Impairment of Goodwill and Other Assets Due to Unrecognized Liabilities and Failure to Meet Business Plans Following M&A
First written in FY2019. 2 of 4 entries say "Materialised", first in FY2024. Latest entry: FY2026.
iRidge moved to the "Worse" side of this theme in 2021, 3 years before the typical company in this theme (2024).
The whole theme swung hardest in 2024: 37 of 91 companies on the "Worse" side.
45 other companies' latest entry also says "Materialised".
- FY2026MaterialisedAnnual report
「In the current consolidated fiscal year, because revenue opportunities are being realized in a manner different from the assumptions initially made when the company became a subsidiary, we recognized the entire carrying amount of the buildings and structures and other tangible fixed assets, namely tools, fixtures and equipment, related to the company and acquired in connection with the head office relocation as an impairment loss.」
The difference between the business plan and expected revenue opportunities after the M&A transaction has materialized as an impairment loss of ¥4.013 million on fixed assets related to the plugin business. - FY2024MaterialisedAnnual report
「The entire carrying amount of goodwill related to Qoil Co., Ltd., a consolidated subsidiary, has been recognized as an impairment loss.」
The risk of goodwill impairment associated with M&A and consolidation has materialized as an impairment loss of ¥313.068 million on goodwill related to Qoil. - FY2021WorsenedAnnual report
「As a result of the impact, we identified indicators of impairment for goodwill related to Qoil Co., Ltd. After comparing the total undiscounted future cash flows with the carrying amount, we determined that no impairment loss should be recognized because the undiscounted future cash flows exceeded the carrying amount.」
Indicators of impairment were identified for goodwill related to Qoil due to the impact of COVID-19. Although no impairment was recognized this time, dependence on the business plan and future cash flows has become apparent. - FY2019First statedAnnual report
「If issues that could not be identified through prior investigation arise, such as the occurrence of contingent liabilities or the discovery of unrecognized liabilities at an acquired company, or if a business plan fails to progress as scheduled, the Group may need to recognize impairment losses on shares or goodwill, which could affect the Group's business and performance.」
While using M&A as a means of accelerating growth, the company has disclosed for the first time, as an independent risk, the risk of impairment of shares and goodwill due to liabilities not identified before an acquisition or failure to achieve business plans.