Change in Revenue-Recognition Methods Following Adoption of the Revenue-Recognition Accounting Standard
First written in FY2022-Q1. 5 of 6 entries say "Advanced", first in FY2022-Q2. Latest entry: FY2024.
The whole theme swung hardest in 2024: 1 of 8 companies on the "Worse" side.
8 other companies' latest entry also says "Advanced".
- FY2024AdvancedAnnual report
「The replacement and installation service for residential equipment includes installation and product warranties. These warranties are identified as performance obligations, and revenue is recognized over the warranty periods.」
The practice of recognizing revenue over the warranty period for warranty services, including the 10-year free warranty, continued to be disclosed as a performance obligation. The ending balance of contract liabilities was ¥205.652 million, and the transaction price allocated to the remaining performance obligations was ¥194.226 million. - FY2023AdvancedAnnual report
「The replacement and installation service for residential equipment includes a 10-year free warranty. The warranty is identified as a performance obligation, and revenue is recognized over the warranty period.」
Following the adoption of the Accounting Standard for Revenue Recognition and related standards, the practice of treating the 10-year free warranty service as a separate performance obligation was disclosed for the full fiscal year. Contract liabilities amounted to ¥124.210 million at the end of the current consolidated fiscal year, and the estimated amount recognized for the warranty service was ¥59.112 million. - FY2022AdvancedAnnual report
「As a result, net sales for the current consolidated fiscal year decreased by ¥80.748 million and cost of sales decreased by ¥64.810 million, while operating profit, ordinary profit and profit before income taxes each decreased by ¥15.938 million. Retained earnings at the beginning of the period also decreased by ¥7.260 million.」
The definitive impact of applying the Accounting Standard for Revenue Recognition and related standards for the full fiscal year on net sales, cost of sales, profit and retained earnings at the beginning of the period was disclosed. - FY2022-Q3AdvancedAnnual report
「As a result, for the cumulative third-quarter consolidated period, net sales decreased by ¥62,794 thousand, cost of sales by ¥49,476 thousand, and operating income, ordinary income and income before income taxes decreased by ¥13,318 thousand each. Retained earnings at the beginning of the period also decreased by ¥7,260 thousand.」
The impact of applying the Accounting Standard for Revenue Recognition and related standards on net sales, profit and retained earnings at the beginning of the period for the cumulative third quarter was specifically disclosed. - FY2022-Q2AdvancedAnnual report
「As a result, for the cumulative second-quarter consolidated period, net sales decreased by ¥43,131 thousand, cost of sales by ¥32,348 thousand, and operating income, ordinary income and income before income taxes decreased by ¥10,783 thousand each. Retained earnings at the beginning of the period also decreased by ¥7,260 thousand.」
The cumulative second-quarter impact of applying the Revenue Recognition Accounting Standard, etc. was specifically disclosed for net sales, income and retained earnings at the beginning of the period. - FY2022-Q1First statedAnnual report
「The Company applied the Accounting Standard for Revenue Recognition (ASBJ Statement No. 29, 31 March 2020, hereinafter the "Revenue Recognition Accounting Standard, etc.") and the Implementation Guidance on Accounting Standard for Revenue Recognition (ASBJ Guidance No. 30, 26 March 2021) from the beginning of the first-quarter accounting period. Accordingly, revenue is recognized when control of the promised goods or services is transferred to the customer, at the amount expected to be received in exchange for those goods or services.」
The Revenue Recognition Accounting Standard, etc. was applied from the beginning of the first-quarter accounting period of FY2022. The main changes were to present extended warranty services for the product component of residential equipment on a net rather than gross basis, recognize installation warranties as performance obligations over the warranty period, and allocate the transaction price by treating the Company's own points as a performance obligation. As a result of the application, for the cumulative first-quarter period, net sales decreased by ¥20,936 thousand, cost of sales by ¥15,879 thousand, operating income, ordinary income and income before income taxes by ¥5,056 thousand each, and retained earnings at the beginning of the period by ¥7,260 thousand.