Risk of Cost Estimates in Recognizing Contract Development Revenue Based on Progress
First written in FY2022. 3 of 5 entries say "Materialised", first in FY2024-Q1. Latest entry: FY2024.
Tose moved to the "Worse" side of this theme in 2024, 1 year before the typical company in this theme (2025).
The whole theme swung hardest in 2026: 3 of 11 companies on the "Worse" side.
0 other companies' latest entry also says "Materialised".
- FY2024MaterialisedAnnual report
「Amounts recorded in the consolidated financial statements for the fiscal year Revenue from satisfaction of performance obligations over time ¥2,026.523 million」
The company continued to recognize revenue based on the percentage of completion and recorded ¥2,026.523 million during the fiscal year. It also continued to disclose the risk of additional work and changes in the percentage of completion due to specification changes and unforeseen costs. - FY2024-Q2MaterialisedAnnual report
「Revenue was ¥2,013 million, down 33.7% year on year, due to unexpected problems in 2 digital entertainment development projects and delays in development work. In terms of profit, in addition to the decline in profit resulting from lower revenue, development costs increased in the affected projects, resulting in an operating loss of ¥459 million, compared with operating profit of ¥258 million in the same period of the previous year.」
Unexpected problems, development delays and higher development costs actually occurred in 2 development projects, resulting in lower revenue and an operating loss of ¥459 million. The risks related to the percentage of completion and cost estimates materialized in specific project results. - FY2024-Q1MaterialisedAnnual report
「In terms of profit, costs increased in some projects because development was prolonged to improve the quality of deliverables and other reasons, causing the gross profit margin to deteriorate sharply temporarily.」
Some development projects were prolonged to improve the quality of deliverables and for other reasons, resulting in higher costs and a substantial temporary deterioration in the gross profit margin. - FY2023RestatedAnnual report
「Revenue from satisfaction of performance obligations over time ¥1,317.505 million」
The company continued to recognize revenue based on the percentage of completion and recorded ¥1,317.505 million in revenue from performance obligations satisfied over time during the fiscal year. The risk of changes in the percentage of completion due to specification changes and unforeseen costs also continues. - FY2022First statedAnnual report
「The company is working to improve the accuracy of cost estimates and has established and operates an appropriate system that includes checking for abnormal values, including changes in estimated costs as projects progress. However, during development, customer circumstances and other factors may increase the work required due to changes in the specifications or development period initially established, potentially increasing estimated costs. In that case, the percentage of completion may change, potentially having a significant impact on the performance of the group.」
With the adoption of the revenue recognition standard, the company separately disclosed the risk that changes in the percentage of completion caused by specification or schedule changes and unforeseen costs could affect the recognition of contract development revenue and performance.