Changes in Revenue Recognition Methods Following Adoption of the Revenue Recognition Accounting Standard

「As a result, for the current fiscal year, revenue decreased by ¥4,022 million, cost of revenue decreased by ¥4,018 million, and operating profit, ordinary profit and profit before income taxes decreased by ¥3 million each.」

「As a result, for the cumulative third quarter of the current fiscal year, revenue decreased by ¥3,048 million, cost of revenue decreased by ¥3,027 million, and operating profit, ordinary profit and profit before income taxes decreased by ¥20 million each.」

「As a result, for the cumulative second quarter of the current fiscal year, revenue decreased by ¥2,224 million, cost of revenue decreased by ¥2,188 million, and operating profit, ordinary profit and profit before income taxes decreased by ¥36 million each.」

「The Company applied the Accounting Standard for Revenue Recognition (Accounting Standards Board of Japan Statement No. 29, 31 March 2020) and other standards from the beginning of the first quarter of the current fiscal year, and began recognizing revenue 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. The main changes were that, whereas revenue had previously been recognized at the gross amount of consideration received from customers, transactions in which the Group acts as an agent are now recognized on a net basis, after deducting amounts paid to suppliers from the gross amount of consideration received. In addition, for certain PR and advertising services, revenue had previously been recognized in the month in which acceptance procedures were completed, but for transactions in which the performance obligation is determined to be satisfied over a period of time, revenue is now recognized over that period.」