Japan's second biggest pharmaceutical firm Daiichi Sankyo today said it plans to record a valuation loss of $3.9 billion on its shares in its India-based subsidiary Ranbaxy Laboratories to reflect the decline in market value of equities.
"On a non consolidated basis, Daiichi Sankyo plans to record a non-cash valuation loss of $3.9 billion on its shares in Ranbaxy in its third-quarter to reflect a more than 50 per cent decline in market value of these securities versus the purchase price," the Japanese company said in a statement.
The company also said it would suffer a one-time loss of $3.8 billion on consolidated basis for its investments in Ranbaxy Laboratories.
Daiichi has taken this step to meet the accounting standards, it added.
"However, these items will have a significant negative impact on the company's consolidated financial results forecasts for net income in the fiscal," the Japanese drug major said.
Daiichi Sankyo has based its estimates for the one-time write-down of goodwill on its investment in Ranbaxy to fully reflect the impact of the current turmoil in global equities, the company said.
