Changes to revenue recognition for points and delivery services due to the adoption of the revenue recognition accounting standard

「The main changes resulting from the application of the Revenue Recognition Standard and related standards are as follows. ・Revenue recognition related to the company’s own points program For points granted to customers when products were sold, the company previously recognized a points provision for the amount expected to be used in the future, to cover sales discounts arising from point redemption. The accounting treatment has been changed to recognize the points granted as performance obligations to customers and record them as contract liabilities. ・Revenue recognition related to delivery services in mail-order sales Shipping charges received from customers were previously deducted from selling, general and administrative expenses. Because the service is included in the performance obligation to provide the product, the charges are now recognized as revenue.」

「The Accounting Standard for Revenue Recognition (Accounting Standard No. 29, 31 March 2021, hereinafter the “Revenue Recognition Standard”) and related standards have been applied from the beginning of the current first-quarter consolidated accounting period. Revenue is recognized at the amount expected to be received in exchange for the promised goods or services when control of those goods or services is transferred to the customer.」