Difficulty recovering additional production costs outside the contract scope
First written in FY2021-Q1. 3 of 5 entries say "Worsened", first in FY2021-Q2. Latest entry: FY2025-H1.
Silicon Studio Corp. moved to the "Worse" side of this theme in 2021, 2 years before the typical company in this theme (2023).
57 other companies' latest entry also says "Mitigated".
- FY2025-H1MitigatedAnnual report
「Following the settlement of a dispute concerning in-game asset production for smartphone game software undertaken by the Company's former consolidated subsidiary イグニス・イメージワークス株式会社, which was absorbed by the Company effective 1 December 2024, the Company recognized the settlement proceeds as extraordinary income.」
A settlement was reached in a project previously disclosed in connection with the collection of additional production costs outside the scope of the contract, and the settlement payment of ¥25 million was recorded as extraordinary income. - FY2021WorsenedAnnual report
「After the counterparty notified the Company of contract termination, the Company recognized a ¥75 million provision for losses on orders during the second quarter of the consolidated fiscal year, taking into account recoverability and other factors. As a result, the entire ¥166 million manufacturing cost related to phase 2 of this project has been provided for.」
In a project related to the collection of additional production costs outside the scope of the contract, the Company received notice of contract termination after delivery and provided for the entire ¥166 million in manufacturing costs for Phase 2. - FY2021-Q3WorsenedAnnual report
「After the counterparty notified the Company of contract termination, the Company recognized a ¥75 million provision for losses on orders during the second quarter of the consolidated fiscal year, taking into account recoverability and other factors. As a result, the entire ¥166 million manufacturing cost related to phase 2 of this project has been provided for.」
In a project related to the collection of additional production costs outside the scope of the contract, the Company received notice of contract termination after delivery and made an additional provision of ¥75 million. The entire ¥166 million in manufacturing costs for Phase 2 had been provided for. - FY2021-Q2WorsenedAnnual report
「As the counterparty subsequently notified us of the termination of the contract, we recognized an additional ¥75 million in provision expense for contract losses during the second-quarter accounting period, taking into account the recoverability of the amount.」
In a project related to the collection of additional production costs outside the scope of the contract, the Company received notice of contract termination after delivery and made an additional provision of ¥75 million. - FY2021-Q1MaterialisedAnnual report
「In the second phase of a game asset development project undertaken by our subsidiary as a subcontractor, we understand that, during the course of the project, the counterparty ordered the production of deliverables outside the scope of the contract. Although we have sought payment of the additional costs for this additional work, the counterparty has shown no indication of entering into negotiations. Taking into account the recoverability of the amount, we recognized ¥91 million in provision expense for contract losses.」
Although the Company has billed for additional production recognized as outside the scope of the contract, negotiations with the counterparty have not progressed. Taking into account the likelihood of collection, the Company recorded ¥91 million as a provision for loss on orders received.