Adoption of the Accounting Standards for Revenue Recognition and Fair Value Measurement

「As a result, compared with the previous accounting treatment, net sales for the cumulative second quarter of the current consolidated fiscal year decreased by ¥48.252 million, cost of sales by ¥25.643 million and selling, general and administrative expenses by ¥22.729 million. Gross profit consequently decreased by ¥22.609 million, while operating loss, ordinary loss and loss before income taxes each increased by ¥120 thousand.」

「The company applied the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan Statement No. 29, 31 March 2020, hereinafter the “Revenue Recognition Standard”) and other standards from the beginning of the first quarter of the current consolidated fiscal year. Accordingly, revenue is recognized at the amount expected to be received in exchange for promised goods or services when control of those goods or services is transferred to the customer. The company also applied the Accounting Standard for Fair Value Measurement (Accounting Standards Board of Japan Statement No. 30, 4 July 2019, hereinafter the “Fair Value Measurement Standard”) and other standards from the beginning of the first quarter of the current consolidated fiscal year. In accordance with the transitional treatment prescribed in Paragraph 19 of the Fair Value Measurement Standard and Paragraph 44-2 of the Accounting Standard for Financial Instruments (Accounting Standards Board of Japan Statement No. 10, 4 July 2019), the company will apply the new accounting policies prescribed by the Fair Value Measurement Standard and other standards prospectively. There is no impact from this application.」