Product Obsolescence and Inventory Write-Down Risk
First written in FY2020. 3 of 6 entries say "Worsened", first in FY2025-H1. Latest entry: FY2026.
The whole theme swung hardest in 2022: 13 of 37 companies on the "Worse" side.
16 other companies' latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「Merchandise is valued based on estimated orders expected to be placed according to customers' production plans. If customers change or cancel their production plans, valuation losses on merchandise may be recorded and could have a material impact on the consolidated financial statements.」
The merchandise balance increased from ¥19.750 billion in the previous fiscal year to ¥20.966 billion, while merchandise valuation losses increased from ¥50 million to ¥56 million. The Inventory Committee continues to manage appropriate inventory levels and slow-moving inventory. - FY2025-H1WorsenedAnnual report
「Merchandise 22,927 24,317」
The merchandise balance increased from ¥22.927 billion at the end of the previous fiscal year to ¥24.317 billion at the end of the interim consolidated accounting period. Exposure to inventory obsolescence and valuation-loss risk has increased, but no merchandise valuation loss for the interim period was disclosed. - FY2024MitigatedAnnual report
「Merchandise valuation losses 129 93」
Merchandise valuation losses declined from ¥129 million in the previous fiscal year to ¥93 million, while the merchandise balance declined from ¥25.002 billion to ¥22.927 billion. The risk of inventory obsolescence remains, but its impact on results for the fiscal year has diminished. - FY2020First statedAnnual report
「Changes to or cancellation of customers' production plans may cause the inventory to become obsolete and result in valuation losses on merchandise, potentially having a significant impact on profit. Inventory valuation losses arising from lower profitability are included in cost of sales. ¥136 million」
The risk of obsolescence associated with holding inventory at a certain level was described for the first time as a standalone major risk. Merchandise valuation losses of ¥136 million were included in cost of sales for the fiscal year, indicating that the risk had materialised.