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v3.25.2

Fair Value Measurements | 12 Months Ended
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Mar. 31, 2025
Fair Value Disclosures [Abstract] |
Fair Value Measurements | 2. Fair Value Measurements The Company and its subsidiaries classify and prioritize inputs used in valuation techniques to measure fair value into the following three levels:
Level 1 |  | — |  | Inputs of quoted prices (unadjusted) in active markets for identical assets or liabilities that the reporting entity has the ability to access at the measurement date.
Level 2 |  | — |  | Inputs other than quoted prices included within Level 1 that are observable for the assets or liabilities, either directly or indirectly.
Level 3 |  | — |  | Unobservable inputs for the assets or liabilities.
The Company and its subsidiaries differentiate between those assets and liabilities required to be carried at fair value at every reporting period (“recurring”) and those assets and liabilities that are only required to be adjusted to fair value under certain circumstances (“nonrecurring”). The Company and its subsidiaries mainly measure certain loans held for sale, trading debt securities, available-for-sale debt securities, certain equity securities, derivatives, certain reinsurance recoverables, variable annuity and variable life insurance contracts, and certain accounts payable at fair value on a recurring basis. The following tables present recorded amounts of major financial assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and 2025: March 31, 2024
|  | Millions of yen |
|  | Total Carrying Value in Consolidated Balance Sheets |  |  | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans held for sale*1 |  | ¥ | 129,959 |  |  | ¥ | 0 |  |  | ¥ | 33,393 |  |  | ¥ | 96,566 |
Available-for-sale debt securities: |  |  | 2,665,478 |  |  |  | 11,491 |  |  |  | 2,334,690 |  |  |  | 319,297 |
Japanese and foreign government bond securities*2 |  |  | 1,034,914 |  |  |  | 4,303 |  |  |  | 1,030,611 |  |  |  | 0 |
Japanese prefectural and foreign municipal bond securities |  |  | 401,465 |  |  |  | 0 |  |  |  | 390,543 |  |  |  | 10,922 |
Corporate debt securities*3 |  |  | 844,579 |  |  |  | 7,188 |  |  |  | 831,805 |  |  |  | 5,586 |
CMBS and RMBS in the Americas |  |  | 87,740 |  |  |  | 0 |  |  |  | 80,575 |  |  |  | 7,165 |
Other asset-backed securities and debt securities |  |  | 296,780 |  |  |  | 0 |  |  |  | 1,156 |  |  |  | 295,624 |
Equity securities*4*5 |  |  | 415,607 |  |  |  | 108,964 |  |  |  | 143,786 |  |  |  | 162,857 |
Derivative assets: |  |  | 72,986 |  |  |  | 52 |  |  |  | 66,433 |  |  |  | 6,501 |
Interest rate swap agreements |  |  | 18,995 |  |  |  | 0 |  |  |  | 18,995 |  |  |  | 0 |
Options held/written and other |  |  | 15,349 |  |  |  | 0 |  |  |  | 8,848 |  |  |  | 6,501 |
Futures, foreign exchange contracts |  |  | 38,172 |  |  |  | 52 |  |  |  | 38,120 |  |  |  | 0 |
Foreign currency swap agreements |  |  | 470 |  |  |  | 0 |  |  |  | 470 |  |  |  | 0 |
Netting*6 |  |  | (47,496 | ) |  |  | — |  |  |  | — |  |  |  | — |
Net derivative assets |  |  | 25,490 |  |  |  | — |  |  |  | — |  |  |  | — |
Other assets: |  |  | 2,786 |  |  |  | 0 |  |  |  | 0 |  |  |  | 2,786 |
Reinsurance recoverables*7 |  |  | 2,786 |  |  |  | 0 |  |  |  | 0 |  |  |  | 2,786 |
Total |  | ¥ | 3,286,816 |  |  | ¥ | 120,507 |  |  | ¥ | 2,578,302 |  |  | ¥ | 588,007 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities: |  | ¥ | 95,686 |  |  | ¥ | 607 |  |  | ¥ | 90,862 |  |  | ¥ | 4,217 |
Interest rate swap agreements |  |  | 3,728 |  |  |  | 0 |  |  |  | 3,728 |  |  |  | 0 |
Options held/written and other |  |  | 14,394 |  |  |  | 0 |  |  |  | 10,177 |  |  |  | 4,217 |
Futures, foreign exchange contracts |  |  | 70,997 |  |  |  | 607 |  |  |  | 70,390 |  |  |  | 0 |
Foreign currency swap agreements |  |  | 6,563 |  |  |  | 0 |  |  |  | 6,563 |  |  |  | 0 |
Credit derivatives written |  |  | 4 |  |  |  | 0 |  |  |  | 4 |  |  |  | 0 |
Netting*6 |  |  | (47,496 | ) |  |  | — |  |  |  | — |  |  |  | — |
Net derivative Liabilities |  |  | 48,190 |  |  |  | — |  |  |  | — |  |  |  | — |
Policy Liabilities and Policy Account Balances: |  |  | 167,207 |  |  |  | 0 |  |  |  | 0 |  |  |  | 167,207 |
Variable annuity and variable life insurance contracts*8 |  |  | 167,207 |  |  |  | 0 |  |  |  | 0 |  |  |  | 167,207 |
Accounts Payable |  |  | 14,136 |  |  |  | 0 |  |  |  | 0 |  |  |  | 14,136 |
Contingent Consideration |  |  | 14,136 |  |  |  | 0 |  |  |  | 0 |  |  |  | 14,136 |
Total |  | ¥ | 277,029 |  |  | ¥ | 607 |  |  | ¥ | 90,862 |  |  | ¥ | 185,560 |
March 31, 2025
|  | Millions of yen |
|  | Total Carrying Value in Consolidated Balance Sheets |  |  | Quoted Prices in Active Markets for Identical Assets or Liabilities (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans held for sale*1 |  | ¥ | 97,694 |  |  | ¥ | 0 |  |  | ¥ | 29,900 |  |  | ¥ | 67,794 |
Available-for-sale debt securities: |  |  | 2,607,637 |  |  |  | 12,243 |  |  |  | 2,377,740 |  |  |  | 217,654 |
Japanese and foreign government bond securities*2 |  |  | 1,092,526 |  |  |  | 7,510 |  |  |  | 1,085,016 |  |  |  | 0 |
Japanese prefectural and foreign municipal bond securities |  |  | 406,830 |  |  |  | 0 |  |  |  | 395,952 |  |  |  | 10,878 |
Corporate debt securities*3 |  |  | 802,545 |  |  |  | 4,733 |  |  |  | 793,560 |  |  |  | 4,252 |
CMBS and RMBS in the Americas |  |  | 106,751 |  |  |  | 0 |  |  |  | 99,669 |  |  |  | 7,082 |
Other asset-backed securities and debt securities |  |  | 198,985 |  |  |  | 0 |  |  |  | 3,543 |  |  |  | 195,442 |
Equity securities*4*5 |  |  | 418,690 |  |  |  | 137,014 |  |  |  | 119,466 |  |  |  | 162,210 |
Derivative assets: |  |  | 64,170 |  |  |  | 361 |  |  |  | 54,992 |  |  |  | 8,817 |
Interest rate swap agreements |  |  | 17,869 |  |  |  | 0 |  |  |  | 17,869 |  |  |  | 0 |
Options held/written and other |  |  | 15,767 |  |  |  | 0 |  |  |  | 6,950 |  |  |  | 8,817 |
Futures, foreign exchange contracts |  |  | 20,964 |  |  |  | 361 |  |  |  | 20,603 |  |  |  | 0 |
Foreign currency swap agreements |  |  | 9,570 |  |  |  | 0 |  |  |  | 9,570 |  |  |  | 0 |
Netting*6 |  |  | (20,495 | ) |  |  | — |  |  |  | — |  |  |  | — |
Net derivative assets |  |  | 43,675 |  |  |  | — |  |  |  | — |  |  |  | — |
Other assets: |  |  | 2,586 |  |  |  | 0 |  |  |  | 0 |  |  |  | 2,586 |
Reinsurance recoverables*7 |  |  | 2,586 |  |  |  | 0 |  |  |  | 0 |  |  |  | 2,586 |
Total |  | ¥ | 3,190,777 |  |  | ¥ | 149,618 |  |  | ¥ | 2,582,098 |  |  | ¥ | 459,061 |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities: |  | ¥ | 56,038 |  |  | ¥ | 129 |  |  | ¥ | 55,257 |  |  | ¥ | 652 |
Interest rate swap agreements |  |  | 2,774 |  |  |  | 0 |  |  |  | 2,774 |  |  |  | 0 |
Options held/written and other |  |  | 13,715 |  |  |  | 0 |  |  |  | 13,063 |  |  |  | 652 |
Futures, foreign exchange contracts |  |  | 39,387 |  |  |  | 129 |  |  |  | 39,258 |  |  |  | 0 |
Foreign currency swap agreements |  |  | 159 |  |  |  | 0 |  |  |  | 159 |  |  |  | 0 |
Credit derivatives written |  |  | 3 |  |  |  | 0 |  |  |  | 3 |  |  |  | 0 |
Netting*6 |  |  | (20,495 | ) |  |  | — |  |  |  | — |  |  |  | — |
Net derivative Liabilities |  |  | 35,543 |  |  |  | — |  |  |  | — |  |  |  | — |
Policy Liabilities and Policy Account Balances: |  |  | 136,257 |  |  |  | 0 |  |  |  | 0 |  |  |  | 136,257 |
Variable annuity and variable life insurance contracts*8 |  |  | 136,257 |  |  |  | 0 |  |  |  | 0 |  |  |  | 136,257 |
Accounts Payable |  |  | 15,259 |  |  |  | 0 |  |  |  | 0 |  |  |  | 15,259 |
Contingent Consideration |  |  | 15,259 |  |  |  | 0 |  |  |  | 0 |  |  |  | 15,259 |
Total |  | ¥ | 207,554 |  |  | ¥ | 129 |  |  | ¥ | 55,257 |  |  | ¥ | 152,168 |
*1 | A certain subsidiary elected the fair value option on certain loans held for sale. These loans are multi-family and seniors housing loans and are sold to Federal National Mortgage Association (“Fannie Mae”), Federal Home Loan Mortgage Corporation (“Freddie Mac”) and institutional investors. Included in “Other (income) and expense” in the consolidated statements of income were a loss of ¥2,429 million, a gain of ¥428 million and a loss of ¥1,052 million from the change in the fair value of the loans for fiscal 2023, 2024 and 2025,
| respectively. No gains or losses were recognized in earnings during fiscal 2023, 2024 and 2025 attributable to changes in instrument-specific credit risk. The amounts of aggregate unpaid principal balance and aggregate fair value of the loans held for sale as of March 31, 2024, were ¥130,554 million and ¥129,959 million, respectively, and the amount of the aggregate fair value was less than the amount of aggregate unpaid principal balance by ¥595 million. The amounts of aggregate unpaid principal balance and aggregate fair value of the loans held for sale as of March 31, 2025, were ¥98,135 million and ¥97,694 million, respectively, and the amount of the aggregate fair value was less than the amount of aggregate unpaid principal balance by ¥441 million. As of March 31, 2024, there were no loans that are 90 days or more past due or, in non-accrual status. The amounts of aggregate unpaid principal balance and aggregate fair value of loans that are 90 days or more past due or, in non-accrual status as of March 31, 2025, were ¥17,098 million and ¥16,346 million, respectively, and the amount of the aggregate fair value was less than the amount of aggregate unpaid principal balance by ¥752 million.
*2 | A certain subsidiary elected the fair value option for investments in foreign government bond securities included in available-for-sale debt securities. Included in “Gains on investment securities and dividends” in the consolidated statements of income were losses of ¥11 million, ¥6 million and ¥59 million from the change in the fair value of those investments for fiscal 2023, 2024 and 2025, respectively. The amount of aggregate fair value elected the fair value option were ¥1,000 million and ¥5,379 million as of March 31, 2024 and 2025, respectively.
*3 | A certain subsidiary elected the fair value option for investments in foreign corporate debt securities included in available-for-sale debt securities. Included in “Gains on investment securities and dividends” in the consolidated statements of income were a loss of ¥516 million, gains of ¥399 million and ¥441 million from the change in the fair value of those investments for fiscal 2023, 2024 and 2025, respectively. The amounts of aggregate fair value elected the fair value option were ¥7,751 million and ¥10,679 million as of March 31, 2024 and 2025, respectively.
*4 | Certain subsidiaries elected the fair value option for certain investments in investment funds and others included in equity securities. Included in “Gains on investment securities and dividends” and “Life insurance premiums and related investment income” in the consolidated statements of income were gains of ¥1,066 million, ¥3,269 million and ¥1,954 million from the change in the fair value of those investments for fiscal 2023, 2024 and 2025, respectively. The amounts of aggregate fair value elected the fair value option were ¥26,945 million and ¥24,960 million as of March 31, 2024 and 2025, respectively.
*5 | The amounts of investment funds measured at net asset value per share which are not included in the above tables were ¥85,280 million and ¥118,666 million as of March 31, 2024 and 2025, respectively.
*6 | It represents the amount offset under counterparty netting of derivative assets and liabilities.
*7 | Certain subsidiaries elected the fair value option for certain reinsurance contracts held. The fair value of the reinsurance contracts elected for the fair value option in other assets were ¥2,786 million and ¥2,586 million as of March 31, 2024 and 2025, respectively. For the effect of changes in the fair value of those reinsurance contracts on earnings for fiscal 2023, 2024 and 2025, see Note 23 “Income and Expenses Relating to Life Insurance Operations.”
*8 | Certain subsidiaries elected the fair value option for the entire variable annuity and variable life insurance contracts held. The fair value of the variable annuity and variable life insurance contracts elected for the fair value option in policy liabilities and policy account balances were ¥167,207 million and ¥136,257 million as of March 31, 2024 and 2025, respectively. For the effect of changes in the fair value of the variable annuity and variable life insurance contracts on earnings for fiscal 2023, 2024 and 2025, see Note 23 “Income and Expenses Relating to Life Insurance Operations.”
The following tables present the reconciliation of financial assets and liabilities (net) measured at fair value on a recurring basis using significant unobservable inputs (Level 3) in fiscal 2023, 2024 and 2025: 2023
|  | Millions of yen |
|  | Balance at April 1, 2022 |  |  | Gains or losses (realized/unrealized) |  |  | Purchases*3 |  |  | Sales |  |  | Settlements*4 |  |  | Transfers in and/ or out of Level 3 (net) |  |  | Balance at March 31, 2023 |  |  | Change in unrealized gains or losses included in earnings for assets and liabilities still held at March 31, 2023*1 |  |  | Change in unrealized gains or losses included in other comprehensive income for assets and liabilities still held at March 31, 2023*2 |
| Included in earnings*1 |  |  | Included in other comprehensive income*2 |  |  | Total |
Loans held for sale |  | ¥ | 0 |  |  | ¥ | 18 |  |  | ¥ | 1,095 |  |  | ¥ | 1,113 |  |  | ¥ | 2,457 |  |  | ¥ | (5,776 | ) |  | ¥ | 0 |  |  | ¥ | 176,055 |  |  | ¥ | 173,849 |  |  | ¥ | 18 |  |  | ¥ | 1,095 |
Available-for-sale debt securities |  |  | 141,060 |  |  |  | 3,788 |  |  |  | 1,238 |  |  |  | 5,026 |  |  |  | 116,175 |  |  |  | (9,100 | ) |  |  | (9,559 | ) |  |  | 0 |  |  |  | 243,602 |  |  |  | 3,458 |  |  |  | 1,713 |
Japanese prefectural and foreign municipal bond securities |  |  | 3,053 |  |  |  | 0 |  |  |  | 278 |  |  |  | 278 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 3,331 |  |  |  | 0 |  |  |  | 278 |
Corporate debt securities |  |  | 697 |  |  |  | 89 |  |  |  | (1 | ) |  |  | 88 |  |  |  | 5,922 |  |  |  | (1,554 | ) |  |  | (416 | ) |  |  | 0 |  |  |  | 4,737 |  |  |  | (16 | ) |  |  | (0 | )
Other asset-backed securities and debt securities |  |  | 137,310 |  |  |  | 3,699 |  |  |  | 961 |  |  |  | 4,660 |  |  |  | 110,253 |  |  |  | (7,546 | ) |  |  | (9,143 | ) |  |  | 0 |  |  |  | 235,534 |  |  |  | 3,474 |  |  |  | 1,435 |
Equity securities |  |  | 112,972 |  |  |  | 22,823 |  |  |  | 9,647 |  |  |  | 32,470 |  |  |  | 7,191 |  |  |  | (7,223 | ) |  |  | (2,336 | ) |  |  | 0 |  |  |  | 143,074 |  |  |  | 22,113 |  |  |  | 9,514 |
Investment funds |  |  | 112,972 |  |  |  | 22,823 |  |  |  | 9,647 |  |  |  | 32,470 |  |  |  | 7,191 |  |  |  | (7,223 | ) |  |  | (2,336 | ) |  |  | 0 |  |  |  | 143,074 |  |  |  | 22,113 |  |  |  | 9,514 |
Derivative assets and liabilities (net) |  |  | (3,772 | ) |  |  | (2,845 | ) |  |  | (1,207 | ) |  |  | (4,052 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (7,824 | ) |  |  | (2,845 | ) |  |  | (1,207 | )
Options held/written and other |  |  | (3,772 | ) |  |  | (2,845 | ) |  |  | (1,207 | ) |  |  | (4,052 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | (7,824 | ) |  |  | (2,845 | ) |  |  | (1,207 | )
Other asset |  |  | 5,214 |  |  |  | (1,286 | ) |  |  | 0 |  |  |  | (1,286 | ) |  |  | 1,153 |  |  |  | 0 |  |  |  | (405 | ) |  |  | 0 |  |  |  | 4,676 |  |  |  | (1,286 | ) |  |  | 0 |
Reinsurance recoverables*5 |  |  | 5,214 |  |  |  | (1,286 | ) |  |  | 0 |  |  |  | (1,286 | ) |  |  | 1,153 |  |  |  | 0 |  |  |  | (405 | ) |  |  | 0 |  |  |  | 4,676 |  |  |  | (1,286 | ) |  |  | 0 |
Policy Liabilities and Policy Account Balances |  |  | 198,905 |  |  |  | 6,343 |  |  |  | 74 |  |  |  | 6,417 |  |  |  | 0 |  |  |  | 0 |  |  |  | (28,754 | ) |  |  | 0 |  |  |  | 163,734 |  |  |  | 6,343 |  |  |  | 74 |
Variable annuity and variable life insurance contracts*6 |  |  | 198,905 |  |  |  | 6,343 |  |  |  | 74 |  |  |  | 6,417 |  |  |  | 0 |  |  |  | 0 |  |  |  | (28,754 | ) |  |  | 0 |  |  |  | 163,734 |  |  |  | 6,343 |  |  |  | 74 |
2024
|  | Millions of yen |
|  | Balance at April 1, 2023 |  |  | Gains or losses (realized/unrealized) |  |  | Purchases*3 |  |  | Sales |  |  | Settlements*4 |  |  | Transfers in and/ or out of Level 3 (net) |  |  | Balance at March 31, 2024 |  |  | Change in unrealized gains or losses included in earnings for assets and liabilities still held at March 31, 2024*1 |  |  | Change in unrealized gains or losses included in other comprehensive income for assets and liabilities still held at March 31, 2024*2 |
| Included in earnings*1 |  |  | Included in other comprehensive income*2 |  |  | Total |
Loans held for sale |  | ¥ | 173,849 |  |  | ¥ | 566 |  |  | ¥ | 18,937 |  |  | ¥ | 19,503 |  |  | ¥ | 4,467 |  |  | ¥ | (66,078 | ) |  | ¥ | (35,175 | ) |  | ¥ | 0 |  |  | ¥ | 96,566 |  |  | ¥ | 0 |  |  | ¥ | 18,937 |
Available-for-sale debt securities |  |  | 243,602 |  |  |  | 13,906 |  |  |  | 17,117 |  |  |  | 31,023 |  |  |  | 68,295 |  |  |  | (15,041 | ) |  |  | (15,400 | ) |  |  | 6,818 |  |  |  | 319,297 |  |  |  | 12,918 |  |  |  | 18,018 |
Japanese prefectural and foreign municipal bond securities |  |  | 3,331 |  |  |  | (75 | ) |  |  | 866 |  |  |  | 791 |  |  |  | 0 |  |  |  | 0 |  |  |  | (18 | ) |  |  | 6,818 |  |  |  | 10,922 |  |  |  | (75 | ) |  |  | 809 |
Corporate debt securities |  |  | 4,737 |  |  |  | 974 |  |  |  | 1 |  |  |  | 975 |  |  |  | 14 |  |  |  | 0 |  |  |  | (140 | ) |  |  | 0 |  |  |  | 5,586 |  |  |  | 608 |  |  |  | 1 |
CMBS and RMBS in the Americas |  |  | 0 |  |  |  | 0 |  |  |  | 286 |  |  |  | 286 |  |  |  | 6,879 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 7,165 |  |  |  | 0 |  |  |  | 282 |
Other asset-backed securities and debt securities |  |  | 235,534 |  |  |  | 13,007 |  |  |  | 15,964 |  |  |  | 28,971 |  |  |  | 61,402 |  |  |  | (15,041 | ) |  |  | (15,242 | ) |  |  | 0 |  |  |  | 295,624 |  |  |  | 12,385 |  |  |  | 16,926 |
Equity securities |  |  | 143,074 |  |  |  | (841 | ) |  |  | 18,617 |  |  |  | 17,776 |  |  |  | 4,675 |  |  |  | (495 | ) |  |  | (2,173 | ) |  |  | 0 |  |  |  | 162,857 |  |  |  | (1,097 | ) |  |  | 18,617 |
Investment funds |  |  | 143,074 |  |  |  | (841 | ) |  |  | 18,617 |  |  |  | 17,776 |  |  |  | 4,675 |  |  |  | (495 | ) |  |  | (2,173 | ) |  |  | 0 |  |  |  | 162,857 |  |  |  | (1,097 | ) |  |  | 18,617 |
Derivative assets and liabilities (net) |  |  | (7,824 | ) |  |  | 10,595 |  |  |  | (487 | ) |  |  | 10,108 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 2,284 |  |  |  | 10,595 |  |  |  | (487 | )
Options held/written and other |  |  | (7,824 | ) |  |  | 10,595 |  |  |  | (487 | ) |  |  | 10,108 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 2,284 |  |  |  | 10,595 |  |  |  | (487 | )
Other asset |  |  | 4,676 |  |  |  | (2,711 | ) |  |  | 0 |  |  |  | (2,711 | ) |  |  | 971 |  |  |  | 0 |  |  |  | (150 | ) |  |  | 0 |  |  |  | 2,786 |  |  |  | (2,711 | ) |  |  | 0 |
Reinsurance recoverables*5 |  |  | 4,676 |  |  |  | (2,711 | ) |  |  | 0 |  |  |  | (2,711 | ) |  |  | 971 |  |  |  | 0 |  |  |  | (150 | ) |  |  | 0 |  |  |  | 2,786 |  |  |  | (2,711 | ) |  |  | 0 |
Policy Liabilities and Policy Account Balances |  |  | 163,734 |  |  |  | (30,205 | ) |  |  | (265 | ) |  |  | (30,470 | ) |  |  | 0 |  |  |  | 0 |  |  |  | (26,997 | ) |  |  | 0 |  |  |  | 167,207 |  |  |  | (30,205 | ) |  |  | (265 | )
Variable annuity and variable life insurance contracts*6 |  |  | 163,734 |  |  |  | (30,205 | ) |  |  | (265 | ) |  |  | (30,470 | ) |  |  | 0 |  |  |  | 0 |  |  |  | (26,997 | ) |  |  | 0 |  |  |  | 167,207 |  |  |  | (30,205 | ) |  |  | (265 | )
Accounts Payable: |  |  | 12,576 |  |  |  | (47 | ) |  |  | (1,513 | ) |  |  | (1,560 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 14,136 |  |  |  | (47 | ) |  |  | (1,513 | )
Contingent Consideration |  |  | 12,576 |  |  |  | (47 | ) |  |  | (1,513 | ) |  |  | (1,560 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 14,136 |  |  |  | (47 | ) |  |  | (1,513 | )
2025
|  | Millions of yen |
| Balance at April 1, 2024 |  |  | Gains or losses (realized/unrealized) |  |  | Purchases*3 |  |  | Sales |  |  | Settlements*4 |  |  | Transfers in and/ or out of Level 3 (net) |  |  | Balance at March 31, 2025 |  |  | Change in unrealized gains or losses included in earnings for assets and liabilities still held at March 31, 2025*1 |  |  | Change in unrealized gains or losses included in other comprehensive income for assets and liabilities still held at March 31, 2025*2 |
| Included in earning s *1 |  |  | Included in other comprehensive income*2 |  |  | Total |
Loans held for sale |  | ¥ | 96,566 |  |  | ¥ | (1,778 | ) |  | ¥ | (543 | ) |  | ¥ | (2,321 | ) |  | ¥ | 633 |  |  | ¥ | 0 |  |  | ¥ | (27,084 | ) |  | ¥ | 0 |  |  | ¥ | 67,794 |  |  | ¥ | (708 | ) |  | ¥ | (543 | )
Available-for-sale debt securities |  |  | 319,297 |  |  |  | 1,336 |  |  |  | (1,437 | ) |  |  | (101 | ) |  |  | 99,785 |  |  |  | (56,749 | ) |  |  | (144,578 | ) |  |  | 0 |  |  |  | 217,654 |  |  |  | 370 |  |  |  | (463 | )
Japanese prefectural and foreign municipal bond securities |  |  | 10,922 |  |  |  | (107 | ) |  |  | 82 |  |  |  | (25 | ) |  |  | 0 |  |  |  | 0 |  |  |  | (19 | ) |  |  | 0 |  |  |  | 10,878 |  |  |  | (107 | ) |  |  | 82 |
Corporate debt securities |  |  | 5,586 |  |  |  | 235 |  |  |  | (17 | ) |  |  | 218 |  |  |  | 300 |  |  |  | (1,712 | ) |  |  | (140 | ) |  |  | 0 |  |  |  | 4,252 |  |  |  | (73 | ) |  |  | (17 | )
CMBS and RMBS in the Americas |  |  | 7,165 |  |  |  | 0 |  |  |  | (83 | ) |  |  | (83 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 7,082 |  |  |  | 0 |  |  |  | (83 | )
Other asset-backed securities and debt securities |  |  | 295,624 |  |  |  | 1,208 |  |  |  | (1,419 | ) |  |  | (211 | ) |  |  | 99,485 |  |  |  | (55,037 | ) |  |  | (144,419 | ) |  |  | 0 |  |  |  | 195,442 |  |  |  | 550 |  |  |  | (445 | )
Equity securities |  |  | 162,857 |  |  |  | (8,129 | ) |  |  | (2,089 | ) |  |  | (10,218 | ) |  |  | 20,113 |  |  |  | (656 | ) |  |  | (9,886 | ) |  |  | 0 |  |  |  | 162,210 |  |  |  | (8,163 | ) |  |  | (2,099 | )
Investment funds and other |  |  | 162,857 |  |  |  | (8,129 | ) |  |  | (2,089 | ) |  |  | (10,218 | ) |  |  | 20,113 |  |  |  | (656 | ) |  |  | (9,886 | ) |  |  | 0 |  |  |  | 162,210 |  |  |  | (8,163 | ) |  |  | (2,099 | )
Derivative assets and liabilities (net) |  |  | 2,284 |  |  |  | 5,480 |  |  |  | 401 |  |  |  | 5,881 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 8,165 |  |  |  | 5,480 |  |  |  | 401 |
Options held/written and other |  |  | 2,284 |  |  |  | 5,480 |  |  |  | 401 |  |  |  | 5,881 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 8,165 |  |  |  | 5,480 |  |  |  | 401 |
Other asset |  |  | 2,786 |  |  |  | (1,027 | ) |  |  | 0 |  |  |  | (1,027 | ) |  |  | 916 |  |  |  | 0 |  |  |  | (89 | ) |  |  | 0 |  |  |  | 2,586 |  |  |  | (1,027 | ) |  |  | 0 |
Reinsurance recoverables*5 |  |  | 2,786 |  |  |  | (1,027 | ) |  |  | 0 |  |  |  | (1,027 | ) |  |  | 916 |  |  |  | 0 |  |  |  | (89 | ) |  |  | 0 |  |  |  | 2,586 |  |  |  | (1,027 | ) |  |  | 0 |
Policy Liabilities and Policy Account Balances |  |  | 167,207 |  |  |  | 7,292 |  |  |  | (48 | ) |  |  | 7,244 |  |  |  | 0 |  |  |  | 0 |  |  |  | (23,706 | ) |  |  | 0 |  |  |  | 136,257 |  |  |  | 7,292 |  |  |  | (48 | )
Variable annuity and variable life insurance contracts*6 |  |  | 167,207 |  |  |  | 7,292 |  |  |  | (48 | ) |  |  | 7,244 |  |  |  | 0 |  |  |  | 0 |  |  |  | (23,706 | ) |  |  | 0 |  |  |  | 136,257 |  |  |  | 7,292 |  |  |  | (48 | )
Accounts Payable: |  |  | 14,136 |  |  |  | (1,235 | ) |  |  | 112 |  |  |  | (1,123 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 15,259 |  |  |  | (1,235 | ) |  |  | 112 |
Contingent Consideration |  |  | 14,136 |  |  |  | (1,235 | ) |  |  | 112 |  |  |  | (1,123 | ) |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 0 |  |  |  | 15,259 |  |  |  | (1,235 | ) |  |  | 112 |
*1 | Principally, gains and losses from available-for-sale debt securities are included in “Gains on investment securities and dividends”, “Write-downs of securities” or “Life insurance premiums and related investment income”; equity securities are included in “Gains on investment securities and dividends” and “Life insurance premiums and related investment income” and loans held for sale, derivative assets and liabilities (net), and accounts payable are included in “Other (income) and expense” respectively. Additionally, for available-for-sale debt securities, amortization of interest recognized in finance revenues is included in these columns.
*2 | Unrealized gains and losses from loans held for sale are included in “Net change of foreign currency translation adjustments”, unrealized gains and losses from available-for-sale debt securities are included in “Net change of unrealized gains (losses) on investment in securities” and “Net change of foreign currency translation adjustments”, unrealized gains and losses from equity securities and derivative assets and liabilities (net) are included mainly in “Net change of foreign currency translation adjustments”, unrealized gains and losses from policy liabilities and policy account balances are included in “Net change of debt valuation adjustments.”, unrealized gains and losses from accounts payable are included in “Net change of foreign currency translation adjustments”.
*3 | Increases resulting from an acquisition of a subsidiary and insurance contracts ceded to reinsurance companies are included.
*4 | Decreases resulting from the receipts of reimbursements for benefits, and decreases resulting from insurance payouts to variable annuity and variable life policyholders due to death, surrender and maturity of the investment period are included.
*5 | “Included in earnings” in the above table includes changes in the fair value of reinsurance contracts recorded in “Life insurance costs” and reinsurance premiums, net of reinsurance benefits received, recorded in “Life insurance premiums and related investment income.”
*6 | “Included in earnings” in the above table is recorded in “Life insurance costs” and includes changes in the fair value of policy liabilities and policy account balances resulting from gains or losses on the underlying investment assets managed on behalf of variable annuity and variable life policyholders, and the changes in the minimum guarantee risks relating to variable annuity and variable life insurance contracts as well as insurance costs recognized for insurance and annuity payouts as a result of insured events. For the information about policy account balances for variable annuity and variable life insurance contracts and market risk benefits as of and for the fiscal year ended March 31, 2024 and 2025, see Note 24 “Long-Duration Insurance Contracts Relating to Life Insurance Operations.”
In fiscal 2023, loans held for sale totaling ¥176,055 million were transferred from Level 2 to Level 3, since the inputs became unobservable. In fiscal 2024, foreign municipal bond securities totaling ¥6,818 million were transferred from Level 2 to Level 3, since the inputs became unobservable. In fiscal 2025, there were no transfers in or out of Level 3 The following tables present recorded amounts of assets measured at fair value on a nonrecurring basis during fiscal 2024 and 2025. These assets are measured at fair value on a nonrecurring basis mainly to recognize impairment: 2024
|  | Millions of yen |
|  | Total Carrying Value in Consolidated Balance Sheets |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Loans held for sale |  | ¥ | 1,706 |  |  | ¥ | 0 |  |  | ¥ | 1,706 |  |  | ¥ | 0 |
Real estate collateral-dependent loans (net of allowance for credit losses) |  |  | 5,535 |  |  |  | 0 |  |  |  | 261 |  |  |  | 5,274 |
Investment in operating leases and property under facility operations |  |  | 1,205 |  |  |  | 0 |  |  |  | 0 |  |  |  | 1,205 |
Certain equity securities |  |  | 18,484 |  |  |  | 0 |  |  |  | 18,484 |  |  |  | 0 |
Certain equity method investments |  |  | 461 |  |  |  | 0 |  |  |  | 0 |  |  |  | 461 |
|  | ¥ | 27,391 |  |  | ¥ | 0 |  |  | ¥ | 20,451 |  |  | ¥ | 6,940 |
2025
|  | Millions of yen |
|  | Total Carrying Value in Consolidated Balance Sheets |  |  | Quoted Prices in Active Markets for Identical Assets (Level 1) |  |  | Significant Other Observable Inputs (Level 2) |  |  | Significant Unobservable Inputs (Level 3) |
Assets: |  |  |  |  |  |  |  |  |  |  |  |  |  |  |  |
Real estate collateral-dependent loans (net of allowance for credit losses) |  | ¥ | 5,881 |  |  | ¥ | 0 |  |  | ¥ | 0 |  |  | ¥ | 5,881 |
Investment in operating leases, property under facility operations and office facilities |  |  | 8,105 |  |  |  | 0 |  |  |  | 0 |  |  |  | 8,105 |
Certain equity securities |  |  | 15,193 |  |  |  | 0 |  |  |  | 15,193 |  |  |  | 0 |
Certain equity method investments |  |  | 20,619 |  |  |  | 0 |  |  |  | 0 |  |  |  | 20,619 |
|  | ¥ | 49,798 |  |  | ¥ | 0 |  |  | ¥ | 15,193 |  |  | ¥ | 34,605 |
The following is a description of the main valuation methodologies used for assets and liabilities measured at fair value. Loans held for sale Certain loans, which the Company and its subsidiaries have the intent and ability to sell to outside parties in the foreseeable future, are considered held-for-sale. The loans held for sale in the Americas are classified as Level 2, if the Company and its subsidiaries measure their fair value based on a market approach using inputs other than quoted prices that are observable for the assets such as treasury rate, swap rate and market spread. The loans held for sale in the Americas are classified as Level 3, if the Company and its subsidiaries measure their fair value based on discounted cash flow methodologies using inputs that are unobservable in the market. Real estate collateral-dependent loans The allowance for credit losses for large balance non-homogeneous loans is individually evaluated based on the present value of expected future cash flows, the loan’s observable market price or the fair value of the collateral securing the loans if the loans are collateral-dependent. According to ASC 820 (“Fair Value Measurement”), measurement for loans with deterioration in credit quality determined using a present value technique is not considered a fair value measurement. However, measurement for loans with deterioration in credit quality determined using the loan’s observable market price or the fair value of the collateral securing the collateral-dependent loans are fair value measurements and are subject to the disclosure requirements for nonrecurring fair value measurements. The Company and its subsidiaries determine the fair value of the real estate collateral of real estate collateral-dependent loans using appraisals prepared by independent third party appraisers or our own staff of qualified appraisers based on recent transactions involving sales of similar assets or other valuation techniques such as discounted cash flows methodologies using future cash flows estimated to be generated from operation of the existing assets or completion of development projects, as appropriate. The Company and its subsidiaries generally obtain a new appraisal once a fiscal year. In addition, the Company and its subsidiaries periodically monitor circumstances of the real estate collateral and then obtain a new appraisal in situations involving a significant change in economic and/or physical conditions, which may materially affect the fair value of the collateral. Real estate collateral-dependent loans whose fair values are estimated using appraisals of the underlying collateral based on these valuation techniques are classified as Level 3 because such appraisals involve unobservable inputs. These unobservable inputs contain discount rates and cap rates as well as future cash flows estimated to be generated from real estate collateral. An increase (decrease) in the discount rate or cap rate and a decrease (increase) in the estimated future cash flows would result in a decrease (increase) in the fair value of real estate collateral-dependent loans. Real estate collateral-dependent loans owned by a certain subsidiary are classified as Level 2, because fair value measurement is based on observable market prices. Investment in operating leases, property under facility operations, office facilities and other assets, and land and buildings undeveloped or under construction Investment in operating leases measured at fair value is mostly real estate. The Company and its subsidiaries determine the fair value of investment in operating leases, property under facility operations, office facilities and other assets, and land and buildings undeveloped or under construction using appraisals prepared by independent third party appraisers or the Company’s own staff of qualified appraisers, and others based on recent transactions involving sales of similar assets or other valuation techniques such as discounted cash flow methodologies using future cash flows estimated to be generated from operation of the existing assets or completion of development projects, as appropriate. The Company and its subsidiaries classified these assets as Level 3 because such appraisals involve unobservable inputs. These unobservable inputs contain discount rates as well as future cash flows estimated to be generated from the assets or projects. An increase (decrease) in the discount rate and a decrease (increase) in the estimated future cash flows would result in a decrease (increase) in the fair value of investment in operating leases and property under facility operations and land and buildings undeveloped or under construction. Movable properties owned by a certain subsidiary are classified as Level 2, because fair value measurement is based on observable inputs other than quoted prices included within Level 1, such as prices for similar assets. Trading debt securities and available-for-sale debt securities If active market prices are available, fair value measurement is based on quoted active market prices and, accordingly, these securities are classified as Level 1. If active market prices are not available, fair value measurement is based on observable inputs other than quoted prices included within Level 1, such as prices for similar assets and accordingly these securities are classified as Level 2. If market prices are not available and there are no observable inputs, then fair value is estimated by using valuation models such as discounted cash flow methodologies, appraisals, or broker quotes. Such securities are classified as Level 3, as the valuation models, appraisals, or broker quotes are based on inputs that are unobservable in the market. If fair value is based on broker quotes, the Company and its subsidiaries check the validity of received prices based on comparison to prices of other similar assets and market data such as relevant benchmark indices. The Company and its subsidiaries classified CMBS and RMBS in the Americas and other asset-backed securities and debt securities as Level 2 if the inputs such as trading price and/or bid price are observable. The Company and its subsidiaries classified CMBS and RMBS in the Americas and other asset-backed securities and debt securities as Level 3 if the Company and subsidiaries evaluate the fair value based on the unobservable inputs. In determining whether the inputs are observable or unobservable, the Company and its subsidiaries evaluate various factors such as the lack of recent transactions, price quotations that are not based on current information or vary substantially over time or among market makers, a significant increase in implied risk premium, a wide bid-ask spread, significant decline in new issuances, little or no public information (e.g. a principal-to-principal market) and other factors. With respect to certain CMBS and RMBS in the Americas and other asset-backed securities and debt securities, the Company and its subsidiaries classified these securities that were measured at fair value based on the observable inputs such as trading price and/or bit price as Level 2. But for those securities that lacked observable trades because they are older vintage or below investment grade securities, the Company and its subsidiaries limit the reliance on independent pricing service vendors and brokers. As a result, the Company and its subsidiaries established internally developed pricing models using valuation techniques such as discounted cash flow model using Level 3 inputs in order to estimate fair value of these debt securities and classified them as Level 3. Under the models, the Company and its subsidiaries use anticipated cash flows of the security discounted at a risk-adjusted discount rate that incorporates our estimate of credit risk and liquidity risk that a market participant would consider. The cash flows are estimated based on a number of assumptions such as default rate and prepayment speed, as well as seniority of the security. An increase (decrease) in the discount rate or default rate would result in a decrease (increase) in the fair value of CMBS and RMBS in the Americas and other asset-backed securities and debt securities. Equity securities and equity method investments If active market prices are available, fair value measurement is based on quoted active market prices and, accordingly, these securities are classified as Level 1. If active market prices are not available, fair value measurement is based on observable inputs other than quoted prices included within Level 1, such as prices for similar assets and accordingly these securities are classified as Level 2. In addition, a certain Americas subsidiary measures its investments held by investment companies which are owned by the subsidiary at fair value. These investment funds, certain equity securities and certain equity method investments are classified as Level 3, because fair value measurement is based on the combination of discounted cash flow methodologies and market multiple valuation methods, appraisals, or broker quotes. Discounted cash flow methodologies use future cash flows to be generated from investees, weighted average cost of capital (WACC) and others. Market multiple valuation methods use earnings before interest, taxes, depreciation and amortization (EBITDA) multiples based on actual and projected cash flows, comparable peer companies, and comparable precedent transactions and others. Furthermore, certain subsidiaries elected the fair value option for investments in some funds. These investment funds for which the fair value option is elected are classified as level 3, because the subsidiaries measure their fair value using discounted cash flow methodologies, discounting to net asset value based on inputs that are unobservable in the market, appraisals, or broker quotes. Derivatives For exchange-traded derivatives, fair value is based on quoted market prices, and accordingly, classified as Level 1. For non-exchange traded derivatives, fair value is based on commonly used models and discounted cash flow methodologies. If the inputs used for these measurements including yield curves and volatilities, are observable, the Company and its subsidiaries classify it as Level 2. If the inputs are not observable, the Company and its subsidiaries classify it as Level 3. These unobservable inputs contain discount rates. An increase (decrease) in the discount rate would result in a decrease (increase) in the fair value of derivatives. Reinsurance recoverables Certain subsidiaries have elected the fair value option for certain reinsurance contracts related to variable annuity and variable life insurance contracts to partially offset the changes in fair value recognized in earnings of the policy liabilities and policy account balances attributable to the changes in the minimum guarantee risks of the variable annuity and variable life insurance contracts. These reinsurance contracts for which the fair value option is elected are classified as Level 3 because the subsidiaries measure their fair value using discounted cash flow methodologies based on inputs that are unobservable in the market. Variable annuity and variable life insurance contracts A certain subsidiary has elected the fair value option for the entire variable annuity and variable life insurance contracts held in order to match earnings recognized for changes in fair value of policy liabilities and policy account balances with the earnings recognized for gains or losses from the investment assets managed on behalf of variable annuity and variable life policyholders, derivative contracts and changes in fair value of reinsurance contracts. The changes in fair value of the variable annuity and variable life insurance contracts are linked to the fair value of the investment in securities managed on behalf of variable annuity and variable life policyholders. These securities consist mainly of equity securities traded in the market. In addition, variable annuity and variable life insurance contracts are exposed to the minimum guarantee risk, and the subsidiary adjusts the fair value of the underlying investments by incorporating changes in fair value of the minimum guarantee risk in the evaluation of the fair value of the entire variable annuity and variable life insurance contracts. The variable annuity and variable life insurance contracts for which the fair value option is elected are classified as Level 3 because the subsidiary measures the fair value using discounted cash flow methodologies based on inputs that are unobservable in the market. Accounts payable (Contingent consideration) A certain subsidiary records a part of consideration for acquiring noncontrolling interests of its subsidiary as accounts payable (contingent consideration), and it is classified as level 3 because fair value measurement is based on discounted cash flow methodologies. Information about Level 3 Fair Value Measurements The following tables provide information about the valuation techniques and significant unobservable inputs used in the valuation of Level 3 assets and liabilities measured at fair value on a recurring basis as of March 31, 2024 and 2025.
|  | March 31, 2024 |
|  | Millions of yen |  |  | Valuation technique(s) |  | Significant unobservable inputs |  | Range (Weighted average) |
|  | Fair value |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Loans held for sale |  | ¥ | 96,566 |  |  | Discounted cash flows |  | Discount rate |  |  | 7.7% – 13.0% |
|  |  |  |  |  |  |  |  |  |  | (10.0%) |
Available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |  |
Japanese prefectural and foreign municipal bond securities |  |  | 7,145 |  |  | Discounted cash flows |  | Discount rate |  |  | 4.9% – 10.5% (5.8%) |
|  |  | 3,777 |  |  | Appraisals/Broker quotes |  | — |  |  | — |
Corporate debt securities |  |  | 140 |  |  | Discounted cash flows |  | Discount rate |  |  | 0.4% |
|  |  |  |  |  |  |  |  |  |  | ( 0.4 %) |
|  |  | 5,446 |  |  | Appraisals/Broker quotes |  | — |  |  | — |
CMBS and RMBS in the Americas |  |  | 7,165 |  |  | Appraisals/Broker quotes |  | — |  |  | — |
Other asset-backed securities and debt securities |  |  | 28,391 |  |  | Discounted cash flows |  | Discount rate |  |  | 0.3% – 51.2% |
|  |  |  |  |  |  |  |  |  |  | ( 6.7 %) |
|  |  |  |  |  |  |  | Probability of default |  |  | 1.9% |
|  |  |  |  |  |  |  |  |  |  | (1.9%) |
|  |  | 267,233 |  |  | Appraisals/Broker quotes |  | — |  |  | — |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |
Investment funds |  |  | 131,907 |  |  | Discounted cash flows |  | WACC |  |  | 12.8% – 26.4% |
|  |  |  |  |  |  |  |  |  |  | ( 17.2 %) |
|  |  |  |  |  |  |  | EV/Terminal EBITDA multiple |  |  | 7.5x-12.0x |
|  |  |  |  |  |  |  |  |  |  | ( 9.5 x) |
|  |  |  |  |  | Market multiples |  | EV/Last twelve months EBITDA multiple |  |  | 8.1x-9.5x |
|  |  |  |  |  |  |  |  |  |  | ( 8.8 x) |
|  |  |  |  |  |  |  | EV/Forward EBITDA multiple |  |  | 6.8x-9.6x |
|  |  |  |  |  |  |  |  |  |  | ( 8.2 x) |
|  |  |  |  |  |  |  | EV/Precedent transaction last twelve months EBITDA multiple |  |  | 8.0x-13.0x |
|  |  |  |  |  |  |  |  |  |  | ( 9.9 x) |
|  |  | 24,668 |  |  | Appraisals/Broker quotes |  | — |  |  | — |
|  |  | 6,282 |  |  | Discounted cash flows |  | Discount rate |  |  | 8.0% – 12.0% |
|  |  |  |  |  |  |  |  |  |  | ( 10.3 %) |
Derivative assets: |  |  |  |  |  |  |  |  |  |  |  |
Options held/written and other |  |  | 6,501 |  |  | Discounted cash flows |  | Discount rate |  |  | 12.0% – 33.0% |
|  |  |  |  |  |  |  |  |  |  | ( 14.6 %) |
Other assets: |  |  |  |  |  |  |  |  |  |  |  |
Reinsurance recoverables |  |  | 2,786 |  |  | Discounted cash flows |  | Discount rate |  |  | (0.1)% – 1.6% |
|  |  |  |  |  |  |  |  |  |  | (0.5%) |
|  |  |  |  |  |  |  | Mortality rate |  |  | 0.0% – 100.0% |
|  |  |  |  |  |  |  |  |  |  | (2.9%) |
|  |  |  |  |  |  |  | Lapse rate |  |  | 1.5% – 14.0% |
|  |  |  |  |  |  |  |  |  |  | (4.8%) |
|  |  |  |  |  |  |  | Annuitization rate (guaranteed minimum annuity benefit) |  |  | 100.0% |
|  |  |  |  |  |  |  |  |  |  | (100.0%) |
Total |  | ¥ | 588,007 |  |  |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Options held/written and other |  | ¥ | 4,198 |  |  | Discounted cash flows |  | Discount rate |  |  | 12.0% – 33.0% |
|  |  |  |  |  |  |  |  |  |  | ( 14.6 %) |
|  |  | 19 |  |  | Appraisals/Broker quotes |  | — |  |  | — |
Policy liabilities and Policy Account Balances: |  |  |  |  |  |  |  |  |  |  |  |
Variable annuity and variable life insurance contracts |  |  | 167,207 |  |  | Discounted cash flows |  | Discount rate |  |  | (0.1)% – 1.6% |
|  |  |  |  |  |  |  |  |  |  | (0.5%) |
|  |  |  |  |  |  |  | Mortality rate |  |  | 0.0% – 100.0% |
|  |  |  |  |  |  |  |  |  |  | (2.1%) |
|  |  |  |  |  |  |  | Lapse rate |  |  | 1.5% – 30.0% |
|  |  |  |  |  |  |  |  |  |  | (5.9%) |
|  |  |  |  |  |  |  | Annuitization rate (guaranteed minimum annuity benefit) |  |  | 0.0% – 100.0% |
|  |  |  |  |  |  |  |  |  |  | ( 66.7 %) |
Accounts Payable: |  |  |  |  |  |  |  |  |  |  |  |
Contingent Consideration |  |  | 14,136 |  |  | Discounted cash flows |  | EV/Terminal EBITDA multiple |  |  | 15.0x |
|  |  |  |  |  |  |  |  |  |  | ( 15.0 x) |
Total |  | ¥ | 185,560 |  |  |  |  |  |  |  |  |
|  | March 31, 2025 |
|  | Millions of yen |  |  | Valuation technique(s) |  | Significant unobservable inputs |  | Range (Weighted average) |
|  | Fair value |
Assets: |  |  |  |  |  |  |  |  |  |  |  |
Loans held for sale |  | ¥ | 67,794 |  |  | Discounted cash flows |  | Discount rate |  |  | 7.0% – 12.1% |
|  |  |  |  |  |  |  |  |  |  | (9.4%) |
Available-for-sale debt securities: |  |  |  |  |  |  |  |  |  |  |  |
Japanese prefectural and foreign municipal bond securities |  |  | 6,319 |  |  | Discounted cash flows |  | Discount rate |  |  | 5.8% – 9.8% |
|  |  |  |  |  |  |  |  |  |  | (8.0%) |
|  |  | 4,559 |  |  | Appraisals/Broker quotes |  | — |  |  | — |
Corporate debt securities |  |  | 302 |  |  | Discounted cash flows |  | Discount rate |  |  | 1.5% |
|  |  |  |  |  |  |  |  |  |  | ( 1.5 % ) |
|  |  | 3,950 |  |  | Appraisals/Broker quotes |  | — |  |  | — |
CMBS and RMBS in the Americas |  |  | 7,082 |  |  | Appraisals/Broker quotes |  | — |  |  | — |
Other asset-backed securities and debt securities |  |  | 34,670 |  |  | Discounted cash flows |  | Discount rate |  |  | 0.4% – 51.2% |
|  |  |  |  |  |  |  |  |  |  | ( 5.5 %) |
|  |  |  |  |  |  |  | Probability of default |  |  | 0.2% |
|  |  |  |  |  |  |  |  |  |  | (0.2%) |
|  |  | 160,772 |  |  | Appraisals/Broker quotes |  | — |  |  | — |
Equity securities: |  |  |  |  |  |  |  |  |  |  |  |
Investment funds and other |  |  | 133,585 |  |  | Discounted cash flows |  | WACC |  |  | 13.3% – 23.7% |
|  |  |  |  |  |  |  |  |  |  | ( 16.8 %) |
|  |  |  |  |  |  |  | EV/Terminal EBITDA multiple |  |  | 4.2x-12x |
|  |  |  |  |  |  |  |  |  |  | ( 8.8 x) |
|  |  |  |  |  | Market multiples |  | EV/Last twelve months EBITDA multiple |  |  | 4.3x-9.5x |
|  |  |  |  |  |  |  |  |  |  | ( 7.8 x) |
|  |  |  |  |  |  |  | EV/Forward EBITDA multiple |  |  | 4.2x-9x |
|  |  |  |  |  |  |  |  |  |  | ( 7.7 x) |
|  |  |  |  |  |  |  | EV/Precedent transaction last twelve months EBITDA multiple |  |  | 4.3x-11.9x |
|  |  |  |  |  |  |  |  |  |  | ( 8.7 x) |
|  |  | 22,859 |  |  | Appraisals/Broker quotes |  | — |  |  | — |
|  |  | 5,766 |  |  | Discounted cash flows |  | Discount rate |  |  | 11.5% – 12.0% |
|  |  |  |  |  |  |  |  |  |  | ( 11.7 %) |
Derivative assets: |  |  |  |  |  |  |  |  |  |  |  |
Options held/written and other |  |  | 8,297 |  |  | Discounted cash flows |  | Discount rate |  |  | 12.0% – 33.0% |
|  |  |  |  |  |  |  |  |  |  | ( 14.7 %) |
|  |  | 520 |  |  | Appraisals/Broker quotes |  | — |  |  | — |
Other assets: |  |  |  |  |  |  |  |  |  |  |  |
Reinsurance recoverables |  |  | 2,586 |  |  | Discounted cash flows |  | Discount rate |  |  | 0.5% – 2.4% |
|  |  |  |  |  |  |  |  |  |  | (1.3%) |
|  |  |  |  |  |  |  | Mortality rate |  |  | 0.0% – 100.0% |
|  |  |  |  |  |  |  |  |  |  | (2.9%) |
|  |  |  |  |  |  |  | Lapse rate |  |  | 1.5% – 14.0% |
|  |  |  |  |  |  |  |  |  |  | (4.7%) |
|  |  |  |  |  |  |  | Annuitization rate (guaranteed minimum annuity benefit) |  |  | 100.0% |
|  |  |  |  |  |  |  |  |  |  | (100.0%) |
Total |  | ¥ | 459,061 |  |  |  |  |  |  |  |  |
Liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Derivative liabilities: |  |  |  |  |  |  |  |  |  |  |  |
Options held/written and other |  | ¥ | 652 |  |  | Discounted cash flows |  | Discount rate |  |  | 12.0% – 33.0% |
|  |  |  |  |  |  |  |  |  |  | ( 14.7 %) |
Policy liabilities and Policy Account Balances: |  |  |  |  |  |  |  |  |  |  |  |
Variable annuity and variable life insurance contracts |  |  | 136,257 |  |  | Discounted cash flows |  | Discount rate |  |  | 0.5% – 2.4% |
|  |  |  |  |  |  |  |  |  |  | (1.3%) |
|  |  |  |  |  |  |  | Mortality rate |  |  | 0.0% – 100.0% |
|  |  |  |  |  |  |  |  |  |  | (2.3%) |
|  |  |  |  |  |  |  | Lapse rate |  |  | 1.5% – 30.0% |
|  |  |  |  |  |  |  |  |  |  | (5.7%) |
|  |  |  |  |  |  |  | Annuitization rate (guaranteed minimum annuity benefit) |  |  | 0.0% – 100.0% |
|  |  |  |  |  |  |  |  |  |  | ( 67.1 %) |
Accounts Payable: |  |  |  |  |  |  |  |  |  |  |  |
Contingent Consideration |  |  | 15,259 |  |  | Discounted cash flows |  | EV/Terminal EBITDA multiple |  |  | 15.0x |
|  |  |  |  |  |  |  |  |  |  | ( 15.0x) |
Total |  | ¥ | 152,168 |  |  |  |  |  |  |  |  |
The following tables provide information about the valuation techniques and significant unobservable inputs used in the valuation of Level 3 assets measured at fair value on a nonrecurring basis during fiscal 2024 and 2025.
|  | 2024
|  | Millions of yen |  |  | Valuation technique(s) |  | Significant unobservable inputs |  | Range (Weighted average)
|  | Fair value |
Assets: |  |  |  |  |  |  |  |  |  |
Real estate collateral-dependent loans (net of allowance for credit losses) |  | ¥ | 892 |  |  | Direct capitalization |  | Capitalization rate |  | 4.6% – 6.3%
|  |  |  |  |  |  |  |  |  | ( 5.3 %)
|  |  | 4,382 |  |  | Appraisals/Broker quotes |  | — |  | —
Investment in operating leases and property under facility operations |  |  | 337 |  |  | Discounted cash flows |  | Discount rate |  | 0.0% – 13.0%
|  |  |  |  |  |  |  |  |  | ( 3.6 % )
|  |  | 868 |  |  | Appraisals/Broker quotes |  | — |  | —
Certain equity method investments |  |  | 461 |  |  | Market multiples |  | EV/EBITDA multiple |  | 3x-6x
|  |  |  |  |  |  |  |  |  | ( 4.5x)
|  | ¥ | 6,940 |  |  |  |  |  |  |
|  | 2025
|  | Millions of yen |  |  | Valuation technique(s) |  | Significant unobservable inputs |  | Range (Weighted average)
|  | Fair value |
Assets: |  |  |  |  |  |  |  |  |  |
Real estate collateral-dependent loans (net of allowance for credit losses) |  | ¥ | 1,064 |  |  | Direct capitalization |  | Capitalization rate |  | 4.4% – 5.2%
|  |  |  |  |  |  |  |  |  | ( 4.7 %)
|  |  | 4,817 |  |  | Appraisals/Broker quotes |  | — |  | —
Investment in operating leases, property under facility operations and office facilities |  |  | 3,314 |  |  | Discounted cash flows |  | Discount rate |  | 6.1%
|  |  |  |  |  |  |  |  |  | ( 6.1% )
|  |  | 4,791 |  |  | Appraisals/Broker quotes |  | — |  | —
Certain equity method investments |  |  | 20,619 |  |  | Appraisals/Broker quotes |  | — |  | —
|  | ¥ | 34,605 |  |  |  |  |  |  |
The Company and its subsidiaries generally use discounted cash flow methodologies or similar internally developed models to determine the fair value of Level 3 assets and liabilities. Use of these techniques requires determination of relevant inputs and assumptions, some of which represent significant unobservable inputs as indicated in the preceding table. Accordingly, changes in these unobservable inputs may have a significant impact on the fair value. Certain of these unobservable inputs will have a directionally consistent impact on the fair value of the asset or liability for a given change in that input. Alternatively, the fair value of the asset or liability may move in an opposite direction for a given change in another input. Where multiple inputs are used within the valuation technique of an asset or liability, a change in one input in a certain direction may be offset by an opposite change in another input having a potentially muted impact to the overall fair value of that particular asset or liability. Additionally, a change in one unobservable input may result in a change to another unobservable input (that is, changes in certain inputs are interrelated to one another), which may counteract or magnify the fair value impact. Unobservable inputs are weighted by the relative fair value of the asset or liability. For more analysis of the uncertainty of each input, see the description of the main valuation methodologies used for assets and liabilities measured at fair value.

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- Definition The entire disclosure of the fair value measurement of assets and liabilities, which includes financial instruments measured at fair value that are classified in shareholders' equity, which may be measured on a recurring or nonrecurring basis. + References Reference 1: http://fasb.org/us-gaap/role/ref/legacyRef -Topic 820 -Name Accounting Standards Codification -Publisher FASB -URI https://asc.fasb.org/820/tableOfContent + Details
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