2) Acquisition-related expense
The acquisition-related expense of ¥67 million has been recognized in “Selling, general andadministrative expenses.”(3) Fair value of consideration paid, assets acquired, and liabilities assumed as of the acquisition dateMillions of yen
AmountFair value of consideration paid
CashContingent consideration¥3,472
488

Total¥3,960Fair value of assets acquired and liabilities assumed
Cash and cash equivalents
Property, plant and equipment
Intangible assets
Other assets
Deferred tax liabilities
Other liabilities

¥79
0
1,296
5
(246)
(74)

Fair value of assets acquired and liabilities assumed, net

1,060

Goodwill

2,900

Total

¥3,960

Based on the fair value of consideration paid on the acquisition date, we have allocated the assets
acquired and liabilities assumed. The allocation of consideration paid has been completed in the fiscal
year ended March 31, 2021, and there is no material change in the amount from the initial provisionalamount.
Goodwill mainly represents a rational estimate of the expected future excess earning power.
Furthermore, the amount of goodwill recognized does not include the amount that is expected to be
deductible for tax purposes.
(4) Contingent consideration
The Contingent consideration is the royalties paid over certain future period to former shareholders of
Arc Medical Design for sales of Arc Medical Design’s products, and its fair value is calculated
considering future sales forecasts and the time value of money. Furthermore, there is no limit on theamount of payment of the royalties.
In terms of hierarchical level, the fair value of the Contingent consideration is level 3. The amount ofchange in fair value of the Contingent consideration includes the recording of the part based on changes
in the time value of money as “Finance costs” and the part based on changes other than the time valueof money as “Other income” or “Other expenses.”79

(5) Impacts on the Olympus GroupThe Company omits making a description concerning profit or loss information of the said businesscombination on and after the acquisition date as well as profit or loss information under the assumptionthat the said business combination was conducted at the beginning of the fiscal year ended March 31,
2021. This is because the amount of impact on consolidated statement of profit or loss due to suchinformation is not material.
The independent auditor has not audited profit or loss information under the assumption that the saidbusiness combination was conducted at the beginning of the fiscal year.
(Acquisition of FH ORTHO SAS)
(1) Overview of business combination
1) Name and description of acquired business
Name of acquired business

FH ORTHO SAS (hereinafter, “FH ORTHO”)

Description of business

Development, manufacturing, and sales of orthopedic equipment

2) Primary reason for business combination
The Company has been developing an orthopedic business in Japan that manufactures and sells bone
substitutes, high tibial osteotomy (HTO) plates, and other related products through its subsidiary
Olympus Terumo Biomaterials Corporation. Furthermore, in order to support more precise and safer
fragmentation and excision of bodily tissue (bone), the Company has developed the first ultrasounddevice indicated for arthroscopic surgery.
Through this acquisition, the Company will enhance its portfolio of products, which are innovativeand contribute to enhanced patients’ QOL, used in ligament reconstructive surgery, foot arthrodesis,
trauma surgery, etc. Furthermore, in addition to developing the Company’s orthopedic surgery
products through the global sales routes owned by FH ORTHO, by selling some of FH ORTHO’s
core products in Japan, we will expand the Olympus Group’s sales channels and grow our business.
By introducing more products and solutions that contribute to minimally invasive therapies and by
expanding sales channels for them, the Company will further enhance its position as a global
medtech company.
3) Percentage of voting equity interest acquired
100%4) Acquisition dateNovember 2, 20205) How we obtained control of the acquiree
Cash consideration for the acquisition of shares(2) Acquisition-related expense
The acquisition-related expense of ¥403 million has been recognized in “Selling, general andadministrative expenses.”80

(3) Fair value of consideration paid, assets acquired, and liabilities assumed as of the acquisition dateMillions of yen
AmountFair value of consideration paid
CashContingent consideration¥5,776194

Total¥5,970Fair value of assets acquired and liabilities assumed
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Property, plant and equipment
Intangible assets
Deferred tax assets
Trade and other payables
Bonds and borrowings (current)
Provisions
Other current liabilities
Retirement benefit liability
Deferred tax liabilities
Other non-current liabilities

¥122
618
3,445
1,099
1,271
2,232
617
(727)
(3,055)
(460)
(723)
(206)
(847)
(356)

Fair value of assets acquired and liabilities assumed, net

3,030

Goodwill

2,940

Total

¥5,970

Based on the fair value of consideration paid on the acquisition date, the Company has allocated theassets acquired and liabilities assumed. Furthermore, the allocation of consideration paid has been
completed in the fiscal year March 31, 2021, and the value of the assets and liabilities on the acquisition
date have been revised from the initial provisional amounts.
The major adjustments made comprise an increase in inventories of ¥1,251 million, an increase inintangible assets of ¥1,725 million, and an increase in deferred tax liabilities of ¥847 million. As aresult, goodwill decreased by ¥2,303 million. The balance of intangible assets of ¥2,232 million ismostly comprised of ¥2,031 million in technology-related assets related to products of FH ORTHO,
which are measured based on future sales growth rate, diminishing value rate, discount rate and otherassumptions. The estimated useful lives of technology-related assets are 10 to 16 years.
Goodwill mainly represents a rational estimate of the expected future excess earning power.
Furthermore, the amount of goodwill recognized does not include the amount that is expected to be
deductible for tax purposes.
(4) Contingent consideration
The Contingent consideration is set to be paid based on the achievement levels of designatedperformance metrics for FH ORTHO after the business combination, and the payment limit is €2,550
thousand. Its fair value is calculated considering forecasts of future financial results and the time valueof money.
In terms of hierarchical level, the fair value of the Contingent consideration is level 3. The amount ofchange in fair value of the Contingent consideration includes the recording of the part based on changes
in the time value of money as “Finance costs” and the part based on changes other than the time valueof money as “Other income” or “Other expenses.”(5) Impacts on the Olympus GroupThe Company omits making a description concerning profit or loss information of the said businesscombination on and after the acquisition date as well as profit or loss information under the assumptionthat the said business combination was conducted at the beginning of the fiscal year ended March 31,

812021. This is because the amount of impact on consolidated statement of profit or loss due to suchinformation is not material.
The independent auditor has not audited profit or loss information under the assumption that the saidbusiness combination was conducted at the beginning of the fiscal year.
(Acquisition of Veran Medical Technologies, Inc.)(1) Overview of business combination
1) Name and description of acquired business
Name of acquired business

Veran Medical Technologies, Inc. (hereinafter, “VMT”)

Description of business

Manufacturing and sales of pulmonary medical devices

2) Primary reason for business combination
VMT’s electromagnetic navigation system supports the insertion of bronchoscopes and devices into
the finely branching bronchial periphery, the identification of the location of lesions in the bronchial
periphery, and tissue biopsy in the lesions. By combining VMT’s electromagnetic navigation systemwith the Company’s existing pulmonary devices such as our bronchoscopes and radial
endobronchial ultrasound (EBUS), the Company expects even greater results in smoothly accessing
lesions and diagnosing and determining the stage of lung cancer in patients. Through thisacquisition, not only will the Company strengthen the product lineup in its Respiratory Business, butwill also greatly strengthen its North American sales network with the addition of VMT’s highly
experienced sales staff. By enhancing competitiveness in the pulmonary market, the Company willfurther contribute to early diagnosis and minimally invasive therapies for bronchial disease.
3) Percentage of voting equity interest acquired
100%4) Acquisition date
December 29, 20205) How we obtained control of the acquiree
Cash consideration for the acquisition of shares(2) Acquisition-related expense
The acquisition-related expense of ¥440 million has been recognized in “Selling, general andadministrative expenses.”82

(3) Fair value of consideration paid, assets acquired, and liabilities assumed as of the acquisition dateMillions of yen
AmountFair value of consideration paid
CashContingent consideration¥31,050
1,461

Total

¥32,511

Fair value of assets acquired and liabilities assumed
Cash and cash equivalents
Trade and other receivables
Inventories
Property, plant and equipment
Intangible assets
Other assets
Deferred tax assets
Trade and other payables
Other liabilities
Deferred tax liabilities

¥433
506
2,176
241
16,953
353
2,746
(108)
(779)
(4,244)

Fair value of assets acquired and liabilities assumed, net

18,277

Goodwill

14,234

Total¥32,511

Based on the fair value of consideration paid on the acquisition date, the Company has allocated theassets acquired and liabilities assumed. Furthermore, the allocation of consideration paid has been
completed in the fiscal year March 31, 2022, and the value of the assets and liabilities on the acquisition
date have been revised from the initial provisional amounts.
The major adjustments made comprise an increase in intangible assets of ¥16,953 million, an increase indeferred tax assets of ¥1,128 million, and an increase in deferred tax liabilities of ¥4,244 million. As aresult, goodwill decreased by ¥16,295 million. The ¥16,953 million in intangible assets are mainly
made up of ¥13,993 million in technology-related assets and ¥2,577 million in-process research anddevelopment related to VMT’s products, and the amount is calculated based on assumptions for the
future net sales growth rate, the diminishing value rate, and the discount rate, etc. The estimated useful
lives of technology-related assets are 15 years.
Goodwill mainly represents a rational estimate of the expected future excess earning power.
Furthermore, the amount of goodwill recognized does not include the amount that is expected to be
deductible for tax purposes.
(4) Contingent consideration
The Contingent consideration is set to be paid based on the achievement levels of designatedperformance metrics for VMT after the business combination, and the payment limit is US$40,000
thousand. In terms of hierarchical level, the fair value of the Contingent consideration is level 3.
Due to the delay in achieving such performance indicators, the fair value of the contingent consideration
was revised from the initially calculated amount of ¥1,461 million to ¥367 million in the fiscal year
ended March 31, 2022. In addition, of the ¥1,094 million difference, ¥1,249 million of thecorresponding amount arising from the review of the fair values is included in other income in the
consolidated statement of profit or loss, and ¥155 million of the corresponding amount arising fromexchange rate fluctuations is included in exchange differences on translation of foreign operations in the
consolidated statement of comprehensive income.
(5) Impacts on the Olympus GroupThe Company omits making a description concerning profit or loss information of the said businesscombination on and after the acquisition date as well as profit or loss information under the assumptionthat the said business combination was conducted at the beginning of the fiscal year ended March 31,
2021. This is because the amount of impact on consolidated statement of profit or loss due to suchinformation is not material.

83The independent auditor has not audited profit or loss information under the assumption that the saidbusiness combination was conducted at the beginning of the fiscal year.
(Acquisition of Quest Photonic Devices B.V.)(1) Overview of business combination
1) Name and description of acquired business
Name of acquired business

Quest Photonic Devices B.V. (hereinafter, “Quest”)

Description of business

Development, manufacturing, and sales of medical devices

2) Primary reason for business combination
Quest is a company that develops, manufactures, and commercializes cutting-edge fluorescenceimaging systems (FIS) and contributes to innovation in imaging technology in the surgical field. It isstrong in the development of imaging technologies using various light wavelengths. It provides abroad range of medical imaging devices, starting with the Spectrum® imaging system used in FISguided laparotomy and laparoscopy, devices for photodynamic therapy, and so on.
The Company has already introduced 4K and 3D technologies in the surgical endoscope imaging
field. This acquisition will contribute to more precise and safer surgical procedures by strengthening
our FIS technology and product lineup.
3) Percentage of voting equity interest acquired
100%4) Acquisition dateFebruary 9, 2021
5) How we obtained control of the acquiree
Cash consideration for the acquisition of shares(2) Acquisition-related expense
The acquisition-related expense of ¥69 million has been recognized in “Selling, general andadministrative expenses.”84

(3) Fair value of consideration paid, assets acquired, and liabilities assumed as of the acquisition dateMillions of yen
AmountFair value of consideration paid
CashContingent consideration¥4,684
1,290

Total

¥5,974

Fair value of assets acquired and liabilities assumed
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Property, plant and equipment
Intangible assets
Other financial assets (non-current)
Deferred tax assets
Trade and other payables
Bonds and borrowings (current)
Provisions
Other current liabilities
Bonds and borrowings (non-current)
Deferred tax liabilities
Other non-current liabilities

¥301
53
197
24
204
2,468
45
32
(21)
(39)
(1)
(314)
(1,035)(475)(22)

Fair value of assets acquired and liabilities assumed, net

1,417

Goodwill

4,557

Total

¥5,974

Based on the fair value of consideration paid on the acquisition date, the Company has conducted anacquisition cost allocation to the assets acquired and liabilities assumed. Furthermore, the allocation of
consideration paid has been completed in the fiscal year March 31, 2022, and the value of the assets andliabilities on the acquisition date have been revised from the initial provisional amounts.
The major adjustments made comprise an increase in intangible assets of ¥1,899 million and an increasein deferred tax liabilities of ¥475 million. As a result, goodwill decreased by ¥1,424 million. Thebalance of intangible assets of ¥2,468 million is mostly comprised of ¥1,995 million in technologyrelated assets and ¥466 million in customer-related assets related to products of Quest, which aremeasured based on future sales growth rate, diminishing value rate, discount rate and other assumptions.
The estimated useful lives of technology-related assets and customer-related assets are 16 years.
Goodwill mainly represents a rational estimate of the expected future excess earning power.
Furthermore, the amount of goodwill recognized does not include the amount that is expected to be
deductible for tax purposes.
(4) Contingent consideration
The Contingent consideration is a payment to the previous shareholders of Quest as a milestone
payment subject to the obtaining of approval for development made mainly by Quest, and the payment
is calculated by taking into consideration the possibility of obtaining the approval for the development
and time value of money. The payment limit is €14,000 thousand.
In terms of hierarchical level, the fair value of the Contingent consideration is level 3. The amount ofchange in fair value of the Contingent consideration includes the recording of the part based on changes
in the time value of money as “Finance costs” and the part based on changes other than the time valueof money as “Other income” or “Other expenses.”(5) Impacts on the Olympus GroupThe Company omits making a description concerning profit or loss information of the said businesscombination on and after the acquisition date as well as profit or loss information under the assumptionthat the said business combination was conducted at the beginning of the fiscal year ended March 31,

852021. This is because the amount of impact on consolidated statement of profit or loss due to suchinformation is not material.
The independent auditor has not audited profit or loss information under the assumption that the saidbusiness combination was conducted at the beginning of the fiscal year.
For the year ended March 31, 2022
(Acquisition of Medi-Tate Ltd.)(1) Overview of business combination
1) Name and description of acquired business
Name of acquired business Medi-Tate Ltd. (hereinafter “Medi-Tate”)
Description of business R&D and manufacturing of Therapeutic Solutions Business products
2) Primary reason for business combination
Medi-Tate is a medical equipment manufacturer engaged in research and development, andmanufacturing of minimally invasive therapy devices for benign prostatic hyperplasia (hereinafter“BPH”). The Company will contribute to making minimally invasive therapies for diversified
prostatic diseases more widespread and improving patients’ QOL, and further strengthen businesscompetitiveness in the field of urinary organs by adding minimally invasive therapy devices for
BPH possessed by Medi-Tate to its product portfolio.
3) Percentage of voting equity interest acquired
100%4) Acquisition date
May 27, 2021
5) How we obtained control of the acquiree
The Company owned 18.46% of voting shares of Medi-Tate through Olympus Winter & Ibe GmbH,a consolidated subsidiary of the Company, immediately before the acquisition date. On theacquisition date, the Company additionally acquired 81.54% of shares of the said company throughOlympus Winter & Ibe GmbH in exchange for cash, making the said company a wholly-owned
subsidiary.
(2) Acquisition-related expense
The acquisition-related expense of ¥168 million has been recognized in “Selling, general andadministrative expenses.”(3) Gain on step acquisitions
As a result of revaluing the equity interest of the acquired company held just prior to the acquisition
date at fair value on the acquisition date, we recognized a gain on step acquisition of ¥2,826 million.
The gain on step acquisition is recorded in “Other income” in the consolidated statement of profit or
loss.

86

(4) Fair value of consideration paid, assets acquired, and liabilities assumed as of the acquisition dateMillions of yen
AmountFair value of consideration paid
Cash
Fair value of equity interest held just prior to theacquisition dateContingent consideration¥22,680
4,932
2,148

Total

¥29,760

Fair value of assets acquired and liabilities assumed
Cash and cash equivalents
Trade and other receivables
Inventories
Other current assets
Property, plant and equipment
Intangible assets
Other financial assets (non-current)
Deferred tax assets
Trade and other payables
Other current liabilities
Deferred tax liabilities
Other non-current liabilities¥1,353
3
3
214
30
8,866
3
604
(46)
(675)
(2,039)(16)

Fair value of assets acquired and liabilities assumed, net

8,300

Goodwill

21,460Total¥29,760

Based on the fair value of consideration paid on the acquisition date, the Company has conducted anacquisition cost allocation to the assets acquired and liabilities assumed. The allocation of consideration
paid has been completed in the fiscal year ended March 31, 2022, and there is no material change in theamount from the initial provisional amount. The balance of intangible assets of ¥8,866 million iscomprised of technology-related assets related to products of Medi-Tate, which are measured based on
future sales growth rate, diminishing value rate, discount rate and other assumptions. The estimateduseful lives of technology-related assets are 14 years.
Goodwill mainly represents a rational estimate of the expected future excess earning power.
Furthermore, the amount of goodwill recognized does not include the amount that is expected to be
deductible for tax purposes.
(5) Contingent consideration
The contingent consideration is a milestone payment subject to the obtaining of approval fordevelopment made by Medi-Tate, and the payment is calculated by taking into consideration thepossibility of obtaining the approval for the development and time value of money. The payment limit is
US$40,000 thousand.
In terms of hierarchical level, the fair value of the contingent consideration is level 3, which is the fairvalue calculated from valuation techniques that include inputs that are not based on observable market
data. The amount of change in fair value of the Contingent consideration includes the recording of thepart based on changes in the time value of money as “Finance costs” and the part based on changes
other than the time value of money as “Other income” or “Other expenses.”(6) Impacts on the Olympus GroupThe Company omits making a description concerning profit or loss information of the said businesscombination on and after the acquisition date as well as profit or loss information under the assumptionthat the said business combination was conducted at the beginning of the fiscal year ended March 31,
2022. This is because the amount of impact on consolidated statement of profit or loss due to suchinformation is not material.
The independent auditor has not audited profit or loss information under the assumption that the saidbusiness combination was conducted at the beginning of the fiscal year.

87

(Revised provisional amounts)
For the following business combinations that occurred in the fiscal year ended March 31, 2021,
provisional amounts have been revised during the fiscal year ended March 31, 2022. As a result, wehave retrospectively revised the figures at the end of the fiscal year ended March 31, 2021 in the
consolidated statement of financial position.
(Acquisition of Veran Medical Technologies, Inc.)
Veran Medical Technologies, Inc. became a consolidated subsidiary of the Company on December 29,
2020, due to the acquisition of shares for cash consideration.
In the fiscal year ended March 31, 2022, the fair value of some assets acquired and liabilities assumed
has been revised with respect to the measurement of the fair value of assets acquired and liabilities
assumed as of the acquisition date in said business combination. Regarding said business combination,in the fiscal year ended March 31, 2022, initial measurement of assets acquired, liabilities assumed andgoodwill has been finalized.
Millions of yen
Provisional fair value asof March 31, 2021

Subsequent revision

Revised fair value¥31,050¥–¥31,050

1,461

–

1,461

¥32,511¥–¥32,511

Cash and cash equivalents

¥433

¥–

¥433

Trade and other receivables

506

–

506

2,259

(83)

2,176

41

200

241

14,647

2,306

16,953

210

143

353

Deferred tax assets

1,612

1,134

2,746

Trade and other payables

(128)

20

(108)

Other liabilities

(587)

(192)

(779)

(2,586)(1,658)(4,244)

Fair value of assets acquired and liabilities assumed,
net

16,4071,870

18,277

Goodwill

16,104(1,870)

14,234

Total¥32,511¥–¥32,511

Fair value of consideration paid
CashContingent consideration
Total

Fair value of assets acquired and liabilities assumed

Inventories
Property, plant and equipment
Intangible assets
Other assets

Deferred tax liabilities

Due to these revisions, we have retrospectively revised the figures for the fiscal year ended March 31,
2021 in the consolidated statement of financial position. The major adjustments as of March 31, 202188

were increases in intangible assets, deferred tax assets and deferred tax liabilities of ¥2,467 million,¥1,213 million and ¥1,774 million, respectively, and a decrease in goodwill of ¥1,998 million.
(Acquisition of Quest Photonic Devices B.V.)
Quest Photonic Devices B.V. became a consolidated subsidiary of the Company on February 9, 2021,
due to the acquisition of shares for cash consideration.
In the fiscal year ended March 31, 2022, the fair value of some assets acquired and liabilities assumed
has been revised with respect to the measurement of the fair value of assets acquired and liabilities
assumed as of the acquisition date in said business combination. Regarding said business combination,in the fiscal year ended March 31, 2022, initial measurement of assets acquired, liabilities assumed andgoodwill has been finalized.

Millions of yen
Provisional fair value asof March 31, 2021

Subsequent revision

Revised fair value

Cash¥4,684¥–¥4,684

Contingent consideration

1,290

–

1,290

¥5,974¥–¥5,974

Cash and cash equivalents

¥301

¥–

¥301

Trade and other receivables

53

–

53

Inventories

197

–

197

Other current assets

24

–

24

Property, plant and equipment

204

–

204

Intangible assets

569

1,899

2,468

Other financial assets (non-current)

45

–

45

Deferred tax assets

32

–

32

Trade and other payables

(21)

–

(21)

Bonds and borrowings (current)

(39)

–

(39)

Provisions

(1)

–

(1)

(314)

–

(314)

(1,035)–(1,035)

–

(475)

(475)

(22)

–

(22)

(7)

1,424

1,417

Goodwill

5,981(1,424)

4,557

Total

¥5,974¥–¥5,974

Fair value of consideration paid

Total

Fair value of assets acquired and liabilities assumed

Other current liabilities
Bonds and borrowings (non-current)
Deferred tax liabilities
Other non-current liabilities
Fair value of assets acquired and liabilities assumed,net89Due to these revisions, we have retrospectively revised the figures for the fiscal year ended March 31,
2021 in the consolidated statement of financial position. Intangible assets and deferred tax assets
increased by ¥1,908 million and ¥477 million, respectively, and goodwill decreased by ¥1,431 million.
41. Discontinued Operations(1) Outline of discontinued operations
Due to the transfer of the Imaging Business to OJ Holdings, Ltd., a special purpose company
established by Japan Industrial Partners, Inc. in the fiscal year ended March 31, 2021, the profit (loss) of
the Imaging Business is presented in discontinued operations.
(2) Profit (loss) of discontinued operations
Profit (loss) of discontinued operations is as follows.
Millions of yen
2021

2022

Revenue
Cost of sales¥21,062
14,715¥––Gross profit
Selling, general and administrative expenses
Share of profit (loss) of investments accounted for using equity method
Other income
Other expenses (Note)

6,347
13,633–75
44,898–––––Operating loss
Finance income
Finance costs(52,109)
0
367

–
–
–

Loss before tax
Income taxes(52,476)
205––

Loss from discontinued operations¥(52,681)

¥–

Note:

Other expenses in the fiscal year ended March 31, 2021 include a loss on sale of the Imaging Business of ¥44,794 million (expenses
borne in accordance with the transfer agreement of ¥28,618 million, loss on sale of inventories of ¥14,910 million and loss on saleof fixed asset, etc. of ¥1,266 million).

(3) Cash flows of discontinued operations
Cash flows of discontinued operations are as follows.
Millions of yen
Cash flows of discontinued operations

2021

Net cash used in operating activities
Net cash used in investing activities
Net cash used in financing activities2022¥(2,999)(28,686)
¥(68)

¥–
–
¥–

42. Contingent Liabilities
The Olympus Group has the following guarantees:
Millions of yen
2021
Employees (mortgages)
Total

2022
¥3

¥1

¥3

¥1

(Guarantee obligations of employees’ mortgages)
The maximum term of the guarantee obligations extends to 2023. As a guarantor, the Olympus Group is liable
for any defaults of the mortgages in scope of the obligations and has an obligation to settle the mortgages onbehalf of the employees. Those obligations are collateralized by the homes of the employees.

9043. Additional Information(Company split associated with the restructuring of domestic sales functions)
On October 1, 2021, the Company conducted a company split that transferred some of the rights and liabilities
associated with the domestic sales functions of the Endoscopic Solutions Business and the Therapeutic Solutions
Business to the Company’s wholly owned subsidiary Olympus Medical Science Sales Corporation. The
company split was carried out under an absorption-type split agreement concluded between the Company andOlympus Medical Science Sales Corporation on February 12, 2021. Furthermore, with the start of our evaluation
into making the Scientific Solutions Business a separate company, on June 17, 2021, the Company concluded a
modified agreement related to absorption-type splits between the Company and Olympus Medical Science Sales
Corporation.
Moreover, on October 1, 2021, Olympus Medical Science Sales Corporation changed its trade name to“Olympus Marketing Corporation.”
1. Overview of transaction
1)

2)

Names and description of businesses subject to transaction
Names of businesses

Endoscopic Solutions Business, Therapeutic Solutions Business

Description of business:

Domestic sales functions for the above businesses

Effective date of company split
October 1, 2021

3)

Legal form of company split
Absorption-type split in which Olympus Corporation becomes the absorption-type split company andOlympus Marketing, Inc. (former company name: Olympus Medical Science Sales Corporation) becomes theabsorption-type split successor company

4)

Name of the company after the company split
Olympus Marketing, Inc.

2. Description of transaction
The Company and Olympus Medical Science Sales Corporation have been responsible for the Olympus Group’s
domestic sales functions. By integrating the domestic sales functions for the Endoscopic Solutions Business andthe Therapeutic Solutions Business of the two companies, the Company aims to realize “flexible personnel
assignment,” “enhanced cooperation with partners,” “integrated nationwide policy implementation,” and“acquisition and retention of excellent personnel,” and conducted the company split to strengthen its sales
functions.
(Establishment of a subsidiary)
On October 5, 2021, the Company’s consolidated subsidiary Olympus Corporation of the Americas establishedOlympus Innovation Ventures, LLC (hereinafter, “OIV”) as a corporate venture capital fund (hereinafter, “CVCFund”).
In recent years, the pace of innovation has been accelerating, and new trends such as digital, AI and robotics are
shifting the medtech landscape. In order to take advantage of these opportunities and to create opportunities for
us to grow, we have established the CVC Fund. This fund will allow the Olympus Group to form relationships
with early stage companies and help nurture partnerships and explore and acquire technologies with relevant andcompelling entrepreneurial teams.

91

The Olympus Group will initially commit a total of US$50 million over five years for OIV to search, identify,
vet and invest in early stage companies with differentiated technologies. OIV will deliver the following benefits
to us:(1) Build a pipeline of future M&A targets(2) Spot critical trends in technology, medicine, and care delivery(3) Identify promising new markets for future growth(4) Generate financial return on invested capital(5) Raise the Olympus Group’s profile in the medtech innovation ecosystem
Name of established subsidiary:

Olympus Innovation Ventures, LLC

Description of business:

Investment in and support to external opportunities

Date of incorporation:

October 5, 2021

Investors and investment ratios:

Olympus Corporation of the Americas 100%

44. Significant Subsequent Events(Cancellation of treasury shares)
At the meeting of the Board of Directors held on May 11, 2022, the Company resolved the cancellation oftreasury shares as provided for under Article 178 of the Companies Act, and the cancellation of treasury
shares was completed on June 8, 2022. The details are as follows:(1) Type of shares cancelled:

Common shares of the Company(2) Total number of shares cancelled:

13,402,333 shares (1.03% of total number of issued shares
before the cancellation)(3) Date of cancellation:

June 8, 2022

(4) Total number of issued shares after cancellation:

1,285,892,000 shares(Transfer of Scientific Solutions Business through company split)
The Company transferred its Scientific Solutions Business through an absorption-type company split(hereinafter the “Company Split”), to Evident Corporation, which is a newly established wholly owned
subsidiary of Olympus (hereinafter “Evident”) on April 1, 2022.
(1)

Background and purpose of the company split
As a truly global medical technology company, the Company announced its corporate strategy forachieving sustainable growth (hereinafter “Corporate Strategy”) on November 6, 2019. Based on thiscorporate strategy, the Company is allocating management resources to the medical field, mainly inEndoscopic Solutions Business and Therapeutic Solutions Business, and we are working to strengthen ourmanagement base in order to achieve sustainable growth. Under these circumstances, we have been
carefully analyzing and considering the reorganization of the Scientific Solutions Business, taking all
options into consideration including a possible subsequent business transfer after the Company Split, inorder to achieve sustainable growth and profitability improvement of the Scientific Solutions Business.
As a result, we decided to spin off the Scientific Solutions Business after it was judged that establishing amanagement structure that matches the characteristics of each business in the medical field centered on
the above two businesses and Scientific Solutions Business will accelerate efforts to achieve sustainablegrowth and improve profitability of each and contribute to the enhancement of corporate value of theentire Group. As of April 1, 2022, we have completed the reorganization, in which our newly establishedwholly owned subsidiary, Evident Corporation, takes over the Scientific Solutions Business.

92

(2)

Summary of the company split
1) Method of the company split
The Company has carried out an absorption-type split (simple absorption-type company split) with theCompany as the absorption-type split company and the Evident as the successor company to theabsorption-type company split.
2) Schedule of the company split
Date of decision:

December 17, 2021

Date of Company Split agreement:

January 14, 2022

Effective date:

April 1, 2022

Since the Company Split falls under the simple absorption-type split based on the provisions of Article
784, Paragraph 2 of the Companies Act, the Company did not hold a general meeting of shareholders.
3) Details of allocation related to company split
At the time of the company split, Evident newly issued one common share and allocated and delivered it
to the Company.
4) Rights and obligations to be succeeded by the successor company
Evident succeeded the assets and rights and obligations of the Company regarding the Scientific
Solutions Business, which are stipulated in the absorption-type company split agreement with theCompany.
5) Summary of the successor company of the absorption-type company split
Name: Evident Corporation
Address:

6666 Inatomi, Tatsuno-machi, Kamiina-gun, Nagano

Title and name of representative: Yoshitake Saito, President and Representative Director
Capital:¥0.5 million (As of April 1, 2022) (Note)

Description of business:

Development, manufacturing, sales and provision of solutions forbiological microscopes, industrial microscopes, industrial
endoscopes, non-destructive testing equipment, X-ray analyzers, etc.

Note: The Company has decided to underwrite the capital increase implemented by Evident on April 6,
2022 (hereinafter the “capital increase.” After the capital increase, the share capital and legal
capital surplus of Evident are ¥24,000 million each. Since the share capital of Evident isequivalent to more than 10/100 (one tenth) of the share capital of the Company as a result of thecapital increase, Evident falls under the category of “specified subsidiary” of the Company.
(Absorption-type merger agreement for a wholly owned subsidiary)
The Company implemented an absorption-type merger (hereinafter “the Merger”) with consolidated
subsidiary, Olympus Logitex Co., Ltd. (hereinafter “Olympus Logitex”), effective from April 1, 2022.
(1)

Background and purpose of the merger
In order to improve operations and improve business performance and organizational soundness, we areworking on the company-wide cross-functional corporate transformation plan “Transform Olympus,” andin one of its priority measures, “End-to-End (E2E) Supply Chain Transformation,” we aim to build an
E2E supply chain that integrates everything from parts procurement to delivery to customers, improving
customer satisfaction and business agility, improving cost efficiency, and optimizing inventory. As part ofthis End-to-End supply chain transformation, we integrated Olympus Logitex, which is responsible forstorage and warehousing functions for Olympus Group products and distribution functions to dealers andcustomers in Japan and overseas, into our supply chain management section, which is responsible for the
supply chain strategy planning function of the entire Group, and the merger has been conducted with theaim of strengthening the ability to propose logistics solutions and strengthening cooperation with global
procurement, manufacturing, and sales functions.

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(2)

Summary of the merger
1) Method of the merger
As an absorption-type merger (simplified and short-form) with Olympus acting as the surviving
company and Olympus Logitex to be absorbed and merged. As a result, Olympus Logitex has been
dissolved.
2) Schedule of the merger
Date of decision:

December 17, 2021

Date of merger agreement:

December 17, 2021

Effective date of merger:

April 1, 2022

The Merger is, for Olympus, a simplified merger under the provisions of Paragraph 2 of Article 796 of
the Companies Act and, for Olympus Logitex, a short-form merger under the provisions of Paragraph 1
of Article 784 of the Companies Act. Therefore, the individual entities did not hold a general meeting ofshareholders to carry out the Merger.
3) Details of allocation related to the merger
Since Olympus Logitex is a wholly owned subsidiary of the Company, there has been no allotment ofshares or money due to the merger.
4) Overview of the surviving company of the absorption-type merger (as of March 31, 2022)
Name:

Olympus Corporation

Capital:¥124,643 million

Description of business:

Manufacture and sale of medical equipment, scientific equipment,etc.

(Transfer of significant assets)
From the viewpoint of optimization of management resources, the Company reviewed its assets andtransferred its fixed assets (land) on April 27, 2022.
(1)

Details of the asset transferred
1) Classification and location of the asset: Land_Approx. 10,395m2 (2-chome Hatagaya, Shibuya-ku,
Tokyo)(2)

2) Current status:

Parking lot3) Gain on transfer:¥16,395 million

Overview of the Transferee

There are no capital relationships, personal relationships, business relationships and nothing special to note asa related party between the Company and the transferee.
(3)

Schedule of transfer
1) Date of decision:

March 30, 2022

2) Date of agreement:

March 30, 2022

3) Property transfer date:

April 27, 2022

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(Disposal of treasury shares)
The Company conducted a disposal of its treasury shares based on its subsequent grant-type restricted stockcompensation system (Restricted Stock Unit (RSU)) and performance-linked stock compensation system(Performance Stock Unit (PSU)) as follows. The Company introduced the PSU system in the fiscal year
ended March 31, 2018 as a form of stock compensation to directors (excluding outside directors) andcorporate officers until the fiscal year ended March 31, 2019. After its transition into a company with aNominating Committee etc. in June 2019, Olympus further worked on reviewing its compensation systems
under a basic concept to appropriately and fairly reward directors (including outside directors) and executive
officers who fulfill their responsibilites through encouraging strong awareness “to maximize the corporate
value and to meet expectations of various stakeholders,” and additionally introduced the RSU system fromthe fiscal year ended March 31, 2021 as a result. The Company has introduced a similar RSU system tocorporate officers as well since the fiscal year ended March 31, 2022. This disposal of treasury shares ismade as stock compensation for recipients including directors, executive officers and corporate officers basedon these RSU and PSU systems. Each of eligible directors, executive officers and corporate officers paid theentire amount of their monetary compensation claims to the Company as contributed assets in kind and then,received its shares to be disposed of.
Summary of the Disposal(1)
Date of disposal(2)
Class and numberof shares for
disposal
(3)
(4)
(5)

(6)

Disposal priceTotal amount ofdisposal value
Disposal recipients,
the number of such
recipients, and thenumber of shares tobe disposed of

Other

July 22, 2022
87,840 shares of common share of Olympus
Breakdown:
RSU 16,567 shares
PSU 71,273 shares¥2,680 per share¥235,411,200
RSU granted for the fiscal year ended March 31, 2021
Two retiring directors
3,082 shares
One retired executive officer
6,722 shares② RSU granted for the fiscal year ended March 31, 2022
Two retiring directors and one non-resident director in
3,921 sharesJapan
One retired executive officer
768 shares③ Transformational FY22-RSU granted for the fiscal year ended March 31,2022
One retired corporate officer
2,074 shares④ PSU granted for the performance evaluation period starting from the fiscal
year ended March 31, 2020 and ending in the fiscal year ended March 31,
2022
Three executive officers, three retired executive
officers, nine corporate officers and eight retired
71,273 shares
corporate officers①※Those officers retired in the fiscal years ended March 31, 2020 and 2021 areincluded in the retired executive officers and retired corporate officers.
Olympus has submitted a securities notice regarding the disposal of treasury
shares in accordance with the Financial Instruments and Exchange Act.

95

Other Information
Quarterly information for the fiscal year ended March 31, 2022
Millions of yen(Cumulative period)
Revenue
Profit before tax
Profit attributable to owners of parent
Basic earnings per share (yen)(Accounting period)
Basic earnings per share (yen)Three months

Six months

Nine months

Year-end¥191,517
26,952
18,690¥14.54¥413,059
73,84662,397¥48.53¥629,757
103,635
87,667¥68.19¥868,867
149,873
115,742¥90.22First quarter

Second quarter

Third quarter

Fourth quarter¥14.54¥34.00¥19.66¥22.0296