Uncertainty in Estimating Construction Costs under the Percentage-of-Completion Method
First written in FY2021. 7 of 10 entries say "Restated". Latest entry: FY2026.
Nireco moved to the "Worse" side of this theme in 2026, 1 year after the typical company in this theme (2025).
The whole theme swung hardest in 2024: 9 of 64 companies on the "Worse" side.
7 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「Estimates of total construction costs are calculated by accumulating detailed amounts based on objective prices, such as internally approved planned unit prices. However, construction projects are highly individual, and because their basic specifications and work content are carried out in accordance with customer instructions, it is difficult to establish uniform criteria for judgment. In addition, changes in the components used due to design changes during construction and fluctuations in material unit costs may arise, making timely and appropriate revisions to estimated total construction costs complex.」
The Company specified uncertainties in construction cost estimates arising from design changes, changes in components used and fluctuations in material unit costs. Revenue for the current fiscal year calculated using the cost-based input method was ¥945.637 million. - FY2024-Q3RestatedAnnual report
「During the cumulative third quarter, there were no newly arising business or other risks. There were also no material changes in the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there has been no new occurrence or material change in the uncertainty surrounding estimates of construction costs under the percentage-of-completion method. - FY2024-Q2RestatedAnnual report
「No new business or other risks arose during the six-month period of the current consolidated fiscal year. There were also no material changes to the “Business and Other Risks” described in the securities report for the previous fiscal year.」
The Company states that there has been no new occurrence or material change in the uncertainty surrounding estimates of construction costs under the percentage-of-completion method. - FY2024-Q1RestatedAnnual report
「During the cumulative first quarter, there were no newly arising business or other risks. There were also no material changes in the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there has been no new occurrence or material change in the uncertainty surrounding estimates of construction costs under the percentage-of-completion method. - FY2023WorsenedAnnual report
「Estimates of total construction costs may change due to increases in key assumptions, such as unit material costs. Such changes in the estimated total construction costs may cause the percentage of completion to change and could have a material impact on the consolidated financial statements for the following fiscal year.」
While recording ¥934.607 million in revenue under the percentage-of-completion method, the Company specified increases in unit material costs, design changes and difficulty procuring components as key uncertainties in its estimates. - FY2023-Q1RestatedAnnual report
「During the cumulative first quarter, there were no newly arising business or other risks. There were also no material changes in the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there has been no new occurrence or material change in the uncertainty surrounding estimates of construction costs under the percentage-of-completion method. - FY2022-Q3RestatedAnnual report
「During the cumulative third quarter, there were no newly arising business or other risks. There were also no material changes in the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there has been no new occurrence or material change in the uncertainty surrounding estimates of construction costs under the percentage-of-completion method. - FY2022-Q2RestatedAnnual report
「No new business or other risks arose during the six-month period of the current consolidated fiscal year. There were also no material changes to the “Business and Other Risks” described in the securities report for the previous fiscal year.」
The Company states that there has been no new occurrence or material change in the uncertainty surrounding estimates of construction costs under the percentage-of-completion method. - FY2022-Q1RestatedAnnual report
「During the cumulative first quarter, there were no newly arising business or other risks. There were also no material changes in the business and other risks described in the securities report for the previous fiscal year.」
The Company states that there has been no new occurrence or material change in the uncertainty surrounding estimates of construction costs under the percentage-of-completion method. - FY2021First statedAnnual report
「Estimates of total construction costs may change because construction generally extends over a long period and construction contract modifications, or fluctuations in material and labor costs, may arise during the course of construction. Such changes in the estimated total construction costs may cause the percentage of completion to change and could have a material impact on the consolidated financial statements for the following fiscal year.」
While recording ¥779.855 million in revenue under the percentage-of-completion method, the Company separately disclosed for the first time the estimation risk that total costs and the percentage of completion may change due to contract modifications and fluctuations in material and labor costs for long-term construction projects.