Impairment of UUUM Shares and Goodwill Amortization Due to Share Price Decline

「At the end of the fiscal year, the Company determined that there were indications of impairment in ¥1,233,062 thousand of goodwill and ¥2,815,363 thousand of customer-related assets associated with UUUM株式会社, as the business plan at the time of acquisition diverged from the results at the end of the fiscal year. However, because the total undiscounted future cash flows expected from the asset group, including the goodwill and customer-related assets, exceeded the carrying amount of the asset group, the Company determined that recognition of an impairment loss was not necessary.」

「Because the market price of UUUM Co., Ltd. shares had declined substantially below their acquisition cost and was not considered likely to recover, an impairment loss on investments in affiliates of ¥3,519.361 million was recognized in the second quarter of the consolidated fiscal year.」

「Meanwhile, because the market price of the UUUM Co., Ltd. shares held by the Company had declined substantially below their acquisition cost, an impairment loss on the shares was recognized in the non-consolidated financial statements. Accordingly, in the consolidated financial statements, the goodwill amortization expense was recognized as an extraordinary loss pursuant to Paragraph 32 of the Practical Guidelines for Capital Consolidation Procedures in Consolidated Financial Statements, issued by the Japanese Institute of Certified Public Accountants and last revised on 28 October 2022 as Accounting Standards Committee Report No. 7.」