Risk of inventory write-downs due to declining merchandise profitability
First written in FY2022. 2 of 7 entries say "Restated". Latest entry: FY2026.
Sun-Wa Technos moved to the "Worse" side of this theme in 2024, 1 year after the typical company in this theme (2023).
The whole theme swung hardest in 2018: 3 of 7 companies on the "Worse" side.
11 other companies' latest entry also says "Mitigated".
- FY2026MitigatedAnnual report
「In light of the strengthened inventory management methods used by the Group and the accumulation of data over a sufficient period to ascertain the actual sales and disposal of inventory based on past periods of stagnation in inventory, it became possible at the end of the consolidated fiscal year to obtain a more detailed understanding of the actual situation. Accordingly, for merchandise included in inventories, the Group newly established valuation rates based on the period of inventory stagnation at the end of the consolidated fiscal year and valued stagnant inventory based on these new rates. As a result of this change, cost of sales for the consolidated fiscal year decreased by ¥77 million compared with the previous method.」
Following the accumulation of inventory management data, new valuation rates based on the period of inventory stagnation were established. The change in valuation method reduced cost of sales by ¥77 million. - 2026-06-05AdvancedGeneral Meetings of Shareholders
「当連結会計年度末において新たに滞留状況に応じた評価率を設定し、この新しい評価率に基づき、滞留在庫に対する評価を行っております。この変更により、従来の方法と比べて、当連結会計年度の売上原価は77百万円減少し、営業利益、経常利益及び税金等調整前当期純利益が同額増加しております。」
滞留在庫の評価について、評価率を新たに設定する見積り方法の変更と、その損益影響を具体的に記載している。 - FY2025WorsenedAnnual report
「Merchandise is measured in accordance with the Accounting Standard for the Valuation of Inventories, using the cost method, under which carrying amounts are written down when profitability declines. The saleability of merchandise that has remained in inventory beyond a specified period is assessed by considering various factors considered reasonable based on information available at the measurement date, and valuation losses are estimated and recognized for items that do not meet prescribed conditions by methods including reducing their carrying amounts to estimated disposal values.」
The merchandise balance decreased from ¥17.417 billion to ¥12.953 billion, while the inventory valuation loss increased from ¥152 million in the previous fiscal year to ¥206 million in the current fiscal year. The risk of declining profitability and valuation losses continues. - FY2024MaterialisedAnnual report
「As the recent supply-demand tightness has eased, order adjustments due to excess customer inventories continued and demand remained sluggish. Ending inventories are stated at amounts after write-downs of carrying value due to declining profitability, and the inventory valuation loss for the current consolidated fiscal year was ¥152 million.」
Order adjustments due to excess customer inventories actually continued, and an inventory valuation loss of ¥152 million was recognized, indicating that declining merchandise profitability and inventory stagnation risk have emerged in business performance and accounting. - FY2023-Q2RestatedAnnual report
「There have been no material changes to the accounting estimates and the assumptions used in those estimates described under “Management's Analysis of Financial Position, Operating Results and Cash Flows” in the securities report for the previous fiscal year.」
It is stated that there have been no material changes in accounting estimates or assumptions, and the previous assumptions regarding inventory valuation for merchandise whose profitability has declined have been maintained. - FY2023-Q1RestatedAnnual report
「There have been no material changes to the accounting estimates and the assumptions used in those estimates described under “Management's Analysis of Financial Position, Operating Results and Cash Flows” in the securities report for the previous fiscal year.」
It is stated that there have been no material changes in accounting estimates or their assumptions, and the previous assumptions regarding inventory valuation for merchandise whose profitability has declined have also remained unchanged. - FY2022First statedAnnual report
「The Group measures merchandise in accordance with the Accounting Standard for the Valuation of Inventories and uses the cost method, under which carrying amounts are written down when profitability declines. It assesses the saleability of merchandise that has remained in inventory beyond a specified period, taking into account various factors considered reasonable based on information available at the measurement date, and estimates and recognizes valuation losses for items that do not meet prescribed conditions by methods including reducing their carrying amounts to estimated disposal values. Changes in the business environment or customers' production plans could affect the Group's operating income or loss.」
The potential impact of inventory valuation losses and operating income or loss arising from merchandise stagnation, saleability, and changes in the business environment or customers' production plans is disclosed independently for the first time as a major risk.