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## 15. Leases 

## (1) Lessee 

## a. Finance leases 

The Group mainly leases computer equipment and store fixtures of the distribution and retail business. 

Total rental expenses including lease payments under finance leases for the years ended March 31, 2010 and 2009 were ¥1,546 million ($16,618 thousand) and ¥2,014 million, respectively. 

For the year ended March 31, 2010, the Group recorded an impairment loss of ¥76 million ($820 thousand) on certain leased property held under finance leases that do not transfer ownership and an allowance for an impairment loss on leased property, which is included in long-term liabilities—other. 

For the year ended March 31, 2009, the Group recorded an impairment loss of ¥1 million on certain leased property held under finance leases that do not transfer ownership and an allowance for an impairment loss on leased property, which is included in long-term liabilities—other. 

As discussed in Note 2.o, the Company accounts for leases which existed at the transition date and do not transfer ownership of the leased property to the lessee as operating lease transactions. Pro forma information of such leases existing at the transition date for the years ended March 31, 2010 and 2009 such as acquisition cost, accumulated depreciation, accumulated impairment loss, obligations under finance leases, depreciation expense, interest expense and other information of finance leases that do not transfer ownership of the leased property to the lessee on an “as if capitalized” basis was as follows: 

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Obligations under finance leases: 

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Allowances for impairment loss on leased property of ¥53 million ($566 thousand) as of March 31, 2010 and ¥1 million as of March 31, 2009 are included in the obligations under finance leases. The imputed interest expense portion which is computed using the interest method is excluded from the above obligations under finance leases. 

Depreciation expense, interest expense and other information under finance leases: 

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Depreciation expense and interest expense, which are not reflected in the accompanying consolidated statements of opera- tions, are computed by the straight-line method and the interest method, respectively. 

