Inventory Valuation and Disposal Risks from Changes in Specifications and Demand Fluctuations
First written in FY2020. 6 of 12 entries say "Mitigated", first in FY2024-Q2. Latest entry: FY2026.
The whole theme swung hardest in 2026: 22 of 47 companies on the "Worse" side.
18 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「The inventory valuation loss recognized in the consolidated financial statements was ¥6.952 million in the previous consolidated fiscal year and a reversal of ¥2.848 million in the current consolidated fiscal year (a negative amount represents a reversal).」
The inventory balance decreased from ¥1,127 million in the previous fiscal year to ¥1,059 million, while the inventory valuation loss shifted from a ¥6.952 million loss to a ¥2.848 million reversal, reducing exposure to inventory valuation and disposal risks in part. - FY2026-H1MitigatedAnnual report
「Current assets increased by ¥6 million from the end of the previous consolidated fiscal year to ¥4,651 million. The increase was attributable to a ¥159 million increase in cash and deposits. The decrease was attributable to decreases of ¥67 million in raw materials and supplies, ¥44 million in merchandise and products, and ¥39 million in notes and accounts receivable.」
Raw materials and supplies and merchandise and products decreased from the end of the previous consolidated fiscal year, reducing exposure in part to inventory valuation and disposal risks associated with specification changes and demand fluctuations. - FY2025MitigatedAnnual report
「The inventory valuation loss recognized in the consolidated financial statements was ¥7.105 million in the previous consolidated fiscal year and ¥6.952 million in the current consolidated fiscal year.」
The inventory balance decreased from ¥1,212 million to ¥1,127 million, and the valuation loss also declined slightly from ¥7.105 million to ¥6.952 million, reducing exposure to inventory valuation risk in part. - FY2025-H1MitigatedAnnual report
「Current assets decreased by ¥63 million from the end of the previous consolidated fiscal year to ¥4,344 million. The decrease was attributable to decreases of ¥83 million in raw materials and supplies, ¥62 million in notes and accounts receivable, ¥42 million in other current assets (non-trade receivables), and ¥31 million in merchandise and products. The increase was attributable to increases of ¥141 million in electronically recorded monetary claims and ¥42 million in work in process.」
Raw materials and supplies decreased by ¥83 million and merchandise and products by ¥31 million, reducing the inventory balance from the end of the previous consolidated fiscal year. Exposure to inventory valuation and disposal risks associated with specification changes and demand fluctuations has decreased in part. - FY2024MaterialisedAnnual report
「The inventory valuation loss recognized in the consolidated financial statements was a reversal of ¥2.876 million in the previous consolidated fiscal year and a loss of ¥7.105 million in the current consolidated fiscal year (a negative amount represents a reversal).」
While the inventory balance decreased from ¥1,430 million in the previous fiscal year to ¥1,212 million, the Group shifted from a reversal of valuation losses in the previous fiscal year to recognition of a ¥7.105 million valuation loss in the current fiscal year, and the inventory valuation risk materialized as an actual loss. - FY2024-Q3MitigatedAnnual report
「Current assets increased by ¥16 million from the end of the previous consolidated fiscal year to ¥4,342 million. The increase was attributable to increases of ¥189 million in cash and deposits, ¥102 million in electronically recorded monetary claims, and ¥55 million in merchandise and products. The decrease was attributable to decreases of ¥156 million in raw materials and supplies, ¥131 million in notes and accounts receivable, and ¥48 million in work in process.」
Raw materials and supplies decreased by ¥156 million and work in process by ¥48 million, and total inventories decreased from the end of the previous fiscal year even after taking into account the increase in merchandise and products. Exposure to inventory valuation and disposal risks associated with specification changes and demand fluctuations has decreased in part. - FY2024-Q2MitigatedAnnual report
「Current assets decreased by ¥31 million from the end of the previous consolidated fiscal year to ¥4,293 million. The decrease was attributable to decreases of ¥67 million in raw materials and supplies and ¥62 million in notes and accounts receivable.」
Raw materials and supplies decreased by ¥67 million, reducing the inventory balance. Exposure to inventory valuation and disposal risks associated with specification changes and demand fluctuations has decreased in part from the end of the previous fiscal year. - FY2023WorsenedAnnual report
「Current assets increased by ¥418 million from the end of the previous consolidated fiscal year to ¥4,325 million. The increase was attributable to increases of ¥344 million in raw materials and supplies, ¥173 million in cash and deposits, ¥43 million in work in process, and ¥43 million in electronically recorded monetary claims.」
Raw materials and supplies increased by ¥344 million and work in process by ¥43 million, while the increase in inventories reduced operating cash flow by ¥372 million. The increase in inventory balances expanded exposure to valuation and disposal risks associated with demand fluctuations and specification changes. The inventory valuation loss for the fiscal year did not exceed the amount recognized in the previous fiscal year and resulted in a reversal gain of ¥2.876 million. - FY2023-Q3RestatedAnnual report
「Current assets increased by ¥418 million from the end of the previous consolidated fiscal year to ¥4,325 million. The increase was attributable to increases of ¥386 million in raw materials and supplies, ¥71 million in notes and accounts receivable, ¥63 million in work in process, and ¥31 million in electronically recorded monetary claims.」
The disclosure states that raw materials and supplies increased by ¥386 million and work in process by ¥63 million. An increase in inventory balances associated with the valuation and disposal risks arising from specification changes and demand fluctuations can be confirmed, but no new valuation loss is reported. - FY2022RestatedAnnual report
「There is also a possibility that factors leading to large-scale disposal, such as specification changes, may arise. Accordingly, our Group monitors the aging of inventories at monthly management meetings, considers the expected shipment volumes of merchandise and products and whether customers can purchase raw materials, and endeavors to maintain appropriate inventory levels.」
The Group continues to address the risk of inventory disposal due to specification changes and demand fluctuations through monthly monitoring and consideration of whether customers can purchase the inventory. Raw materials and supplies increased by ¥210.729 million year on year, and an inventory valuation loss of ¥7.530 million was recognized. - FY2021RestatedAnnual report
「However, if factors arise that lead to disposal on a scale exceeding expectations, losses recognized could be substantial compared with previously recorded inventory valuation losses, potentially adversely affecting the financial position and performance of our Group.」
The disclosure describes the difficulty of forecasting demand in the semiconductor industry and the risk of inventory disposal due to specification changes, stating that appropriate inventory levels are maintained through monthly monitoring of slow-moving inventory and consideration of whether customers can purchase the inventory. - FY2020First statedAnnual report
「If factors arise that could lead to large-scale disposal, such as purchased materials becoming unusable due to specification changes, this could adversely affect the financial position and performance of our Group.」
The Group addresses this through monthly inventory monitoring and quarterly recognition of inventory valuation losses. It considers the risk associated with finished inventory to be low.