Calculation of the Allowance for Loan Losses Incorporating the Impact of COVID-19
First written in FY2021-Q2. 7 of 12 entries say "Restated". Latest entry: FY2025.
The whole theme swung hardest in 2020: 2 of 7 companies on the "Worse" side.
1 other company's latest entry also says "Achieved".
- FY2025AchievedAnnual report
「Based on the above, from the current consolidated accounting year, we have not made additional adjustments to expected loss amounts for borrowers in specific industries.」
We confirmed in the annual financial statements that, from the current consolidated accounting year, we would no longer make the additional loss adjustments for specific industries that had been made in light of COVID-19. - FY2025-H1Ended additional adjustments for specific industriesAnnual report
「Based on the above, from the current interim consolidated accounting period, we have not made additional adjustments to expected loss amounts for borrowers in specific industries.」
We changed our treatment so that, from the interim consolidated accounting period of fiscal 2024, we no longer make the additional loss adjustments for specific industries that had previously been made in light of the impact of COVID-19. - FY2024RestatedAnnual report
「Although losses such as loan losses are expected to arise for some borrowers due to delays in their business recovery and the resulting deterioration in their cash flow, we determine debtor classifications and calculate the allowance for loan losses by incorporating the future outlook, based on the most detailed and up-to-date information we can collect.」
Even after the impact of the infectious disease had subsided, we continued calculating the allowance for loan losses by reflecting delays in borrowers' recovery and deterioration in their cash flow in our future outlook. - FY2024-Q3RestatedAnnual report
「Although we expect losses such as loan losses to arise for some borrowers as their performance and cash flow deteriorate, we assess obligor classifications and calculate the allowance for loan losses by collecting the most detailed and up-to-date information available and incorporating future prospects. This assumption regarding the impact of COVID-19 is uncertain, and if the deterioration in borrowers' performance and the time required for recovery exceed the assumptions based on the latest available information because of weak personal consumption, stagnant production activity, or other factors, losses such as loan losses exceeding estimated losses may arise. This assumption is unchanged from the end of the previous consolidated fiscal year.」
We reconfirmed how to reflect the latest information and future outlook in debtor classifications and the calculation of the allowance for loan losses, as well as the possibility of loan losses exceeding our assumptions. The accounting assumptions relating to COVID-19 are unchanged from the end of the previous fiscal year. - FY2024-Q1RestatedAnnual report
「Although we expect losses such as loan losses to arise for some borrowers as their performance and cash flow deteriorate, we assess obligor classifications and calculate the allowance for loan losses by collecting the most detailed and up-to-date information available and incorporating future prospects. This assumption regarding the impact of COVID-19 is uncertain, and if the deterioration in borrowers' performance and the time required for recovery exceed the assumptions based on the latest available information because of weak personal consumption, stagnant production activity, or other factors, losses such as loan losses exceeding estimated losses may arise.」
The method of reflecting the latest information and future prospects in obligor classifications and the calculation of the allowance for loan losses, as well as the possibility of loan losses exceeding assumptions, was reaffirmed. - FY2023-Q2RestatedAnnual report
「We assume that the effects of the spread of COVID-19 will continue for the time being but gradually subside.」
The assumption that the pandemic's effects would continue for the time being but gradually subside, the calculation of the allowance for loan losses reflecting the latest information and future prospects, and the possibility of losses exceeding assumptions were reaffirmed. - FY2023-Q1RestatedAnnual report
「We assume that the effects of the spread of COVID-19 will continue for the time being but gradually subside. Although we expect losses such as loan losses to arise for some borrowers as their performance and cash flow deteriorate because the stagnation of economic activity continues, we assess obligor classifications and calculate the allowance for loan losses by collecting the most detailed and up-to-date information available and incorporating future prospects. For borrowers in certain industries that have been significantly affected in their business activities, the uncertainty of future prospects is higher. Accordingly, in light of their credit risk, we calculate the allowance for loan losses after making additional necessary adjustments for the expected losses if the possibility of future deterioration in performance is incorporated. This assumption regarding the impact of the spread of COVID-19 is uncertain, and if borrowers' performance deteriorates beyond the assumptions based on the latest available information because of weak personal consumption, stagnant production activity, or other factors, losses such as loan losses exceeding estimated losses may arise. This assumption is unchanged from the end of the previous consolidated fiscal year.」
The assumption that the pandemic's effects would continue for the time being but gradually subside, the calculation of the allowance for loan losses reflecting the latest information and future prospects, additional adjustments by industry, and the possibility of losses exceeding assumptions were reaffirmed. The assumption was unchanged from the end of the previous consolidated fiscal year. - FY2022-Q3Revision of the assumption regarding when the pandemic's effects would subsideAnnual report
「We had assumed that the effects of the spread of COVID-19 would gradually ease during the interim consolidated accounting period toward the end of the current consolidated fiscal year. However, in light of the resurgence of infections during the third quarter and other circumstances, we revised the assumption to one that the effects would continue for the time being but gradually subside.」
The accounting assumption regarding when the effects of the pandemic would subside was revised, while the method of collecting the latest information and reflecting future prospects in obligor classifications and the calculation of the allowance for loan losses continued. - FY2022-Q2RestatedAnnual report
「We assume that the effects of the spread of COVID-19 will gradually ease toward the end of the current consolidated fiscal year. Although we expect losses such as loan losses to arise for some borrowers as their performance and cash flow deteriorate because the stagnation of economic activity continues, we assess obligor classifications and calculate the allowance for loan losses by collecting the most detailed and up-to-date information available and incorporating future prospects. For some borrowers significantly affected in their business activities, the uncertainty of future prospects is higher. Accordingly, in light of their credit risk, we calculate the allowance for loan losses after making additional necessary adjustments for the expected losses if the possibility of future deterioration in performance is incorporated. This assumption regarding the impact of the spread of COVID-19 is uncertain, and if borrowers' performance deteriorates beyond the assumptions based on the latest available information because of weak personal consumption, stagnant production activity, or other factors, losses such as loan losses exceeding estimated losses may arise. This assumption is unchanged from the end of the previous consolidated fiscal year.」
The assumption that the effects of the pandemic would gradually ease toward the end of the fiscal year, the calculation of the allowance for loan losses reflecting the latest information and future prospects, and the possibility of losses exceeding assumptions were reaffirmed. The assumption was unchanged from the end of the previous fiscal year. - FY2022-Q1RestatedAnnual report
「We assume that the effects of the spread of COVID-19 will gradually ease toward the end of the current consolidated fiscal year. Although we expect losses such as loan losses to arise for some borrowers as their performance and cash flow deteriorate because the stagnation of economic activity continues, we assess obligor classifications and calculate the allowance for loan losses by collecting the most detailed and up-to-date information available and incorporating future prospects. For some borrowers significantly affected in their business activities, the uncertainty of future prospects is higher. Accordingly, in light of their credit risk, we calculate the allowance for loan losses after making additional necessary adjustments for the expected losses if the possibility of future deterioration in performance is incorporated. This assumption regarding the impact of the spread of COVID-19 is uncertain, and if borrowers' performance deteriorates beyond the assumptions based on the latest available information because of weak personal consumption, stagnant production activity, or other factors, losses such as loan losses exceeding estimated losses may arise. This assumption is unchanged from the end of the previous consolidated fiscal year.」
The assumption that the effects of COVID-19 would gradually ease toward the end of the fiscal year, the calculation of the allowance for loan losses reflecting the latest information and future prospects, and the possibility of losses exceeding assumptions were reaffirmed. The assumption was unchanged from the end of the previous fiscal year. - FY2021-Q3Extension of the assumed period for the pandemic's effects to subsideAnnual report
「Although we expect losses such as loan losses to arise for some borrowers as their performance and cash flow deteriorate because the stagnation of economic activity continues, we assess obligor classifications and calculate the allowance for loan losses by collecting the most detailed and up-to-date information available and incorporating future prospects. This assumption is uncertain, and if borrowers' performance deteriorates beyond the assumptions based on the latest available information because of weak personal consumption, stagnant production activity, or other factors, losses such as loan losses exceeding estimated losses may arise.」
After revising the assumption regarding when the pandemic's effects would subside, the company continued to reflect the latest information and future prospects in obligor classifications and the calculation of the allowance for loan losses. The possibility of loan losses exceeding assumptions was also disclosed. - FY2021-Q2First statedAnnual report
「We assume that the spread of COVID-19 will gradually ease toward the end of the current consolidated fiscal year. Accordingly, although we expect losses to arise for some borrowers as their performance and cash flow deteriorate because the stagnation of economic activity continues, we assess obligor classifications and calculate the allowance for loan losses by collecting the most detailed and up-to-date information available and incorporating those future prospects.」
For the first time, the company specifically described its method of assuming that the effects of the pandemic would ease toward the end of the fiscal year and reflecting the latest information and future prospects in obligor classifications and the calculation of the allowance for loan losses.