Valuation risk for goodwill and customer-related assets arising from M&A
First written in FY2021. 1 of 3 entries say "Worsened", first in FY2022. Latest entry: FY2023.
Osaka Yuka Industry moved to the "Worse" side of this theme in 2022.
1 other company's latest entry also says "Materialised".
- FY2023MaterialisedAnnual report
「As the excess earning power assumed at the time of acquisition could no longer be expected, the goodwill was fully amortized. In addition, because future cash flows could no longer be expected from the customer-related assets, the full carrying amount of those assets at the end of the current consolidated fiscal year was recognized as an impairment loss under extraordinary losses.」
The balances of goodwill of ¥25.774 million and customer-related assets of ¥43.428 million related to カイコー were eliminated, and impairment losses of ¥18.041 million on goodwill and ¥35.285 million on customer-related assets, totaling ¥53.327 million, were recognized. - FY2022WorsenedAnnual report
「If the profitability of the businesses underlying goodwill and customer-related assets declines as a result of future changes in the uncertain economic environment, impairment of the goodwill and customer-related assets may be required in the consolidated financial statements for the next consolidated fiscal year and beyond.」
The company expressly identifies impairment risk covering goodwill in addition to the existing customer-related assets. At 30 September 2022, the balances were ¥25.774 million in goodwill and ¥43.428 million in customer-related assets. - FY2021First statedAnnual report
「Customer-related assets of ¥51.571 million were recognized in the consolidated financial statements for the current consolidated fiscal year. Depending on future changes in the uncertain economic environment, these estimates may affect the valuation in the consolidated financial statements for the next consolidated fiscal year and beyond.」
The company valued the ¥51.571 million in customer-related assets arising from the acquisition of カイコー based on factors including revenue, the retention rate of existing customers and the discount rate, and indicated that future economic conditions could affect the valuation.