Risks Associated with Estimation Difficulty, Increasingly Large Systems, and Post-Delivery Defects
First written in FY2016. 15 of 28 entries say "Restated". Latest entry: FY2026.
The whole theme swung hardest in 2020: 6 of 10 companies on the "Worse" side.
0 other companies' latest entry also says "Other".
- FY2026Full-year update to the provision for losses on contractsAnnual report
「Provision for loss on orders recognized in expenses was as follows. Previous consolidated fiscal year △¥5.012 million Current consolidated fiscal year △¥334 thousand」
The balance of the provision for loss on orders at the end of the fiscal year decreased from ¥1.869 million at the previous fiscal year-end to ¥1.205 million. Financial recognition related to unprofitable projects remains ongoing. - FY2026-H1Updated the provision balance for losses on ordersAnnual report
「Provision for loss on orders 1,869 1,826」
The balance of the provision for loss on orders decreased from ¥1.869 million at the end of the previous consolidated fiscal year to ¥1.826 million at the end of the current interim consolidated fiscal period. - FY2025Updated the provision balance for losses on ordersAnnual report
「Provision for loss on orders 2,388 1,869」
The balance of the provision for loss on orders decreased from ¥2.388 million at the end of the previous fiscal year to ¥1.869 million. The financial recognition related to large, complex projects and unprofitable projects was updated. - FY2025-H1Updated the provision balance for losses on ordersAnnual report
「Provision for loss on orders 2,388 6,561」
The provision for loss on orders increased from ¥2.388 million at the end of the previous consolidated fiscal year to ¥6.561 million at the end of the current interim consolidated fiscal period. The financial recognition related to previously identified risks concerning large, complex projects and profitability management was updated. - FY2024Provision for losses on contracts recorded againAnnual report
「Provision for loss on orders - 2,388」
A provision for loss on orders, which had no balance at the end of the previous fiscal year, was recognized at ¥2.388 million at the end of the current fiscal year. The financial recognition related to risks concerning large, complex projects and profitability management was updated. - FY2023MitigatedAnnual report
「To prevent such events from occurring, our Group continuously works to improve quality. In addition, assuming that there may be cases in which system defects or flaws cannot be detected manually, we are also proceeding with the introduction of third-party verification tools.」
In addition to quality improvement measures addressing the risk of defects after delivery, the introduction of third-party verification tools is also under way. - FY2023-Q3RestatedAnnual report
「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」
No material changes were identified in the project execution risks related to estimation difficulty, larger systems and post-delivery defects. - FY2023-Q2RestatedAnnual report
「During the cumulative second quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that management recognizes could materially affect the financial position, operating results and cash flows of the consolidated companies, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」
No material changes were identified in the project execution risks related to estimation difficulty, larger systems and post-delivery defects. - FY2022-Q3RestatedAnnual report
「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」
No material changes were identified in the project execution risks related to estimation difficulty, larger systems and post-delivery defects. - FY2022-Q2RestatedAnnual report
「During the cumulative second quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」
No material changes were identified in the project execution risks related to estimation difficulty, larger systems and post-delivery defects. - FY2022-Q1Updated the provision balance for losses on ordersAnnual report
「Provision for losses on contracts 4,042 -」
The balance of the provision for losses on contracts declined from ¥4.042 million at the end of the previous consolidated fiscal year to zero at the end of the first quarter of the current fiscal year. - FY2022-Q1RestatedAnnual report
「During the first quarter of the current consolidated cumulative period, there were no occurrences of matters that could materially affect investors’ investment decisions among the matters relating to the business and financial position described in this quarterly report, nor were there any material changes to the “Business and Other Risks” described in the annual securities report for the previous fiscal year.」
No material changes were identified in the project execution risks related to estimation difficulty, larger systems and post-delivery defects. - FY2021Full-year update to the provision for losses on contractsAnnual report
「Provision for losses on contracts - 4,042」
The balance of the provision for losses on contracts at the end of the fiscal year was disclosed as ¥4.042 million. The financial provision related to the previously identified risks concerning large and complex projects and profitability management was updated to the full-year figure. - FY2021-Q3Updated the provision balance for losses on ordersAnnual report
「Provision for losses on contracts - 8,388」
The provision for losses on contracts increased from ¥5.917 million at the end of the second quarter to ¥8.388 million. The financial charge related to the previously identified risks concerning large and complex projects and profitability management was updated. - FY2021-Q2Provision for losses on contracts recordedAnnual report
「Provision for losses on contracts - 5,917」
A provision for losses on contracts of ¥5.917 million was recorded in the quarterly consolidated balance sheet and statement of cash flows. This represents a financial charge related to the previously identified risks concerning large and complex projects and profitability management. - FY2020-Q3RestatedAnnual report
「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」
No material changes were identified in the project execution risks related to estimation difficulty, larger systems and post-delivery defects. - FY2019MitigatedAnnual report
「As measures to address these risks, in addition to strengthening project management by each business division, we hold order review committees, including executive officers, for large projects above a specified value. We conduct reviews before proposals are submitted and hold monthly status meetings after contracts are awarded. When projected profitability falls materially below plan, we promptly take measures as needed.」
Measures to address project risks have been specified through order review committees for large projects, pre-proposal reviews and monthly status meetings after contracts are awarded. - FY2019-Q3RestatedAnnual report
「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」
No material changes were identified in the project execution risks related to estimation difficulty, larger systems and post-delivery defects. - FY2019-Q2RestatedAnnual report
「During the cumulative second quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」
No material changes were identified in the project execution risks related to estimation difficulty, larger systems and post-delivery defects. - FY2019-Q1RestatedAnnual report
「During the first quarter of the current consolidated cumulative period, there were no occurrences of matters that could materially affect investors’ investment decisions among the matters relating to the business and financial position described in this quarterly report, nor were there any material changes to the “Business and Other Risks” described in the annual securities report for the previous fiscal year.」
No material changes were identified in the project execution risks related to estimation difficulty, larger systems and post-delivery defects. - FY2018RestatedAnnual report
「In our Group's systems development business, we are working to prevent unprofitable projects by improving the accuracy of estimates for each project phase and strengthening project management.」
Risks including estimation errors, inadequate management of large and complex projects and post-delivery defects, together with preventive measures involving more accurate estimates and stronger project management, continue to be identified. - FY2018-Q3RestatedAnnual report
「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」
No material changes were identified in the project execution risks related to estimation difficulty, larger systems and post-delivery defects. - FY2018-Q2RestatedAnnual report
「During the cumulative second quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」
No material changes were identified in the project execution risks related to estimation difficulty, larger systems and post-delivery defects. - FY2018-Q1RestatedAnnual report
「During the first quarter of the current consolidated cumulative period, there were no occurrences of matters that could materially affect investors’ investment decisions among the matters relating to the business and financial position described in this quarterly report, nor were there any material changes to the “Business and Other Risks” described in the annual securities report for the previous fiscal year.」
No material changes were identified in the project execution risks related to estimation difficulty, larger systems and post-delivery defects. - FY2017WorsenedAnnual report
「In our Group's systems development business, the number of large-scale projects has been increasing year after year. We are therefore working to prevent unprofitable projects by improving the accuracy of estimates for each project phase and strengthening project management.」
The increase in large-scale projects year after year is explicitly identified, indicating greater exposure to larger and more complex systems. Measures to prevent problems through more accurate estimates and stronger project management are also described. - FY2017-Q3RestatedAnnual report
「During the cumulative third quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」
No material changes were identified in the project execution risks related to estimation difficulty, larger systems and post-delivery defects. - FY2017-Q2RestatedAnnual report
「During the cumulative second quarter under review, there were no significant changes in the matters described in this quarterly report regarding the business and accounting conditions that could materially affect investors’ decisions, or in the “Business and Other Risks” described in the securities report for the previous fiscal year.」
No material changes were identified in the project execution risks related to estimation difficulty, larger systems and post-delivery defects. - FY2016First statedAnnual report
「During development, processing requirements not anticipated initially may arise, or development may require more man-hours than expected. In addition, if project management does not function effectively as systems become larger and more complex, this could adversely affect our Group's operating results and financial condition.」
Estimation errors, increases in development man-hours, inadequate management of large and complex projects, delays in delivery and post-delivery defects are identified as a series of project execution risks. The progress made in eliminating unprofitable projects is also presented separately.