Investment Recovery Risk from New Businesses and Acquisitions
First written in FY2016. 14 of 18 entries say "Materialised", first in FY2018. Latest entry: FY2026.
Digital Hearts Holdings moved to the "Worse" side of this theme in 2020, 1 year before the typical company in this theme (2021).
The whole theme swung hardest in 2020: 28 of 83 companies on the "Worse" side.
28 other companies' latest entry also says "Materialised".
- FY2026MaterialisedAnnual report
「The Group’s consolidated subsidiaries DIGITAL HEARTS CROSS Marketing and Solutions Limited and Digital HEARTS Seoul Co., Ltd. operate marketing-support businesses. However, marketing spending by major local customers, such as game developers, has been trending downward, increasing uncertainty regarding the acquisition of new projects and incentive income supporting the subsidiaries’ earnings.」
The overseas subsidiaries failed to achieve their expected performance because of worsening business conditions, resulting in an impairment loss of ¥238.030 million on goodwill and other assets. The investment-recovery risk has additionally materialized. - FY2026-H1MaterialisedAnnual report
「Loss on valuation of investment securities 299,999」
During the interim consolidated accounting period under review, a loss on valuation of investment securities of ¥299.999 million was recorded as an extraordinary loss, and the decline in investment value resulted in an additional loss. - FY2025MaterialisedAnnual report
「During the consolidated fiscal year under review, an impairment loss of ¥1,184.076 million was recognized on investment securities.」
An impairment loss of ¥1,184.076 million was recognized in the valuation of investment securities, and the risk of failure to recover investments and declines in value materialized as an additional loss. - FY2024-Q3MaterialisedAnnual report
「We recognized an impairment loss because the returns expected at the time of the acquisition could no longer be expected.」
An impairment loss of ¥1,052.889 million was recorded for LOGIGEAR, DEVELOPING WORLD SYSTEMS and MK Partners because expected earnings at the time of acquisition were not achieved. The investment-recovery risk associated with new businesses and acquisitions materialized as an additional loss. - FY2024-Q2MaterialisedAnnual report
「We recognized an impairment loss because the returns expected at the time of the acquisition could no longer be expected.」
An impairment loss totaling ¥1,030.261 million was recorded for LOGIGEAR, DEVELOPING WORLD SYSTEMS and MK Partners because expected earnings at the time of acquisition were not achieved. - FY2023MaterialisedAnnual report
「The Group recorded an impairment loss on the goodwill arising from the acquisition of shares in DIGITAL HEARTS CROSS.」
The expected earnings plan for DIGITAL HEARTS CROSS was delayed because of changes in market conditions in Asia, including China, and the aftereffects of the spread of COVID-19, resulting in an impairment loss of ¥1,045.536 million on goodwill. - FY2022RestatedAnnual report
「However, it is difficult to accurately predict the progress of these business initiatives, and if the Group becomes unable to recover the amounts invested or lent in connection with them, this could affect its business and operating results.」
The Group has reconfirmed the risk that investments and loans associated with new businesses, subsidiary establishments and M&A may be difficult to recover, along with countermeasures such as due diligence. - FY2022-Q3MaterialisedAnnual report
「We recognized an impairment loss because the returns expected at the time of the acquisition of Orgosoft Co., Ltd. could no longer be expected.」
Because the returns expected at the time of the acquisition of Orgosoft could no longer be expected, an impairment loss of ¥9.333 million was recorded on goodwill. The investment-recovery risk associated with the acquisition of a company has materialized as an additional loss. - FY2021MaterialisedAnnual report
「With respect to goodwill, we recognized an impairment loss because the returns expected at the time of the acquisition of Orgosoft Co., Ltd. could no longer be expected.」
Because the returns expected at the time of the acquisition of Orgosoft could no longer be expected, an impairment loss of ¥87.807 million was recorded on goodwill. The risk of recovering investments in new businesses and acquisitions has materialized as an actual loss. - FY2021-Q1MaterialisedAnnual report
「During the first quarter consolidated accounting period, DIGITAL HEARTS GNT VIETNAM COMPANY LIMITED was proceeding with liquidation procedures. Because its significance had declined, it was excluded from the scope of consolidation from the beginning of the first quarter consolidated accounting period.」
In connection with the risk of recovering investments in new businesses, a new Vietnamese business company entered liquidation proceedings and was excluded from the scope of consolidation. - FY2019RestatedAnnual report
「However, it is difficult to accurately predict the progress of these business initiatives, and if the Group becomes unable to recover the amounts invested or lent in connection with them, this could affect its business and operating results.」
The Group continues to disclose the risk that investments and loans associated with new businesses and subsidiary establishments may be difficult to recover. - FY2019-Q1MaterialisedAnnual report
「In connection with the withdrawal of DIGITAL HEARTS USA Inc. from the debugging business, the company recognized losses on business withdrawal. The main components were ¥32,938 thousand in rent for the former office and ¥7,183 thousand in impairment losses.」
Costs related to the withdrawal and an impairment loss actually arose in connection with the withdrawal from the business of an overseas subsidiary. - FY2018MaterialisedAnnual report
「The company recognised an impairment loss because it no longer expects to achieve the earnings assumed when DIGITAL Hearts (Shanghai) Co., Ltd. was established.」
In connection with an investment in a new overseas business, an impairment loss of ¥2.739 million actually arose because expected returns were not achieved. - FY2017RestatedAnnual report
「The Group intends to actively expand its business across a broad range of areas, centered on its user-debugging services. Accordingly, it conducts sufficient research into market conditions and considers the form of market entry, while working to mitigate business risks, and is pursuing entry into new businesses and the establishment of subsidiaries in Japan and overseas in response to market needs. However, it is difficult to accurately predict the progress of these business initiatives, and if the Group becomes unable to recover the amounts invested or lent in connection with them, this could affect its operating results and financial condition.」
The Group continues to describe its policy of pursuing new businesses and establishing subsidiaries, as well as the risk that investments and loans may be difficult to recover. - FY2016First statedAnnual report
「It is difficult to accurately predict the progress of these business initiatives, and the Group may be unable to recover the amounts invested or lent in connection with them, which could affect its operating results and financial condition.」
The Group has disclosed the risk of being unable to recover investments associated with entering new businesses, establishing subsidiaries and acquiring companies.