Post-Acquisition Contingent Liability and Failure to Achieve Business Development Targets Risk
First written in FY2017. 4 of 7 entries say "Materialised", first in FY2019. Latest entry: FY2026.
Chimney moved to the "Worse" side of this theme in 2019, 5 years before the typical company in this theme (2024).
The whole theme swung hardest in 2024: 36 of 89 companies on the "Worse" side.
60 other companies' latest entry also says "Restated".
- FY2026RestatedAnnual report
「The Group will promote an M&A strategy as one means of expanding its business. In conducting M&A, we believe it is necessary to conduct due diligence in advance on the target company's finances, legal matters, business operations and other areas, carefully examine the risks, and work to reduce them as far as possible. However, if problems arise after an acquisition, such as contingent liabilities that could not be identified through the prior investigation, or if the business does not develop as planned, this may affect the Group's operating results and financial position.」
Continues to describe the policy of promoting M&A, reducing risks through advance due diligence, and the risks of contingent liabilities and failure to achieve plans after acquisitions. - FY2024MaterialisedAnnual report
「In addition, following a review of the future plans for the business of 株式会社シーズライフ, which was absorbed in a merger in July 2023, the earnings initially anticipated could no longer be expected. The carrying amount was therefore reduced to the recoverable amount, and the reduction was recognized as an impairment loss. The recoverable amount was determined as the higher of value in use (discount rate: 8.4%) and fair value less costs of disposal. The impairment loss comprised 284,657 thousand yen for buildings and structures, 1,963 thousand yen for lease assets, 338,660 thousand yen for goodwill, and 45,851 thousand yen for other assets.」
Following a review of the business plan after the absorption-type merger of 株式会社シーズライフ, the earnings anticipated could no longer be expected, resulting in the recognition of an impairment loss including 338,660 thousand yen on goodwill. The risk of failing to achieve plans after acquisitions and business transfers has materialized as a loss. - FY2024-Q2MaterialisedAnnual report
「This was because, following a review of the future plans for the business of 株式会社シーズライフ, which was absorbed in a merger on 1 July, the earnings initially anticipated could no longer be expected, resulting in the recognition of an impairment loss of ¥196 million on goodwill related to that business, among other factors. This resulted in total extraordinary losses of ¥374 million.」
Following the absorption-type merger of 株式会社シーズライフ, a review of the business plan meant that the earnings initially anticipated could no longer be expected, resulting in the recognition of an impairment loss of ¥196 million on goodwill. The risk of failing to achieve plans after acquisitions and business transfers has materialized as an actual loss. - FY2021MaterialisedAnnual report
「In addition, because the earnings initially anticipated from goodwill arising from the acquisition of a business could no longer be expected, the carrying amount was reduced to the recoverable amount, and the reduction was recognized as an impairment loss under extraordinary losses. The recoverable amount was assessed as zero.」
Recognized an impairment loss of 22,764 thousand yen on goodwill arising from the acquisition of a business because the earnings initially anticipated could no longer be expected. - FY2019MaterialisedAnnual report
「Because the earnings initially anticipated from goodwill arising from the acquisition of a business could no longer be expected, the carrying amount was reduced to the recoverable amount, and the reduction was recognized as an impairment loss under extraordinary losses. The recoverable amount was assessed as zero.」
Recognized an impairment loss of 11,401 thousand yen on goodwill arising from the acquisition of a business, in connection with the risk of failing to achieve plans after M&A and business acquisitions. - FY2018RestatedAnnual report
「In conducting M&A, we believe it is necessary to conduct due diligence in advance on the target company's finances, legal matters, business operations and other areas, carefully examine the risks, and work to reduce them as far as possible. However, if problems arise after an acquisition, such as contingent liabilities that could not be identified through the prior investigation, or if the business does not develop as planned, this may affect the Group's operating results and financial position.」
Continues to address the policy of reducing risks through M&A due diligence and the risks of contingent liabilities and failure to achieve plans after acquisitions. - FY2017First statedAnnual report
「In conducting M&A, we believe it is necessary to conduct due diligence in advance on the target company's finances, legal matters, business operations and other areas, carefully examine the risks, and work to reduce them as far as possible. However, if problems arise after an acquisition, such as contingent liabilities that could not be identified through the prior investigation, or if the business does not develop as planned, this may affect the Group's operating results and financial position.」
Describes the risks of contingent liabilities and failure to achieve plans associated with M&A, as well as the policy of reducing risks through advance due diligence.