Deterioration in Project Profitability Due to Changes in Acceptance Timing and Specifications
First written in FY2016. 7 of 16 entries say "Materialised", first in FY2018-Q3. Latest entry: FY2025-H1.
iRidge moved to the "Worse" side of this theme in 2017, 5 years before the typical company in this theme (2022).
The whole theme swung hardest in 2017: 9 of 31 companies on the "Worse" side.
15 other companies' latest entry also says "Mitigated".
- FY2025-H1MitigatedAnnual report
「On the cost side, the higher costs associated with delays in some smartphone app development projects during the same period of the previous year were eliminated.」
The higher costs caused by delays in some app development projects during the previous interim consolidated accounting period were eliminated during the current interim consolidated accounting period. - FY2024MaterialisedAnnual report
「Higher costs occurred as a result of delays in the progress of some app development projects.」
Delays in development projects and higher costs have appeared in full-year results, contributing to the OMO business segment loss and lower gross margins. - FY2024-Q2RestatedAnnual report
「On the cost side, in addition to higher costs caused by delays in the progress of some development projects, costs also increased following the launch of APPBOX, the company's new app business platform.」
Delays in some development projects and the resulting higher costs were again disclosed, following the previous quarter, indicating that the impact on project execution is continuing. - FY2024-Q1MaterialisedAnnual report
「On the cost side, in addition to higher costs caused by delays in the progress of some development projects, costs also increased following the launch of APPBOX, the company's new app business platform.」
Delays in development projects have actually occurred and have appeared in the financial results as higher costs. Costs related to the launch of the new product have also been added. - FY2023-Q3MaterialisedAnnual report
「In online marketing, including digital marketing, the strengthening of the development structure did not progress as far as initially expected, resulting in delays in winning new development projects and in development progress.」
The development structure was not strengthened as expected, and delays in winning new development projects and in development progress have actually occurred. - FY2022WorsenedAnnual report
「Revenue from development activities is recognized using the method described in Note (4), “Significant Revenue and Expense Recognition Policies,” under “Notes to Consolidated Financial Statements (Significant Accounting Policies for Preparing Consolidated Financial Statements).” The input method using estimated total costs is applied.」
In addition to the existing risks of shifts in acceptance timing and additional work hours due to specification changes, project profitability risks have become more specific, including divergences between estimated total costs and actual results and changes in estimates of the stage of completion used for revenue recognition. - FY2021WorsenedAnnual report
「The group manages projects with attention to their profitability and other factors. However, even projects initially judged likely to achieve appropriate profitability may incur costs exceeding expectations due to project management issues, increases in work hours resulting from specification changes, and other factors. This may require an impairment of work in process and the recognition of provisions. In addition, changes in acceptance timing may shift the timing of revenue recognition, and these and other factors may affect the group's business and financial results.」
In addition to the existing risks related to acceptance timing and specification changes, the company has identified project management issues, higher-than-expected costs, impairment of work in process, and the recognition of provisions as risk factors. - FY2020MaterialisedAnnual report
「Revenue increased 26% year on year.」
Some projects were pushed into the following fiscal year or later due to event cancellations and other measures to prevent the spread of COVID-19. Year-end promotional campaigns were also cancelled, resulting in actual fluctuations in project acceptance and revenue recognition timing. - FY2020-Q3MaterialisedAnnual report
「Although some large projects slipped into the fourth quarter during the third-quarter consolidated accounting period, progress was broadly in line with plan.」
Some large projects slipped into the fourth quarter, and the timing of revenue recognition has in fact fluctuated according to project release timing. - FY2020-Q1WorsenedAnnual report
「Due to the increase in large projects, work in process at the end of the first quarter had accumulated to approximately 3 times the year-earlier level on a non-consolidated basis, and the projects are scheduled for release sequentially from the second quarter onward.」
As the number of large projects has increased, work in process has accumulated to approximately 3 times the year-earlier level, increasing the potential for fluctuations in revenue recognition depending on project release timing. - FY2019WorsenedAnnual report
「The group manages projects with attention to their profitability and other factors. However, given the nature of the business, additional work hours may be required due to specification changes and other factors, resulting in costs exceeding expectations. This may require an impairment of work in process and the recognition of provisions. In addition, changes in acceptance timing may shift the timing of revenue recognition, and these and other factors may affect the group's business and financial results.」
In addition to the existing risks related to acceptance timing and specification changes, project profitability risks have become more specific, including higher-than-expected costs, impairment of work in process, and the potential recognition of provisions. - FY2018MaterialisedAnnual report
「At the same time, as the company expands its smartphone and marketing initiatives, projects are tending to become larger and longer in duration. This has also created uncertainties, including an increase in projects extending across fiscal years, reductions in scope during development, and reviews of project start dates.」
Projects extending across fiscal years, reductions in scope during development, and reviews of project start dates have actually occurred as projects have become larger and longer in duration, contributing to lower revenue from app development and consulting. - FY2018-Q4WorsenedAnnual report
「At the same time, as the company expands its smartphone and marketing initiatives, projects are tending to become larger and longer in duration. This has also created uncertainties, including an increase in projects extending across fiscal years, reductions in scope during development, and reviews of project start dates.」
Projects are becoming larger and longer in duration, and new uncertainties have emerged, including projects extending across fiscal years, reductions in scope during development, and reviews of project start dates. - FY2018-Q3MaterialisedAnnual report
「As the O2O market expands, the projects we receive are becoming larger and longer in duration, and quarterly revenue fluctuates depending on the release timing of large projects.」
The effect of release timing for larger, longer-duration projects on quarterly revenue has materialized in the current quarter as unreleased large projects and a decline in revenue. - FY2017WorsenedAnnual report
「As the O2O market expands, the projects we receive are becoming larger and development periods are tending to lengthen. We therefore manage projects more rigorously, but if development does not proceed as originally planned, our business and financial results may be affected.」
The larger scale and longer development periods of projects have made specific the exposure to deteriorating project profitability due to shifts in acceptance timing and specification changes. - FY2016First statedAnnual report
「For app development and related activities, including O2O consulting involving development processes, changes in acceptance timing may shift the timing of revenue recognition. In addition, changes in specifications and other factors may require additional work hours and worsen project profitability, potentially affecting our business and financial results.」
The company discloses risks related to app development and O2O consulting, including shifts in acceptance timing, additional work hours due to specification changes, and deterioration in project profitability.