Contingent Liabilities, Failure to Meet Plans, and Goodwill Impairment After Acquisition
First written in FY2021. 5 of 10 entries say "Materialised", first in FY2022-Q2. Latest entry: FY2026.
Appirits moved to the "Worse" side of this theme in 2023, 1 year before the typical company in this theme (2024).
The whole theme swung hardest in 2024: 36 of 89 companies on the "Worse" side.
4 other companies' latest entry also says "Other".
- FY2026Addition of contingent considerationAnnual report
「Depending on the level of performance achieved from the fiscal year ending December 2026 through the fiscal year ending December 2027, contingent consideration of up to VND 9,787 million (approximately ¥61.644 million) will be paid.」
For the acquisition of BUNBU, contingent consideration of up to ¥61.644 million based on future performance achievement has been disclosed, clarifying the exposure to post-acquisition performance and additional payments. - FY2024MaterialisedAnnual report
「In the online game business, we recognized an impairment loss of ¥20.567 million for the fiscal year under review on UNI'S ON AIR (ユニゾンエアー), whose operations were transferred in June 2022, because we determined that it would be difficult to recover the investment within the originally planned 2-year period.」
For a title whose operations were transferred, it was determined that recovering the investment within the planned 2-year period would be difficult, and an impairment loss of ¥20.567 million was actually recognized. - FY2024-Q3WorsenedAnnual report
「For titles whose operations changed, anniversary events were held in September to mark the fourth anniversary of the launch of Kemono Friends 3 and UNI'S ON AIR (Unison Air), contributing to revenue, although revenue did not grow as much as planned. Meanwhile, costs declined as the Company continued to streamline the operating structure and bring outsourced functions in-house after the change in operations.」
Although we are pursuing cost reductions through efficiency improvements and insourcing after the transfer of operations, sales have continued to fall below plan. - FY2024-Q2WorsenedAnnual report
「For UNI'S ON AIR (ユニゾンエアー), we have streamlined the operating structure and brought outsourced activities in-house since the transfer of operations, and have taken measures to reduce costs. However, in addition to higher costs for certain content, sales remained unstable, resulting in performance below the projected profit and loss plan.」
Despite taking measures to reduce costs through post-transfer efficiency improvements and insourcing, performance has continued to fall short of plan due to higher content costs and unstable sales. - FY2024-Q1MaterialisedAnnual report
「For titles whose operations changed, we implemented measures to reduce costs by streamlining the operating structure and bringing outsourced functions in-house after the change in operations, but results fell below the earnings plan.」
It states that the titles transferred after the change in operating entity have continued to fall short of plan. - FY2023MaterialisedAnnual report
「For Kemono Friends 3 and Arca Last, we recognized an impairment loss of ¥40.821 million because we determined that it would be difficult to recover the investment within the originally planned 2-year period.」
Post-acquisition risks involving failure to meet plans and impairment of goodwill and related assets after an acquisition or transfer of operations actually materialized for 2 titles. - FY2022-Q3MitigatedAnnual report
「From 1 August, the operating entity for Kemono Friends 3 was fully transferred to us, eliminating costs associated with the transfer.」
It states that, after the cost of transferring operations exceeded expectations, the full transfer of the operating entity eliminated transfer-related costs. - FY2022-Q2MaterialisedAnnual report
「Gross profit and segment profit declined due to higher costs resulting from the cost of transferring operation of the game Kemono Friends 3, previously operated by another company, exceeding expectations.」
Among the risks of unplanned costs after an acquisition or transfer of operations, the cost of transferring operations exceeded expectations in practice. - FY2022-Q2MaterialisedAnnual report
「Gross profit and segment profit declined due to higher costs resulting from the cost of transferring operation of Kemono Friends 3 exceeding expectations.」
Among the risks of unplanned costs after an acquisition or transfer of operations, the cost of transferring operations exceeded expectations in practice. - FY2021First statedAnnual report
「If problems arise after an acquisition that could not be identified through prior due diligence, such as contingent liabilities arising or previously unrecognized liabilities coming to light, if business development and other activities do not proceed as planned, or if it becomes necessary to recognize impairment losses on goodwill, this could affect our business and performance.」
Post-M&A financial and business integration risk.