Uncertainty in Estimates Relating to the Percentage-of-Completion Method, Impairment, Bad Debts and Deferred Tax Assets
First written in FY2021. 2 of 3 entries say "Materialised", first in FY2021. Latest entry: FY2024.
Aida Engineering moved to the "Worse" side of this theme in 2021, the same year as the typical company in this theme.
The whole theme swung hardest in 2020: 5 of 22 companies on the "Worse" side.
21 other companies' latest entry also says "Restated".
- FY2024RestatedAnnual report
「In recognizing revenue from construction contracts involving performance obligations satisfied over a certain period, assessing impairment of fixed assets and calculating the recoverability of deferred tax assets, the Group makes accounting estimates based on certain assumptions regarding the estimated total cost of construction, the recoverable amount of fixed assets, the expected order intake for major products, gross profit margins and other factors.」
Estimation uncertainty relating to revenue recognition for construction contracts, impairment of fixed assets and the recoverability of deferred tax assets continued to be disclosed. - FY2022MaterialisedAnnual report
「As the earnings initially anticipated for the asset groups above could no longer be expected due to changes in the business environment, the carrying amount was reduced to the recoverable amount in accordance with accounting standards, and the resulting decrease of ¥492 million was recognized as an impairment loss under extraordinary losses.」
With respect to accounting estimate risk, actual results were reported including impairment of fixed assets at a Chinese subsidiary of ¥492 million, an allowance for doubtful accounts of ¥1,073 million and revenue from construction contracts of ¥21,513 million. - FY2021MaterialisedAnnual report
「In recognizing revenue under the percentage-of-completion method, assessing impairment of fixed assets, calculating the allowance for doubtful accounts and assessing the recoverability of deferred tax assets, the Group makes accounting estimates based on certain assumptions regarding the estimated total cost of construction, the recoverable amount of fixed assets, the amount expected to be recovered based on debtors' payment plans, the expected order intake for major products, gross profit margins and other factors.」
Uncertainty in accounting estimates was first explicitly disclosed as a standalone risk. The disclosure reported revenue recognized under the percentage-of-completion method of ¥23,347 million, impairment losses of ¥686 million, an allowance for doubtful accounts of ¥971 million and deferred tax assets of ¥1,825 million, with the effects of impairment and the allowance for doubtful accounts having actually materialized.