Acquired Subsidiaries’ Failure to Meet Earnings Targets and Impairment Risk
First written in FY2024. 1 of 2 entries say "Materialised", first in FY2024. Latest entry: FY2025.
The whole theme swung hardest in 2026: 17 of 32 companies on the "Worse" side.
11 other companies' latest entry also says "Mitigated".
- FY2025MitigatedAnnual report
「Net income attributable to owners of the parent was ¥1,495 million, up 57.7% year on year, due to increases in operating income and ordinary income, the absence in the current year of the ¥303 million impairment loss recorded in the previous year, and a greater-than-expected reduction in corporate tax, inhabitants' tax and enterprise tax resulting from application of the tax credit for promoting wage increases and other factors.」
The company stated that the ¥303 million impairment loss incurred at acquired subsidiaries in the previous year did not recur in the current year. However, it did not state that the risk of earnings shortfalls at acquired subsidiaries had been eliminated. - FY2024MaterialisedAnnual report
「At the time of acquiring shares in the consolidated subsidiaries 株式会社ａ－ＬＩＮＫ, 株式会社ｉ－ＢＲＩＤＧＥ and ｉ－ＢＲＩＤＧＥ Ｓｙｓｔｅｍｓ Ｐｈｉｌｉｐｐｉｎｅｓ，Ｉｎｃ．, the company recognized goodwill based on expected excess earning power. However, the growth in revenue at the three companies fell short of the original plan. The company reduced the entire unamortized balance of goodwill and the carrying amounts of the operating assets held by the three companies to their recoverable amounts, and recorded the reductions as impairment losses under extraordinary losses.」
Because revenue growth at a-LINK, i-BRIDGE and the Philippine subsidiary fell short of the original plan, the company recorded ¥303 million in impairment losses on goodwill and other assets.