Failure to Achieve Expected Benefits from M&A and Business Alliances and Impairment Risk
First written in FY2022. 1 of 8 entries say "Worsened", first in FY2023. Latest entry: FY2026.
The whole theme swung hardest in 2023: 35 of 97 companies on the "Worse" side.
18 other companies' latest entry also says "Other".
- FY2026Annual amortization of goodwillAnnual report
「This was mainly due to a ¥269.542 million decrease resulting from goodwill amortization.」
Goodwill arising from the acquisition of パシフィックポーター was amortized by ¥269.542 million during the current consolidated fiscal year as well. No indicators of impairment were identified during the year. - FY2026-H1Continued goodwill amortizationAnnual report
「Funds generated from operating activities amounted to ¥271.726 million. This was mainly due to the recognition of interim net income before taxes and other adjustments of ¥153.785 million and goodwill amortization of ¥134.771 million.」
Goodwill arising from the acquisition was amortized by ¥134.771 million during the interim period as well. - FY2025-H1Continued goodwill amortizationAnnual report
「Funds generated from operating activities amounted to ¥217.034 million. This was mainly due to the recognition of interim net income before taxes and other adjustments of ¥125.489 million and goodwill amortization of ¥134.771 million.」
Goodwill arising from the acquisition of パシフィックポーター was amortized by ¥134.771 million during the interim period as well. - FY2024Earnings pressure from goodwill amortizationAnnual report
「Selling, general and administrative expenses increased by ¥590.199 million from the previous consolidated fiscal year to ¥1,302.013 million, up 82.9% year on year. This was mainly due to the inclusion of the results of パシフィックポーター株式会社, which became a subsidiary at the end of the previous consolidated fiscal year, and the commencement of goodwill amortization in the current consolidated fiscal year.」
Following the acquisition, goodwill amortization was incurred for the full year and emerged as a factor behind the increase in selling, general and administrative expenses and the decline in operating income. - FY2024-Q3Amortization of goodwill in progressAnnual report
「Upon finalization of this provisional accounting treatment, the comparative information included in the quarterly consolidated financial statements for the nine-month period under review reflected a material revision to the initial allocation of the purchase price. As a result, ¥164.000 million was allocated to other intangible assets (customer-related assets) and ¥55.071 million to deferred tax liabilities under non-current liabilities, reducing the provisionally calculated goodwill from ¥2,804.355 million by ¥108.928 million to ¥2,695.427 million. There was no impact on retained earnings at the end of the previous consolidated fiscal year. The amortization period for goodwill is 10 years, and the amortization period for the customer-related assets recognized under intangible assets other than goodwill is 12 years.」
The company restates the finalized purchase price allocation for the acquisition of パシフィックポーター株式会社, indicating an amortization period of 10 years for goodwill of ¥2,695.427 million and 12 years for the customer-related assets. - FY2024-Q2Purchase price allocation finalizedAnnual report
「Upon finalization of this provisional accounting treatment, the comparative information included in the quarterly consolidated financial statements for the six-month period under review reflected a material revision to the initial allocation of the purchase price. As a result, ¥164.000 million was allocated to other intangible assets (customer-related assets) and ¥55.071 million to deferred tax liabilities under non-current liabilities, reducing the provisionally calculated goodwill from ¥2,804.355 million by ¥108.928 million to ¥2,695.427 million.」
The provisional purchase price allocation for the acquisition of パシフィックポーター株式会社 was finalized, and the goodwill amount was revised from ¥2,804.355 million to ¥2,695.427 million through allocations to customer-related assets and deferred tax liabilities. - FY2023WorsenedAnnual report
「The company determines whether there are indications of impairment for recognized goodwill by monitoring the achievement of the business plan. Although there were no indications of impairment in the consolidated fiscal year under review, the key assumptions in the business plan involve uncertainty because the estimates extend over a long period. If a material divergence arises between actual results and estimates, the valuation of goodwill may be affected.」
The company recognized ¥2,804.355 million in goodwill in connection with the acquisition, disclosing specific exposure to the potential impact of failure to achieve the business plan on the goodwill valuation. It states that there were no indications of impairment. - FY2022First statedAnnual report
「However, if these M&A transactions and alliances fail to produce the expected benefits and their strategic objectives cannot be achieved, or if previously unidentified issues emerge after the investment, the company's operating results and financial position may be affected, including by the need to recognize impairment losses on the share value of the target company or the acquired business assets.」
The company identifies failure to achieve synergies from M&A and alliances, post-investment issues and the possibility of impairment losses as risks.