The Tokyo Electric Power Co. on Friday reported a net loss of 1.2 trillion yen ($15.4 billion) for the fiscal year that ended March 31. Tokyo Electric also announced it will decommission reactors Nos. 1-4 at Fukushima Daiichi and has also canceled plans to build two other reactors at the site. In addition to the company’s earnings, Tokyo Electric president Masataka Shimizu announced his resignation Friday, which must be approved by the board of directors at a June meeting.
A restructuring plan was announced to boost company finances and help create more than a trillion yen in savings. The Fukushima Daiichi plant has faced a series of setbacks since a magnitude 9.0 earthquake and tsunami struck on March 11. The disasters triggered a glitch in the plant’s cooling system, and caused radiation to leak.
1. Based on the video and the article, how much compensation is being made to some of the families directly affected by the tragedy?
2. Under IFRS, how would these payments be accounted for?
3. What is the anticipated total compensation projected?
4. What measures is the company taking to make up losses?
Lah, K. and Wakatsuki, Y. (2011). Tokyo Electric reports $15 billion net loss after earthquake, tsunami, CNN.com (Retrievable online at http://www.cnn.com/2011/BUSINESS/05/20/japan.tokyo.electric.earnings/index.html)
CNN.com Video (2011)., TEPCO Reports Massive Losses, May 20. (Retrievable online at www.cnn.com/videos)