Business deterioration and goodwill impairment risk arising from M&A transactions
First written in FY2018. 2 of 4 entries say "Materialised", first in FY2020-Q3. Latest entry: FY2020.
Kowa moved to the "Worse" side of this theme in 2020, 4 years before the typical company in this theme (2024).
The whole theme swung hardest in 2023: 35 of 97 companies on the "Worse" side.
54 other companies' latest entry also says "Materialised".
- FY2020MaterialisedAnnual report
「Based on an assessment of progress against 株式会社幸和ライフゼーション's business plan and its future performance outlook, the full unamortised balance of goodwill of ¥106,765 thousand recognised upon the acquisition of its shares was recorded as an impairment loss under extraordinary losses.」
The goodwill impairment risk associated with M&A has materialised as the impairment of the full ¥106,765 thousand of goodwill recognised upon the acquisition of 幸和ライフゼーション. - FY2020-Q3MaterialisedAnnual report
「Based on an assessment of progress against the company's business plan and its future performance outlook, the full unamortised balance of goodwill of ¥106,765 thousand recognised upon the acquisition of the company's shares was recorded as an impairment loss under extraordinary losses during the nine-month period of the current fiscal year」
The full ¥106 million of goodwill recognised upon the acquisition of the care services business through M&A has been impaired. - FY2019MitigatedAnnual report
「In conducting M&A, we seek to reduce various risks by conducting due diligence on the target company's financial condition, contractual arrangements and other matters, including obtaining advice from external professionals such as certified public accountants and attorneys, as a prerequisite.」
The company continues to disclose the risks of business deterioration and goodwill impairment associated with M&A, and has added risk-reduction measures involving due diligence by external professionals. - FY2018First statedAnnual report
「We consider M&A one of the options for business expansion, with the aim of accelerating growth through expansion into broader business areas and early entry into new business fields. However, business expansion through M&A may result in deteriorating performance, goodwill amortisation and impairment losses due to the occurrence of unexpected business risks and other factors.」
The company identifies the risks of business deterioration, goodwill amortisation and impairment that remain after due diligence, while considering M&A as an option for growth.