Recoverability risk for deferred tax assets

「Under these circumstances, the Company has made accounting estimates, including impairment of fixed assets, based on the assumption that demand in the coffee-related and food-service-related businesses will require until the end of the fiscal year ending March 2024 to recover to pre-pandemic levels.」

「The deferred tax assets of ¥27 million represent an amount recognized for part of the balance of tax loss carryforwards at the filing company.」

「Although there are signs of improvement, including the containment of the spread of COVID-19 for the time being as vaccination rates increased and the lifting of the state of emergency in all prefectures as of 30 September 2021, the possibility of another spread in a sixth wave cannot be ruled out. Accordingly, the assumptions regarding the impact of the spread of COVID-19 remain unchanged.」

「The company makes accounting estimates regarding impairment of fixed assets and the recoverability of deferred tax assets. Although the state of emergency was expanded from 2 August 2021 to cover 6 prefectures and metropolitan areas, including 3 prefectures in the Tokyo metropolitan area and Osaka Prefecture, the assumptions regarding the impact of the spread of COVID-19 described under “Significant Accounting Estimates” in the previous fiscal year’s annual securities report remain unchanged, partly due to expectations of a recovery in demand as vaccinations expand.」

「If the estimates of future taxable income are revised, including because the profit plan serving as a key assumption is not achieved, resulting in a need to reduce deferred tax assets or increase deferred tax liabilities, this may affect the group’s operating results and financial position.」