Slow-moving inventory and inventory valuation risk associated with high-variety, low-volume production
First written in FY2021. 4 of 11 entries say "Worsened", first in FY2023-Q1. Latest entry: FY2026-H1.
Nippon Thompson moved to the "Worse" side of this theme in 2022, 1 year before the typical company in this theme (2023).
The whole theme swung hardest in 2018: 3 of 7 companies on the "Worse" side.
6 other companies' latest entry also says "Mitigated".
- FY2026-H1MitigatedAnnual report
「Total assets increased by ¥1,488 million from the end of the previous consolidated fiscal year to ¥122,594 million. This mainly reflected increases of ¥1,845 million in notes and accounts receivable and ¥1,791 million in investment securities, partly offset by a ¥2,426 million decrease in inventories, among other factors.」
Inventories decreased by ¥2,426 million from the end of the previous consolidated fiscal year, reducing exposure to slow-moving inventory and valuation risks associated with high-variety, low-volume production. - FY2025MitigatedAnnual report
「The Group values inventories using the cost method based primarily on the weighted-average method, with the carrying amount written down when profitability declines.」
Inventories decreased from ¥41,804 million to ¥38,794 million, while the inventory valuation loss included in cost of sales also decreased from ¥1,232 million to ¥1,080 million. - FY2024-Q3Expansion of the impact of slow-moving inventory write-downsAnnual report
「As a result, compared with the previous method, cost of sales for the cumulative third quarter of the current consolidated fiscal year increased by ¥564 million, while operating income, ordinary income and profit before income taxes for the quarter each decreased by the same amount.」
The Company continued to record write-downs of slow-moving inventory using the new valuation rate based on accumulated data from the new core business system. The impact on cost of sales increased from ¥359 million for the cumulative second quarter to ¥564 million. - FY2024-Q2Expansion of the impact of slow-moving inventory write-downsAnnual report
「As a result, compared with the previous method, cost of sales for the cumulative second quarter of the current consolidated fiscal year increased by ¥359 million, while operating income, ordinary income and profit before income taxes for the quarter each decreased by the same amount.」
The Company continued to record write-downs of slow-moving inventory using the new valuation rate based on accumulated data from the new core business system. The impact on cost of sales increased from ¥172 million in the first quarter to ¥359 million for the cumulative second quarter. - FY2024-Q1Review of the valuation rate for slow-moving inventoryAnnual report
「As a result, compared with the previous method, cost of sales for the cumulative first quarter of the current consolidated fiscal year increased by ¥172 million, while operating income, ordinary income and profit before income taxes for the quarter each decreased by the same amount.」
Using accumulated data from the new core business system, the Company reviewed the valuation rate for slow-moving inventory and changed its accounting treatment to more appropriately reflect declines in inventory profitability. The new valuation rate increased cost of sales by ¥172 million. - FY2023WorsenedAnnual report
「The Group values inventories using the cost method based primarily on the weighted-average method, with the carrying amount written down when profitability declines.」
Inventories increased from ¥33,575 million in the previous fiscal year to ¥38,183 million. The Company disclosed increases in inventories at overseas subsidiaries due to the weaker yen and additional inventory build-up in preparation for a recovery in demand, expanding exposure to slow-moving inventory and valuation risks. - FY2023-Q3WorsenedAnnual report
「Total assets increased by ¥4,282 million from the end of the previous consolidated fiscal year to ¥111,361 million. This mainly reflected increases of ¥1,664 million in notes and accounts receivable and ¥3,721 million in inventories, among others, and a decrease of ¥1,145 million in cash and deposits, among others.」
Inventories related to slow-moving inventory and inventory valuation risks associated with high-variety, low-volume production increased by ¥3,721 million from the end of the previous fiscal year, expanding exposure. - FY2023-Q2WorsenedAnnual report
「Total assets increased by ¥5,741 million from the end of the previous consolidated fiscal year to ¥112,819 million. This mainly reflected increases of ¥1,167 million in cash and deposits, ¥2,118 million in notes and accounts receivable, and ¥3,113 million in inventories, among others, and a decrease of ¥1,085 million in investment securities, among others.」
The balance of inventories related to high-variety, low-volume production increased by ¥3,113 million from the end of the previous fiscal year, expanding exposure to slow-moving inventory and valuation risks. - FY2023-Q1WorsenedAnnual report
「Total assets increased by ¥3,153 million from the end of the previous consolidated fiscal year to ¥110,232 million, mainly due to increases of ¥1,480 million in cash and deposits and ¥1,695 million in inventories, among other factors.」
Inventories increased by ¥1,695 million from the end of the previous consolidated fiscal year, expanding exposure to slow-moving inventory and valuation risks associated with high-variety, low-volume production. - FY2022Increase in inventories and reversal of inventory valuation lossesAnnual report
「Amount recorded in the consolidated financial statements for the current consolidated fiscal year: Inventories ¥33,575 million」
Inventories increased from ¥31,485 million in the previous fiscal year to ¥33,575 million. Meanwhile, the inventory valuation loss included in cost of sales was reversed by ¥230 million in the current fiscal year, compared with ¥401 million in the previous fiscal year. - FY2021First statedAnnual report
「To respond rapidly to user needs, the Group plans production of high-variety, low-volume inventories based on projected future sales. As the sales and consumption potential of this inventory is expected to decline as its holding period lengthens, the Group identifies slow-moving inventory by considering sales performance by holding period and subjects it to write-downs. Amounts recorded in the consolidated financial statements for the current consolidated fiscal year: Inventories ¥31,485 million.」
The Company disclosed write-downs of slow-moving inventory associated with planned high-variety, low-volume production, and changes in estimates resulting from changes in business plans and market conditions, as separate risks. In the current fiscal year, an inventory valuation loss of ¥401 million was included in cost of sales.