Impairment and Deferred Tax Asset Risks Based on Assumed Recovery in Sports Club Membership
First written in FY2021. 4 of 11 entries say "Mitigated", first in FY2024-Q2. Latest entry: FY2026.
The whole theme swung hardest in 2026: 5 of 22 companies on the "Worse" side.
- FY2026MitigatedAnnual report
「In addition to the effects of the membership fee revisions implemented in the previous fiscal year, strengthening the school business by leveraging existing facilities supported an improvement in earnings. As a result, we secured an operating profit for the first time in 6 fiscal years.」
Membership fee revisions, reinforcement of the school business and the closure of unprofitable stores substantially mitigated the loss risk in the sports club business as it moved into operating profitability. - FY2025-H1MitigatedAnnual report
「Operating revenue in the sports club business was ¥5,167 million, up 5.5% year on year, and the operating loss was ¥223 million, compared with an operating loss of ¥386 million in the same period of the previous year.」
Membership increased and the operating loss narrowed as a result of revising membership categories, introducing 90-minute memberships and AI machines, and undertaking swimming-school operations on a contract basis. - FY2024-Q3MitigatedAnnual report
「Operating revenue in the sports club business was ¥7,401 million, up 3.1% year on year, and the operating loss was ¥553 million, compared with ¥723 million in the same period of the previous year. Although the cost of sales, including personnel and advertising expenses, increased, membership rose, particularly among younger customers, as a result of initiatives to attract members, including expanding weekend and holiday access for night members and opening new swimming schools and athletic ability development academies. This resulted in higher revenue and a narrower operating loss.」
Membership increased as a result of member-acquisition initiatives, narrowing the operating loss from ¥723 million to ¥553 million. The business remained loss-making, but the risk related to membership recovery was partly mitigated. - FY2024-Q2MitigatedAnnual report
「In this business, revenue increased as membership, the source of revenue, grew due to longer operating hours at some stores, a review of membership categories, and greater specialization, including stronger swimming and tennis school operations. The operating loss narrowed.」
The operating loss narrowed from ¥448 million in the same period of the previous year to ¥386 million as membership increased. The loss risk related to the recovery assumptions for the sports club business was partly mitigated, but the business remained loss-making. - FY2024-Q1WorsenedAnnual report
「Operating revenue in the sports club business was ¥2,371 million, down 3.1% year on year, and the operating loss was ¥290 million, compared with an operating loss of ¥225 million in the same quarter of the previous year.」
The operating loss in the sports club business widened from ¥225 million in the same period of the previous year to ¥290 million. Although membership increased, the business continued to be unable to absorb personnel and facility costs and other expenses. - FY2023MaterialisedAnnual report
「The impairment loss on property, plant and equipment at stores amounted to ¥3,192 million for the sports club business.」
An impairment loss of approximately ¥3.2 billion on property, plant and equipment in the sports club business was actually recognized, a substantial increase from ¥324 million in the previous fiscal year. - FY2023-Q1RestatedAnnual report
「There were no significant changes to the assumptions concerning the impact of the spread of COVID-19 described in the previous fiscal year's annual securities report under “Section 5: Financial Information, 1. Consolidated Financial Statements, (1) Consolidated Financial Statements, Notes (Significant Accounting Estimates), 2. Impairment of Property, Plant and Equipment at Stores in the Sports Club Business.”」
No significant changes were made to the assumptions regarding the impact of COVID-19 used in assessing impairment of property, plant and equipment in the sports club business. - FY2022-Q3RestatedAnnual report
「There were no significant changes to the assumptions concerning the impact of the spread of COVID-19 described in the “Additional Information: Accounting Estimates Regarding the Impact of the Spread of COVID-19” section of the quarterly report for the second quarter of the current consolidated fiscal year.」
No significant changes were made to the assumptions regarding the impact of the pandemic used to assess impairment in the sports club business and the recoverability of deferred tax assets. - FY2022-Q2WorsenedAnnual report
「However, in light of the re-emergence of COVID-19 and the reissuance of a state of emergency during the second quarter of the current consolidated fiscal year, the key assumptions regarding expected membership at each store and in the sports club business were changed. The revised assumption is that, although the impact of the spread of COVID-19 would continue through the end of the fiscal year ending March 2022, membership would gradually begin to recover and reach approximately 80% to 90% of the pre-pandemic level by around autumn 2023. The calculations are based on these revised assumptions.」
In light of the resurgence of COVID-19 and the reissuance of a state of emergency, the assumed timing of the recovery in membership was pushed back from around summer 2022 to around autumn 2023, and the recovery assumptions were revised. - FY2022-Q1RestatedAnnual report
「There were no significant changes during the cumulative first quarter of the current consolidated fiscal year to the assumptions concerning the impact of the spread of COVID-19 described in the previous fiscal year's annual securities report under “Section 5: Financial Information, 1. Consolidated Financial Statements, (1) Consolidated Financial Statements, Notes (Significant Accounting Estimates), 2. Impairment of Property, Plant and Equipment at Stores in the Sports Club Business and 3. Recoverability of Deferred Tax Assets Related to the Sports Club Business.”」
No significant changes were made to the assumptions regarding the resolution of the pandemic and recovery in membership used to assess impairment in the sports club business and the recoverability of deferred tax assets. - FY2021First statedAnnual report
「This was calculated based on the assumption that, from July 2021 onward, the impact of the spread of COVID-19 would gradually begin to recover, reaching approximately 80% to 90% of the pre-pandemic level by summer 2022.」
In the sports club business, impairment of property, plant and equipment and the recoverability of deferred tax assets were assessed using an assumption of a recovery in membership. An operating loss of ¥1,933 million, an impairment loss of ¥410 million and net deferred tax assets of ¥1,901 million were reported, with the resolution of the pandemic and changes in membership identified as factors that could affect future earnings and asset valuations.