Tarceva Government Investigation Early retirement incentive program Business combinations: (1) Exemptions to retrospective application of IFRS Use of fair value as deemed cost: Share-based payment transactions: (2) Reconciliations Exchange differences on translating foreign operations: 39. events after the reporting perioD 40. first-tiMe aDoption In November of 2011, OSI Pharmaceuticals, LLC (OSI), one of  the Company’s indirect US subsidiaries, received a subpoena  from the U.S. Department of Justice, represented by the U.S.  Attorney’s Office in San Francisco, California, requesting docu- ments and other information concerning the promotion,  marketing, and sale of Tarceva in the US. The investigation is  civil and criminal in nature. OSI is in the process of responding  to the subpoena, and OSI is continuing to cooperate fully with  the investigation. We cannot predict or determine the timing or  outcome of this investigation or its impact on our financial  condition or results of operations at this time. Amid a rapidly changing business environment, the Group is  targeting sustainable growth by focusing on three strategic  initiatives: maximizing the value of new products; enhancing  the Group’s ability to generate innovative drugs; and achieving  operational excellence. structure, as a result of which organizational and personnel  requirements are changing. Accordingly, the Group is aligning  human resources with the new business structure by offering an  early retirement incentive program to 300 employees working  at the Company and its domestic subsidiaries in June 2014. The impact of this program on the Group’s financial results of  operation for the year ending 31 March 2015 is yet to be seen. This series of initiatives is transforming the business  The Group disclosed the consolidated financial statements  under IFRS for the first time for the fiscal year ended 31  March 2014. The latest consolidated financial statements under account- ing principles generally accepted in Japan (“Japanese GAAP”)  are prepared for the fiscal year ended 31 March 2013 and the  date of transition to IFRS is 1 April 2012. exemption and deemed all cumulative exchange differences on  translating foreign operations as zero at the date of transition  to IFRS. IFRS 1 permits an entity not to apply IFRS 3 “Business  Combinations” retrospectively to business combinations that  occurred prior to the date of transition to IFRS. The Group  elected to apply this exemption and did not apply IFRS 3  retrospectively to business combinations that occurred before  the date of transition to IFRS. Further, the Group performed an  impairment test on goodwill at the date of transition to IFRS  regardless of whether there was any indication that the goodwill  may be impaired. IFRS 1 stipulates that an entity adopting IFRS for the first time  shall apply IFRS retrospectively to prior periods. However, IFRS  1 allows certain exemptions from the retrospective application  of certain aspects of IFRS, and accordingly the Group has  applied the following exemptions: IFRS 1 permits an entity to measure items of property, plant  and equipment, investment property and intangible assets at  the date of transition to IFRS at its fair value and use that fair  value as deemed cost at that date. The Group elected to use  the fair value at the date of transition to IFRS as deemed cost  at the date of transition to IFRS for certain items of property,  plant and equipment. Further, the Group elected to use the  cost model for items of property, plant and equipment and  intangible assets under IFRS, thus the revaluation model is  not applied. IFRS 1 permits an entity not to apply IFRS 2 “Share-based  Payment” to equity instruments granted on or after 7 November  2002 and vested before the later of the date of transition to  IFRS and 1 January 2005. The Group elected not to apply  IFRS 2 to equity instruments granted on or after 7 November  2002 and vested before the date of transition to IFRS. The reconciliations required to be disclosed in the first IFRS  financial statements are described below. In the reconciliations below, “Presentation” includes items  that do not affect retained earnings and comprehensive  income, while “Recognition and measurement” includes items  that affect retained earnings and comprehensive income. IFRS 1 permits the cumulative amount of exchange differences  on translating foreign operations to be deemed to be zero at  the date of transition to IFRS. The Group elected to apply this  Annual Report 2014 _  Astellas Pharma Inc.  149 Financial Section