Application of the Revenue Recognition Accounting Standard and Other Standards; Changes in the Accounting Treatment of Points and Contract Liabilities

「In addition, for points issued to customers on online sales, we changed the treatment of points issued by other companies from recognizing the amount issued as selling, general and administrative expenses to deducting it from net sales as sales rebates.」

「Beginning with the start of the first quarter accounting period of the current fiscal year, we applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, 31 March 2020) and related standards. Revenue is recognized at the amount expected to be received in exchange for the promised goods or services when control of those goods or services transfers to the customer. As a principal change, points issued in connection with sales to customers and purchases from customers had previously been expensed as a provision for points based on the amount expected to be used in the future. Points issued in connection with sales are now identified as performance obligations, and the transaction price is allocated based on the standalone selling price calculated after taking into account expected future expiration and other factors. Points issued in connection with purchases are recognized as a provision for point-related expenses.」