Risk of goodwill impairment associated with corporate acquisitions
First written in FY2019. 6 of 11 entries say "Materialised", first in FY2020-Q2. Latest entry: FY2026.
Japan System Techniques moved to the "Worse" side of this theme in 2019, 5 years before the typical company in this theme (2024).
The whole theme swung hardest in 2023: 35 of 97 companies on the "Worse" side.
54 other companies' latest entry also says "Materialised".
- FY2026MaterialisedAnnual report
「At consolidated subsidiaries Virtual Calibre SDN. BHD., Virtual Calibre MSC SDN. BHD., Virtual Calibre Consulting SDN. BHD. and 桂林安信軟件有限公司, the carrying amounts of goodwill, customer-related assets, buildings and structures, other tangible fixed assets and software related to the asset groups for these businesses were reduced to their recoverable amounts because a recovery in profitability was no longer expected due to deterioration in the business environment and other factors, and the total reduction of ¥296.841 million was recognized as an impairment loss.」
The impairment risk associated with business acquisitions and other transactions actually materialized as a ¥296.841 million impairment loss on the asset groups of Virtual Calibre and 桂林安信. - 2026-05-14MaterialisedRevision of earnings forecasts
「At the consolidated subsidiaries Virtual Calibre SDN. BHD., Virtual Calibre MSC SDN. BHD., Virtual Calibre Consulting SDN. BHD. and 桂林安信軟件有限公司, the carrying amounts of goodwill, customer-related assets, buildings and structures, other tangible fixed assets and software related to the businesses were reduced to their recoverable amounts because a recovery in profitability was no longer expected due to the deterioration of the business environment and other factors. The total reduction of ¥296.841 million was recorded as an impairment loss.」
An impairment loss of ¥296.841 million, including goodwill, was actually recorded on assets of the Global Business, including those of Virtual Calibre. - FY2025WorsenedAnnual report
「However, such advance research may not identify and resolve every issue in each transaction. If, after an acquisition or other transaction has been completed, issues not recognized by our group become apparent, or if synergies cannot be fully realized due to changes in the operating environment or business conditions and sales or profit fall significantly below expectations, it may become necessary to recognize impairment losses on goodwill and other intangible assets in the consolidated financial statements or write down shares of affiliated companies in the financial statements, potentially affecting the performance of our group and the company.」
For acquisition risks, the company specified the scope of potential impact, extending beyond unrecognized issues and unrealized synergies to impairment of goodwill and intangible assets and write-downs of shares of affiliated companies. - FY2022MaterialisedAnnual report
「At consolidated subsidiary AG NET PTE. LTD., the carrying amounts of goodwill, customer-related assets, trademark rights and technology-related assets were reduced to their recoverable amounts because the earnings anticipated at the time of the share acquisition were no longer expected, and the total reduction of ¥87.398 million was recognized as an impairment loss. This comprised goodwill of ¥55.939 million, customer-related assets of ¥11.129 million, trademark rights of ¥7.325 million and technology-related assets of ¥13.004 million.」
For AG NET, an additional impairment loss of ¥87.398 million resulting from the earnings anticipated at the time of acquisition no longer being expected was recognized for the full year. - FY2021AG NET full-year impairment loss finalizedAnnual report
「At consolidated subsidiary AG NET PTE. LTD., the carrying amounts of goodwill, customer-related assets, trademark rights and technology-related assets were reduced to their recoverable amounts because the earnings anticipated at the time of the share acquisition were no longer expected, and the total reduction of ¥315.925 million was recognized as an impairment loss.」
For AG NET, the full-year impairment loss resulting from the earnings anticipated at the time of acquisition no longer being expected amounted to ¥315.925 million, and the breakdown was finalized. - FY2021-Q3Update to AG NET impairment loss amountAnnual report
「At consolidated subsidiary AG NET PTE. LTD., the carrying amounts of goodwill, customer-related assets, trademark rights and technology-related assets were reduced to their recoverable amounts because the earnings anticipated at the time of the share acquisition were no longer expected, and the total reduction of ¥313.252 million was recognized as an impairment loss. This comprised goodwill of ¥196.841 million, customer-related assets of ¥44.872 million, trademark rights of ¥25.777 million and technology-related assets of ¥45.761 million.」
For AG NET, the cumulative impairment loss resulting from the earnings anticipated at the time of acquisition no longer being expected was stated as ¥313.252 million, and the breakdown was updated. - FY2021-Q2MaterialisedAnnual report
「At consolidated subsidiary AG NET PTE. LTD., the carrying amounts of goodwill, customer-related assets, trademark rights and technology-related assets were reduced to their recoverable amounts because the earnings anticipated at the time of the share acquisition were no longer expected, and the total reduction of ¥313.171 million was recognized as an impairment loss. This comprised goodwill of ¥196.790 million, customer-related assets of ¥44.861 million, trademark rights of ¥25.770 million and technology-related assets of ¥45.749 million.」
For AG NET, the earnings anticipated at the time of acquisition were no longer expected, and an impairment loss totaling ¥313.171 million was recognized on goodwill and other assets. The impairment risk associated with goodwill and other assets arising from business acquisitions has also materialized in another acquisition. - FY2020MaterialisedAnnual report
「If issues not recognized by our group become apparent after a business acquisition or other transaction, or if the expected results are not achieved due to changes in the operating environment or business conditions, it may become necessary to recognize impairment losses on goodwill, potentially affecting our group's performance.」
For the Virtual Calibre companies, the earnings anticipated at the time of acquisition were no longer expected, and an impairment loss of ¥738.103 million on goodwill and customer-related assets was actually recognized. - FY2020-Q3RestatedAnnual report
「At the consolidated subsidiaries Virtual Calibre SDN. BHD., Virtual Calibre MSC SDN. BHD. and Virtual Calibre Consulting SDN. BHD., expected earnings at the time of the share acquisition could no longer be anticipated. Accordingly, the carrying amounts of goodwill and customer-related assets were reduced to their recoverable amounts, and the total reduction of ¥715.904 million was recognized as an impairment loss. This comprised ¥395.830 million in goodwill and ¥320.074 million in customer-related assets.」
The continued recognition of impairment losses resulting from the earnings anticipated at the time of acquisition no longer being expected was confirmed. The impairment loss totaled ¥715.904 million, comprising ¥395.830 million in goodwill and ¥320.074 million in customer-related assets. - FY2020-Q2MaterialisedAnnual report
「At consolidated subsidiaries Virtual Calibre SDN. BHD., Virtual Calibre MSC SDN. BHD. and Virtual Calibre Consulting SDN. BHD., the carrying amounts of goodwill and customer-related assets were reduced to their recoverable amounts because the earnings anticipated at the time of the share acquisition were no longer expected, and the total reduction of ¥722.286 million was recognized as an impairment loss.」
For the Virtual Calibre companies, the earnings anticipated at the time of the share acquisition were no longer expected, and impairment losses totaling ¥722.286 million were actually recognized, comprising ¥399.358 million in goodwill and ¥322.928 million in customer-related assets. - FY2019First statedAnnual report
「Our group has recognized a significant amount of goodwill associated with the acquisition of shares through business acquisitions and other transactions in its consolidated financial statements. If the profitability of the businesses related to the acquired shares declines due to changes in the operating environment or business conditions and recovery of the investment is no longer expected, losses may arise from impairment of goodwill and other factors.」
The company newly specified the risk that impairment losses on recognized goodwill may arise if the profitability of acquired businesses declines.