Risks of Development Delays and Additional Costs in New System Development Projects
First written in FY2019. 2 of 4 entries say "Worsened", first in FY2020-Q2. Latest entry: FY2021.
Oi Electric moved to the "Worse" side of this theme in 2019, 2 years before the typical company in this theme (2021).
The whole theme swung hardest in 2019: 5 of 11 companies on the "Worse" side.
0 other companies' latest entry also says "Reframed".
- FY2021ReframedAnnual report
「For orders on hand for which losses are expected to arise and the amount can be reasonably estimated, recording the estimated loss as a provision for contract losses may affect the financial position and operating results of the Group.」
The specific explanation of development delays and additional costs for new system development projects has been removed, and the issue is now presented as a general risk of contract losses. - FY2020WorsenedAnnual report
「In addition, when a significant increase in costs is expected due to an extension of the software development period for a system development project undertaken by the Company, the Company estimates those costs and records the amount of losses expected to arise in the future. However, the execution schedule, organizational structure, scope of work and delay penalties may change depending on the progress and results of future discussions.」
Additional costs and schedule-change risks relating to new system development projects continue to be disclosed. The balance of the provision for contract losses was ¥1,218.88 million at the end of the period. - FY2020-Q2WorsenedAnnual report
「Change in provision for contract losses (△ indicates a decrease) 293,413 147,061」
During the cumulative second quarter, the provision for contract losses increased by ¥147 million, bringing the balance of the provision, including the balance at the end of the previous consolidated fiscal year, to ¥1,216.061 million. Additional costs and the risk of contract losses relating to new system development projects and other projects continue to expand. - FY2019First statedAnnual report
「For a new system development project, the Company records a provision for contract losses after reasonably estimating the increase in costs resulting from the extension of the software development period. However, if costs fluctuate further due to revisions to the execution schedule, organisational structure, work content or other factors based on future progress, this could affect the financial position and operating results of the Group.」
The software development period for a new system development project was extended, and the resulting cost increase actually occurred. The Company recorded an estimated ¥1,015 million provision for contract losses and disclosed the risk of further cost fluctuations due to future progress, the organisational structure, work content, delay penalties and other factors.