Impairment Risk for Fintech Business Software
First written in FY2021. 1 of 3 entries say "Worsened", first in FY2022. Latest entry: FY2025.
Digital Plus moved to the "Worse" side of this theme in 2022, the same year as the typical company in this theme.
4 other companies' latest entry also says "Materialised".
- FY2025MaterialisedAnnual report
「Following a decline in the profitability of the Sokubarai (salary advance) service, the recoverable amount of intangible assets in the cash-generating unit related to the Sokubarai (salary advance) service in the fintech business segment was measured, resulting in recognition of an impairment loss of ¥9.917 million.」
Regarding impairment risk for software and other assets in the fintech business, an impairment loss of ¥9.917 million was actually recognized for intangible assets related to the Sokubarai service. - FY2022WorsenedAnnual report
「The Company has determined that there is an indication of impairment for certain asset groups in the fintech business because operating income or loss generated by operating activities has remained negative. However, as the total undiscounted future cash flows expected from these asset groups exceed their carrying amounts, no impairment loss has been recognized.」
For software and other assets in the fintech business, an indication of impairment was determined to exist because operating income or loss had remained negative. No impairment loss has been recognized at this time because future cash flows exceed the carrying amounts. - FY2021First statedAnnual report
「In the fintech business, intangible assets are capitalized when future revenue generation or cost savings are deemed certain and amortized over their useful lives (5 years). However, if revenue or earnings for a new-service development project deviate materially downward from the initially prepared business plan, or if prospects from the following fiscal year onward are clearly negative, the Company determines that there is an indication of impairment. It then determines whether an impairment loss must be recognized by comparing the total undiscounted future cash flows of the assets concerned with their carrying amounts.」
For software of ¥15.815 million and software under development of ¥4.395 million in the fintech business, the risk of impairment arising from downward deviations from the business plan or deteriorating future prospects was disclosed for the first time as a separate significant accounting estimate.