Risk of Impairment from Failure to Meet the Business Plan and of Share Acquisition Costs Following an M&A Transaction
First written in FY2024. 1 of 4 entries say "Materialised", first in 2026-06-05. Latest entry: FY2026.
The whole theme swung hardest in 2024: 36 of 89 companies on the "Worse" side.
- FY2026WorsenedAnnual report
「At the end of the current consolidated fiscal year, the asset group of 中央紙器工業株式会社 was determined to show indications of impairment, given the divergence between its actual performance and the business plan prepared at the time of the acquisition. … The Company determined that recognition of an impairment loss was not necessary.」
For 中央紙器工業 after the M&A, indications of impairment were identified due to the divergence from the business plan, but no impairment loss was recognized because future cash flows exceeded the carrying amount. - 2026-06-05MaterialisedGeneral Meetings of Shareholders
「Revenue and operating profit both fell short of the initial plan due to the impact of one-time expenses associated with M&A.」
One-time expenses associated with M&A were cited as a factor behind the shortfall against the full-year plan. - FY2026-H1Amortization and initial costs incurred after an acquisitionAnnual report
「Operating income was ¥10,772 million, down 6.6% year on year. Although higher revenue had a positive effect, the result reflected amortization of goodwill and intangible assets arising from M&A and the recognition of initial costs when 中央紙器工業㈱ became a consolidated subsidiary.」
Amortization of goodwill and intangible assets after M&A and initial costs incurred when a subsidiary was established actually reduced operating income. Separately from the risk of failing to achieve the business plan after an acquisition and impairment risk, the cost burden after the acquisition has materialized. - FY2024First statedAnnual report
「The Group considers M&A one of its options for expanding its business areas and acquiring or enhancing necessary functions. In carrying out M&A, it conducts due diligence on the target company's financial condition, contractual relationships and other matters, and makes decisions after carefully examining the appropriateness of the acquisition price and related risks. However, if business plans fail to progress as initially expected due to changes in the business environment or competitive conditions after the acquisition, impairment of the acquisition cost of the target company's shares or goodwill may arise, potentially affecting the Group's operating results and financial position.」
While positioning M&A as an option for expanding business areas and functions, the Company newly identified failure to achieve business plans after an acquisition and impairment of share acquisition costs and goodwill as risks.