Risk of unrealized M&A synergies and impairment losses
First written in FY2023. 2 of 4 entries say "Materialised", first in FY2024. Latest entry: FY2026.
The whole theme swung hardest in 2024: 40 of 92 companies on the "Worse" side.
- FY2026RestatedAnnual report
「During the consolidated fiscal year, we determined that indications of impairment existed, but concluded that no impairment loss needed to be recognized because undiscounted future cash flows exceeded the carrying amount of the property, plant and equipment in the asset group, including goodwill.」
Although the company identified indications of impairment for goodwill and other assets related to the Alive acquisition, it recognized no additional impairment loss during the fiscal year. It states that impairment could be possible in the following fiscal year if performance falls substantially below the business plan. - FY2025MaterialisedAnnual report
「During the consolidated fiscal year, we determined that there were indications of impairment at Launch Group Holdings Pty Ltd and recognized an impairment loss of ¥480.064 million on customer-related assets and ¥60.782 million on property, plant and equipment, using value in use as the recoverable amount.」
In connection with the failure to meet the business plan after the Australian acquisition, the company recognized additional impairment losses of ¥480.064 million on customer-related assets and ¥60.782 million on property, plant and equipment, for a total of ¥540.847 million. - FY2024MaterialisedAnnual report
「Following a valuation based on future cash flows under the revised plan, we recognized an impairment loss of ¥1,556.996 million on goodwill and customer-related assets.」
Due to the failure to meet the business plan after the Launch acquisition, the company recognized actual impairment losses of ¥908.374 million on goodwill and ¥648.622 million on customer-related assets, for a total of ¥1,556.996 million. - FY2023First statedAnnual report
「Changes in the business environment after an acquisition or unforeseen events could prevent the Group from achieving the expected synergies or business expansion, potentially resulting in impairment losses and affecting the Group's performance.」
For M&A transactions, including the Launch acquisition, the company identifies as a standalone risk the failure to achieve expected synergies or business expansion and the occurrence of impairment losses on goodwill.