Recognition of an allowance for doubtful accounts based on expected losses
First written in FY2021-Q2. 10 of 12 entries say "Advanced", first in FY2022-Q2. Latest entry: FY2025.
The whole theme swung hardest in 2019: 1 of 8 companies on the "Worse" side.
1 other company's latest entry also says "Mitigated".
- FY2025MitigatedAnnual report
「During the current consolidated fiscal year, we determined that the increase in credit risk had subsided and discontinued the additional recognition of this allowance for loan losses. This change reduced the allowance for loan losses by ¥956 million.」
We discontinued precautionary additional provisions for lodging and other sectors, resulting in a ¥956 million decrease in the allowance for loan losses. - FY2024AdvancedAnnual report
「For receivables from normal borrowers, we recognize allowances based on expected loss rates over the next 1 year. For receivables from borrowers requiring attention that are classified as borrowers requiring management, we recognize allowances based on expected loss rates over the next 3 years, while for receivables from other borrowers requiring attention, we use expected loss rates over the next 1 year.」
We specifically disclosed the allowance method based on expected loss rates and the estimated periods of 1 year and 3 years by borrower classification. We also made an additional provision of ¥891 million for lodging and other sectors. - FY2024-Q2AdvancedAnnual report
「Treating the borrowers as having been downgraded in terms of borrower classification, the Bank made the necessary adjustments to the historical loss rate and recognized an additional ¥802 million allowance for loan losses.」
We continued to apply the precautionary provisioning method, which revises expected loss rates and historical loss rates, and made an additional provision of ¥820 million during the interim period. - FY2024-Q1AdvancedAnnual report
「We recognized an additional allowance for loan losses of ¥661 million by treating the borrower's classification as having been downgraded and making the necessary adjustment to the historical loss rate.」
We continued to apply the precautionary provisioning method, which revises expected loss rates and historical loss rates, to certain sectors, including lodging, affected by the infectious disease, and made an additional provision of ¥661 million. - FY2023AdvancedAnnual report
「We recognized an additional allowance for loan losses of ¥678 million by treating the borrower's classification as having been downgraded and making the necessary adjustment to the historical loss rate.」
We continued to apply the precautionary provisioning method, which revises expected loss rates and historical loss rates, to lodging and other sectors affected by the infectious disease. - FY2023-Q3AdvancedAnnual report
「We recognized an additional allowance for loan losses of ¥602 million by treating the borrower's classification as having been downgraded and making the necessary adjustment to the historical loss rate.」
We applied the precautionary provisioning method, which revises expected loss rates and historical loss rates, to certain sectors, including lodging, affected by the infectious disease and made an additional provision. - FY2023-Q2AdvancedAnnual report
「During the current interim consolidated accounting period, we determined that credit risk had increased for borrowers in certain sectors, including lodging, that were deemed to have been significantly affected by the spread of COVID-19. Treating the borrower classifications as having been downgraded, we made the necessary adjustment to the historical loss rate and recognized an additional allowance for loan losses of ¥606 million.」
We applied the precautionary provisioning method, which revises expected loss rates and historical loss rates, to certain sectors, including lodging, affected by the infectious disease and made an additional provision of ¥660 million. - FY2023-Q1AdvancedAnnual report
「We recognized an additional allowance for loan losses of ¥686 million by treating the borrower's classification as having been downgraded and making the necessary adjustment to the historical loss rate.」
We applied the precautionary provisioning method, which revises expected loss rates and historical loss rates, to borrowers in lodging and other sectors affected by the infectious disease and made an additional provision. - FY2022AdvancedAnnual report
「As a result, the allowance for loan losses at the end of the current consolidated fiscal year increased by ¥671 million, while ordinary income and income before income taxes and other adjustments for the current consolidated fiscal year decreased by ¥671 million.」
We applied the precautionary provisioning method, which revises expected loss rates, to an additional provision for lodging and other sectors affected by the infectious disease. - FY2022-Q3AdvancedAnnual report
「We revised the expected loss rate for loans and other receivables to the relevant borrower and recognized an additional allowance for loan losses.」
We applied the previously disclosed change in the calculation of precautionary allowances for loan losses as a revision of expected loss rates and an additional provision for borrowers in lodging and other sectors affected by the infectious disease. - FY2022-Q2AdvancedAnnual report
「Ordinary income decreased by ¥1,865 million from the cumulative second quarter of the previous consolidated fiscal year, mainly due to a decrease in gains on sales of Japanese government bonds and other securities, to ¥20,119 million. Ordinary expenses increased because credit-related expenses rose as a result of partially changing the method for calculating the allowance for loan losses to increase precautionary provisions.」
We partially changed the method for calculating the allowance for loan losses and adopted an approach that increased precautionary provisions. This was also related to an additional provision of ¥649 million for certain sectors. - FY2021-Q2First statedAnnual report
「For receivables equivalent to those classified under the Practical Guidelines on Auditing the Self-Assessment of Assets by Banks and Other Financial Institutions and the Audit of Write-Offs and Allowances for Loan Losses (Report No. 4 of the Special Committee on Audits of Banks and Other Financial Institutions, Japanese Institute of Certified Public Accountants, 8 October 2020) as loans to normal borrowers and borrowers requiring attention, receivables are classified by type and generally recognized based on expected losses over the next 1 year or 3 years. Expected losses are calculated by determining a loss rate based on the average of historical loss rates and other measures over the past 3 calculation periods, using loan losses over 1 year or 3 years as the basis, and incorporating the difference when the loss rate based on an average over a specified past period, adjusted for economic cycles and other factors, is higher as a necessary adjustment for future outlooks and other considerations.」
For loans to normal borrowers and borrowers requiring attention, we explicitly described the method of recognizing the allowance for loan losses based on expected losses derived from historical loss rates and other data, adjusted for the future outlook and economic cycles.