Adoption of the revenue recognition accounting standard

「The Company applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, 31 March 2020) and other relevant standards from the beginning of the first quarter of the current consolidated fiscal year. Revenue is recognized at the amount expected to be received in exchange for promised goods or services when control of those goods or services is transferred to the customer. Accordingly, whereas revenue from part of the entrance fees for fee-based nursing homes was previously recognized upon admission, it is now recognized over the reasonably estimated expected period of residence. In addition, for advance receipts from prepaid specific transactions handled by certain consolidated subsidiaries, revenue was previously recognized after a specified period had elapsed, while an allowance for losses on revival of advance receipts was recorded based on the amount expected to be revived from past results in preparation for future revival. The recognition method has been changed so that revenue is recognized when it is determined that the likelihood of use by mutual-aid association members has become extremely low. As a result, the opening balance of retained earnings decreased by ¥18 million.」