Risk of impairment due to declining future cash flows from fixed assets
First written in FY2018. 1 of 2 entries say "Materialised", first in FY2023. Latest entry: FY2023.
Nagaoka International moved to the "Worse" side of this theme in 2023, 4 years after the typical company in this theme (2019).
The whole theme swung hardest in 2020: 13 of 15 companies on the "Worse" side.
14 other companies' latest entry also says "Materialised".
- FY2023MaterialisedAnnual report
「For property, plant and equipment held by the consolidated subsidiary NAGAOKA VIETNAM CO., LTD., the company reduced the carrying amount to the recoverable amount because future cash flows were not expected to exceed the investment amount, and recognized the reduction of ¥105.405 million as an impairment loss under extraordinary losses. Although the recoverable amount was calculated based on value in use, the company recognized the entire carrying amount as an impairment loss because future cash flows were negative.」
Future cash flows from property, plant and equipment held by the Vietnamese subsidiary became negative, and the company recognized an impairment loss of ¥105.405 million, equivalent to the full carrying amount of buildings, machinery and other assets. The recoverability risk for property, plant and equipment materialized as an actual loss. - FY2018First statedAnnual report
「If expected future cash flows from the relevant assets decline and their recoverability deteriorates, the Group may be required to recognize impairment losses on property, plant and equipment, which could affect its operating results and financial position.」
The company separately identifies impairment risk for property, plant and equipment, including factories and machinery, due to lower future cash flows and recoverability.