Estimation Uncertainty in the Provision for Guarantee Performance Due to Changes in Bankruptcy Probabilities
First written in FY2021. 5 of 18 entries say "Worsened", first in FY2025. Latest entry: FY2026.
eGuarantee moved to the "Worse" side of this theme in 2025, 2 years after the typical company in this theme (2023).
The whole theme swung hardest in 2026: 6 of 13 companies on the "Worse" side.
1 other company's latest entry also says "Worsened".
- FY2026WorsenedAnnual report
「Amid geopolitical uncertainty surrounding the situation in the Middle East, the number of companies experiencing deteriorating earnings due to higher raw material costs driving up cost ratios, increased interest expenses from rising interest rates, and higher personnel expenses resulting from wage increases and labor shortages is increasing. As the resulting increase in bankruptcies is expected to continue, we made a reasonable estimate of the provision for guarantee obligations based on the assumption that the number of bankruptcies would continue to increase for approximately 1 year.」
The provision for guarantee obligations was ¥562.733 million, up from ¥413.316 million in the previous fiscal year. The company assumed that the increase in bankruptcies caused by higher prices, rising interest rates, wage increases and labor shortages would continue. - FY2026-H1Interim update to the balance of the provision for guarantee obligationsAnnual report
「Provision for guarantee obligations 494,820」
The provision for guarantee obligations was ¥494.820 million, up from ¥413.316 million at the end of FY2025. - FY2025WorsenedAnnual report
「As the number of companies experiencing deteriorating earnings due to higher raw material costs driving up cost ratios, increased interest expenses from rising interest rates, and higher personnel expenses resulting from wage increases and labor shortages is increasing, the resulting increase in bankruptcies is expected to continue. Therefore, in calculating the provision for guarantee obligations, we made a reasonable estimate based on the assumption that the number of bankruptcies would continue to increase for approximately 1 year.」
The provision for guarantee obligations was ¥413.316 million, up from ¥344.229 million in the previous fiscal year. The company assumed that the increase in bankruptcies caused by higher prices, rising interest rates, wage increases and labor shortages would continue. - FY2025-H1Interim update to the balance of the provision for guarantee obligationsAnnual report
「Provision for guarantee obligations 344,229 371,835」
The provision for guarantee obligations was ¥371.835 million, up from ¥344.229 million at the end of FY2024. - FY2024Annual update to the provision for guarantee obligations and estimation assumptionsAnnual report
「As the zero-zero loans, or effectively interest-free, unsecured loans provided to small and medium-sized enterprises as a COVID-19 measure, have ended, and the number of companies experiencing deteriorating earnings due to higher interest expenses from rising interest rates is increasing, the number of bankruptcies is expected to increase accordingly. Therefore, in calculating the provision for guarantee obligations, we made a reasonable estimate based on the assumption that the number of bankruptcies would continue to increase for approximately 1 year.」
The provision for guarantee obligations was ¥344.229 million, based on the expected increase in bankruptcies following the end of the zero-zero loans and rising interest rates, and the assumption that the number of bankruptcies would increase for approximately 1 year. - FY2024-Q2Quarterly update of the provision for guarantee obligations balanceAnnual report
「Provision for guarantee obligations 436,519 364,173」
The provision for guarantee obligations was ¥364.173 million, down from ¥436.519 million at the end of FY2023. - FY2024-Q1Quarterly update of the provision for guarantee obligations balanceAnnual report
「Provision for guarantee obligations 436,519 395,043」
The provision for guarantee obligations was ¥395.043 million, down from ¥436.519 million at the end of FY2023. - FY2023Update to assumptions used in estimating the provision for guarantee obligationsAnnual report
「As the zero-zero loans, or effectively interest-free, unsecured loans provided to small and medium-sized enterprises as a COVID-19 measure, have ended and the peak in repayment deadlines is approaching, the number of bankruptcies is expected to increase. Accordingly, in calculating the provision for guarantee obligations, we made a reasonable estimate based on the assumption that the number of bankruptcies would increase for approximately 1 year.」
The provision for guarantee obligations was ¥436.519 million, based on the assumption that the number of bankruptcies would increase for approximately 1 year as the zero-zero loans reached their repayment deadlines. - FY2023-Q3Quarterly update of the provision for guarantee obligations balanceAnnual report
「Provision for guarantee obligations 433,856 438,898」
The provision for guarantee obligations was ¥438.898 million. Amid an uncertain environment due to COVID-19 and rising raw material prices, the company continued to estimate the provision based on the assumption that the number of bankruptcies would increase during the fiscal year ending March 2023, with no material changes to the assumptions used at the end of the previous consolidated fiscal year. - FY2023-Q2Quarterly update of the provision for guarantee obligations balanceAnnual report
「Although we operate in an uncertain business environment due to the impact of COVID-19 and rising raw material prices, we have made a reasonable estimate in calculating the provision for guarantee obligations, assuming that the number of bankruptcies would increase during the fiscal year ending March 2023. There have been no material changes to the assumptions used at the end of the previous consolidated fiscal year.」
The provision for guarantee obligations was ¥461.022 million. The company continues to estimate it based on the assumption that the number of bankruptcies would increase during the fiscal year ending March 2023, and states that there have been no material changes to the assumptions since the end of the previous consolidated fiscal year. - FY2023-Q1RestatedAnnual report
「Although we operate in an uncertain business environment due to the impact of COVID-19 and rising raw material prices, we have made a reasonable estimate in calculating the provision for guarantee obligations, assuming that the number of bankruptcies would increase during the fiscal year ending March 2023. There have been no material changes to the assumptions used at the end of the previous consolidated fiscal year.」
The company continues to estimate the provision for guarantee obligations based on the assumption that the number of bankruptcies would increase during the fiscal year ending March 2023, and states that there have been no material changes to the assumptions since the end of the previous consolidated fiscal year. The provision for guarantee obligations was ¥428.431 million. - FY2022Quarterly update of the provision for guarantee obligations balance and estimation assumptionsAnnual report
「In calculating the provision for guarantee obligations, we have made a reasonable estimate based on the assumption that the number of bankruptcies would increase for approximately 1 year.」
The provision for guarantee obligations increased to ¥433.856 million from ¥342.711 million in the previous fiscal year. The estimate is based on the assumption that the number of bankruptcies would increase for approximately 1 year. - FY2022-Q2RestatedAnnual report
「Although we are operating in an uncertain business environment due to significant restrictions on economic activity resulting from the spread of COVID-19, we have made a reasonable estimate in calculating the provision for guarantee obligations, assuming that the number of bankruptcies would increase during the fiscal year ending March 2022. There have been no material changes to the assumptions used at the end of the previous consolidated fiscal year.」
The company continues to estimate the provision for guarantee obligations based on the assumption that the number of bankruptcies will increase, and states that there have been no material changes to the assumptions since the end of the previous consolidated fiscal year. - FY2022-Q1RestatedAnnual report
「Although we are operating in an uncertain business environment due to significant restrictions on economic activity resulting from the spread of COVID-19, we have made a reasonable estimate in calculating the provision for guarantee obligations, assuming that the number of bankruptcies would increase during the fiscal year ending March 2022. There have been no material changes to the assumptions used at the end of the previous consolidated fiscal year.」
The company continues to estimate the provision for guarantee obligations based on the assumption that the number of bankruptcies will increase, and states that there have been no material changes to the assumptions since the end of the previous consolidated fiscal year. - FY2021First statedAnnual report
「The provision for guarantee obligations was ¥342.711 million at the end of the current consolidated fiscal year. Because bankruptcy probabilities are calculated based on historical bankruptcy results according to risk classification, they are subject to uncertainty due to future changes in the economic environment and other factors, which could have a material impact on the expected amount of guarantee obligations to be fulfilled.」
The risk that the bankruptcy probabilities used to calculate the ¥342.711 million provision for guarantee obligations could become uncertain due to future changes in the economic environment was identified for the first time as an independent topic.