Menicon Co., Ltd.
(Disclosure Progress) “Notice Regarding Acquisition of Shares of Itabashi Trading Co., Ltd. (Subsidiarization)” About Earnout Consideration and Accounting Treatment for Share Acquisition of Itabashi Trading Co., Ltd.
The accounting treatment of the earnout consideration related to the acquisition of shares of Itabashi Trading Co., Ltd. has changed from special loss to selling, general and administrative expenses, with a maximum of 500 million yen scheduled to be recorded in the fiscal year ending March 2026.
Key Figures
- Up to 500 million yen: Earnout consideration amortization amount scheduled to be recorded as selling, general and administrative expenses in the fiscal year ending March 2026
- Up to 3,520 million yen: Originally planned goodwill amortization recorded as special loss in the fiscal year ending March 2027 (before change)
- 5 years: Amortization period corresponding to the elapsed time from share acquisition to the present
AI要約
Overview of M&A and Change in Accounting Treatment
Due to the change in payment conditions of the earnout consideration for the share acquisition of Itabashi Trading Co., Ltd. announced on February 22, 2023, the Company originally planned to record a maximum goodwill amortization of 3,520 million yen as a special loss in the fiscal year ending March 2027 on a lump-sum basis. However, after a reexamination by EY ShinNihon LLC, it was determined that it is appropriate to record this not as a special loss but under selling, general and administrative expenses. Therefore, the Company changed its policy to record amortization for the past five years as selling, general and administrative expenses in the fiscal year ending March 2026. The amount to be recorded is expected to be up to 500 million yen.
Impact on Business Performance and Future Measures
This matter is expected to affect profit stages below operating income for the current term, but at this time, performance is expected to remain at the level of the consolidated earnings forecast initially published, and no revision of the earnings forecast will be made. Should any disclosures be required in the future, they will be promptly announced.
