国際会計研究学会年報 2010年度

Impact of Impairment Accounting on Company
Behavior ; Questionnaire Research Studies on
Impairment Accounting in 2009YOSHIOKA M asamichi
Tokyo University of Science

TOKUM AE M otonobu
Fukui Prefectural University

ONO Tomohiro
Soka Womenʼ
s College

Abstract
Impairment Accounting Standard has been used by companies in Japan since April 1, 2005. Survey Research Committee
notes that Standard has become widespread in companies,andclariﬁes these operational decisions at the end of ﬁscal year
2009. So Committee has conducted “Questionnaire Survey of
Impairment Accounting in 2009”and come to three conclusions:
1. M anagement decision of companies was largely eﬀected.
2. The existence ofin‑companyguidelines has a large eﬀect
on management decisions. Most companies were prepared for impairment accounting.
3. The period of estimate is the next key concept. Collecting (Q.5) data shows the contrast. Committee thinks
one of main tenets of the guideline is how to estimate
cash ﬂow. Extending the period was not for cushioning
material.

71

Contents⑶ How Committee will test a correlation

Introduction

between “having in‑company guide-

1. Formulate Hypotheses

lines”and “adopted accounting treat-

2. Veriﬁcation Hypotheses

ments?”

Conclusion
Committee has sent its questionnaire to

Introduction

companies belonging to the Japan Industrial M anagement & Accounting Insti-

Since the fall of 2008, the Japanesetute. Date of Survey delivery, collection,

economic environment has been deterior-number of sending companies, number of

ating due to the eﬀect of the declining US

collecting companies are as follows.

economy. Under these conditions, there
are business units that have changes the

Status of the questionnaire

expected amount of prospective business・Date sent : December 3, 2009

plan and interests in Japan. In this reces-・Response deadline: December 16, 2009

sion period, the application of Impair-・Number of companies surveys send to: 530

ment Accounting Standard should give・Number of companies responding : 176

excessive inﬂuence on future net income.

・Rate of response: 33.2%

Companies in Japan have applied・Means of recover: facsimile

Impairment Accounting Standard since＊ This research was conducted with theApril 1, 2005. At the end of ﬁscal year

support of the Japan Industrial Manage-

2009, Standard puts down deep roots,andment & Accounting Institute.

clariﬁes these operational decisions.
Survey Research Committee of the Japan Industrial M anagement & Accounting Institute（cf.Committee）has conducted “Questionnaire Survey of Impairment

1 Formulate Hypotheses
In the analysis, Committee starts withthree research hypotheses.

Accounting in 2009”, focusing on threeresearch areas;

1‑1 First Research Hypothesis⑴ How Committee will test a correlation

The ﬁrst research hypothesis is the cor-

between “having in‑company guide-

relation between “having in‑company

lines” and “impacts on management

guidelines” and “impacts on manage-decision ?”ment decision.” In formulating the ﬁrst

⑵ How Committee will test a correlation

hypothesis, Committee considered thatbetween “adopted accounting treat-

the more serious the impacts, the morements”and “impacts on management

necessary that companies pay suﬃcientdecision ?”attention to dealing with the new stand-72

Impact of Impairment Accounting on Company Behavior

ard. And then, if impairment accounting

Committee considered two points. The

strongly impacts on management deci-ﬁrst, as to the estimated period of futuresions, the company develops in‑company

cash ﬂow,if the companyuses the statuto-

guidelines to appropriately carry out

ry useful life, the guidelines are not

impairment accounting. Therefore, Com-required. Because in using the statutory

mittee hypothesizes there is a correlation

useful life, there is very little that compa-

between “having in‑company guidelines”

ny makes judgments on it. In contrast,asand “impacts on management decisions.”

the estimated period of future cash ﬂow,
if the company uses the economic life, the

1‑2 Second Research Hypothesis

guidelines are required. Because in using

The second research hypothesis is thethe economic life, the company has tocorrelation between “adopted accounting

estimate many computational elements

treatments” and “impacts on manage-

using its own judgment. Therefore, thement decision.” In formulating the sec-

longer the period of future cash ﬂow is

ond hypothesis, Committee consideredestimated, the more in‑company guide-that the high‑performing company tries

lines are required. Because the period is

to recognize short term losses. In con-longer, the estimated factors and judg-

trast, an unproﬁtable company tries toments are increase. Now therefore, Com-put oﬀ recognizing losses.

And then,mittee hypothesizes there is a correlation

there are many estimated factors andbetween “having in‑company guidelines”

judgments in impairment accounting.

and “estimated period of future cash

Therefore, Committee hypothesizes there

ﬂow.”

is a correlation between “adopted accounting treatments” and “impacts on

1‑2 Questionnaire Items

management decision.” In particular,【Figure 1】illustrates the questionnaire

Committee looks at “estimated period of

items.

future cash ﬂow” in accounting treat-broadly separated into six categories.

ments.

Especially, in the analysis, Committee

As shown, thirteen items arepays attention to (Q.5)（Estimated period

1‑3 Third Research Hypothesisof future cash ﬂow）
, (Q.10)（Having in‑

The third research hypothesis is thecompany guidelines）and (Q.13)（Degreecorrelation between “having in‑company
guidelines” and “adopted accounting
treatments.” Committee formulates thethird hypothesis to conﬁrm the ﬁrst andsecond hypotheses.
In formulating this third hypothesis,of the impacts）.
The ﬁrst : Characteristic of companies（Q.1, Q.2, Q.3）
The second : Accounting techniques（Q.4, Q.5, Q.6）
The third : Previous situation（Q.7, Q.
73

【Figure 1：Questionnaire Items】
Characteristic of companies【Q1：Type of industies】【Q2：Sales amount】【Q3：Capital amount】

Accounting techniques【Q4：Cash generating unit grouping】【Q5：Estimated period of future cash ﬂow】
【Q6：Estimated discount rates】

Previous situation
Impairment accounting guidelines【Q 7：Comparison VIU with NRV】
【Q10：In-company guidelines】【Q 8：Recognition of impairment losses】【Q 9：Change in the amount of ﬁxed assets】

Current situation【Q11：Situation in the business management】【Q12：Situation in the accounting practice】

Impacts on management decision【Q13：Degree of the impact】【Table 1: Interviewwith the companies】
Q5: Estimated period of
future cash ﬂow

Q10: In-company
guidelines

Q13: Degree of impacts on
management decision

A company Other (Period of depreciatio) Yes (have)

Not direct impacts

B company

Strong impacts

Other (Period of depreciatio) No (does not have)8, Q.9）the interview with B‑company, it is obvi-

The forth : Impairment accounting
guidelines（Q.10）
The ﬁfth : Current situation（Q.11, Q.
12）

ous that B‑company has in‑company
guidelines.
Second, Impairment Accounting Standard does not make direct impacts on A‑

The last : Impacts on management decision（Q.13）

companyʼs management decision, butmake strong impacts on B‑company. In
the interview with A‑company, the an-

1‑5 Interview

swer comes from the facts that A‑compa-

As part of our research, Committee

ny got out of some unproﬁtable businessconducted interviews with companies

and dispose of nonperforming assets to【Table 1】.

settle the bubble economy. In contrast,in

From the date, Committeeﬁnds the following facts.

the interview with B‑company, the an-First, A‑company has the in‑company

swer comes from the facts that the hugeguidelines, but B‑company does not. In

impairment losses were recognized in re-74

Impact of Impairment Accounting on Company Behavior【Table 2 Cross-collecting (Q.13) and (Q.10)】(Q.10): In-company guidelines
1.Have(Q.13): Impacts on management decision

2.Not have

3.Others

1. Impacts(N＝127）

81.1％

59.3％

66.7％

2. Not impacts(N＝46）

18.9 ％

40.7％

33.3％

cent recession as the fall of Lehman【Table 2】）.

Brotherʼs. B‑company would not dispose

Committee thinks that having impacts

the property to maintain multiple produc-on management lead to having guide-tion lines ifvalue in use（VIU）were muchlines, not vice versa. Committee points

lower than net realizable value（NRV）.

this is characteristic of corporate behavior in Japan ; they prepare for new ac-

2 Veriﬁcation Hypotheses :by Data Collecting
Almost two‑thirds of companies saidcounting standards with serious impacts.
One of such actions is setting in‑company
guidelines.
Committee formulates the ﬁrst hypothe-

they had in‑company guidelines. Com-sis.

mittee thinks having in‑company guide-Hlines is one of Merkmal to be established.

“Whether companies have impacts on

Naturally the in‑company guidelines are

the management decision making is un-

made within the Accounting Regulation.

related to having guidelines.”

Committee found that the company
made in‑company guidelines about a: Null hypothesis

Committee makes an alternative hypothesis to inspect this.

main item to reduce making cost on carry-H

ing out the consolidated accounts. So“The companies with guidelines, theseCommittee analyzes these companies col-guidelines are strongly inﬂuence manage-

lecting cross questions.

ment decision making.”

Committee

predicted most companies had guidelines
because of corporate governance.

: Alternative hypothesis

Committee demanded a coeﬃcient of
the correlation of Pearson.
The coeﬃcient of correlation between

2‑1 Relation between (Q.10)and (Q.13)(Q.10) and (Q.13) is ʻ
0.18.ʼ The level ofOf the replying companies having

signiﬁcance is ʻ
0.02ʼ（cf.【Table 3】）.

guidelines, over 80 percent of them felt

Therefore, the correlation of both tests is

Impairment Accounting Standard im-supported. “In companies having guide-

pacted on management decisions （cf.

lines, management decision making is75

【Table 3 Relation between (Q.10) and (Q.13)】
Pearson χ(Q.10)

Correlation of Pearson(Q.13)
1

The level of signiﬁcance (both sides)

0.177574388
0.019423546

N

175

173

【Table 4 Relation between (Q.13) and (Q.5)】
Pearson χ(Q.5)

Correlation of Pearson(Q.13)
1

The level of signiﬁcance (both sides)−0.117354962
0.20962277

N

116

116

strongly inﬂuenced by them.” In addi-

sion.” As for the inﬂuence on manage-tion, a strong correlation is accepted inment decision making and the length ofboth tests.

the estimate period, the correlation is
accepted.

2‑2 Relation between (Q.13) and (Q.5)
Committee formulates a second hypothesis.
H

2‑3. Relation (Q.10) and (Q.5)
Committee analyzed the relations of: Null hypothesis“The length of the estimate period is

two elements conﬁrmed as a Merkmal.
Committee formulates third hypothesis.

unrelated to the inﬂuence on manage-Hment decision making.”“It is unrelated to the inﬂuence on

Committee makes an alternative hypothesis to inspect this.
H: Alternative hypothesis“The length of the estimate period is: Null hypothesis

management decision making whether acompany has in‑company guidelines.”
Committee makes the next alternative
hypothesis to inspect this.

related to inﬂuence on management deci-Hsion.”“It aﬀects inﬂuence on management

Committee demanded a coeﬃcient ofcorrelation of Pearson.
The coeﬃcient of correlation between(Q5)and (Q10)is ʻ‑0.12.ʼBecause a levelof signiﬁcance is ʻ
0.21,ʼthe correlation ofboth test is supported（cf.【Table 4】）.

: Alternative hypothesis

decision making greatly whether a company has in‑company guidelines.”
Committee demanded a coeﬃcient ofcorrelation of Pearson.
The coeﬃcient of correlation between(Q.5) and (Q10) is ʻ
‑0.14.ʼ The level of“The length of the estimate period issigniﬁcance of the coeﬃcient of correla-related to inﬂuence on management deci-tion wasʻ
0.13ʼ
,and the correlation ofboth76Impact of Impairment Accounting on Company Behavior【Table 5 Relation between (Q.10) and (Q.5)】(Q.10): In-company guidelines
1.Have(Q.5): Period of estimate

2.Not have

Under 3 years

1

2

Almost 3 years

43

Almost 5 years

10

14

Almost 7 years

92

Almost 10 years

118Over 10 years

32

17

Others (Most replied economic life)

44

13【Table 6 Relation between (Q.5) and (Q.10)】
Pearson χ
Correlation of Pearson(Q.5)(Q.10)
1−0.144698268

The level of signiﬁcance (both sides)
N

0.126234512
116

113

test was supported（cf.【Table 6】）. “Theare not cushioning material. As a result,length of the estimate period is related tocompanies choose proper period and theinﬂuence on management decision.”

period was extend. Committee conﬁrmed

The companies do not apply statutory

this action in interviews.

useful life mechanically, and they uses
substantial economic useful life, Committee predicted. The companies conduct an

2‑5. Impairment Accounting Firmly Establish in Practiceinvestigation into individual operation

Committee points out an interesting

assets on applying impairment account-ﬁnding in cross-responses to question (Q.

ing, then review it and make prepara-9)and (Q.12)（cf.【Table 8】）. Committee

tions.

The adequacy of the estimate

asks rate of change for ﬁxed assets in (Q.

period is greatly related to in‑company

9). Companies which choose choice‑5 inguidelines.

(Q.12) think impairment accounting is
ﬁrmly established in practice. Their rate

2‑4. Impacts on Management Decisionfor (Q.9)is ʻ
87.16.ʼ

One group (Q.13) and the other (Q.5)

They probably reviewed assets to hold.

are equally matched in “almost 7 years”

They sold unnecessary assets and aboli-（cf.【Table 7】）. Immediately, extending

shed any new business plan that did not

the estimate period may reduce impacts.

have high proﬁtability.

But Committee does not think so. Theyeﬀected the rates were not in impairment

All factors

77

【Table 7 Cross-collecting (Q.5) and Q.13)】(Q.13): Eﬀect on management decision
Eﬀect(Q.5): Term (period)of estimate

No eﬀect

Under 3 years

0.8％

4.3％

Almost 3 years

3.1％

6.5％

Almost 5 years

12.6％

19.6％

Almost 7 years

6.3％

6.5％

Almost 10 years

12.6％

8.7％

Over 10 years

31.5％

21.7％

Others

33.1％

32.6％

【Table 8 Cross-collecting (Q.12) and (Q.9 )】Average on (Q.9)(Q.12‑4): Not familiar with new procedure

106.14(Q.12‑5): Firmly establish in practice

87.16(Q.12‑6): Not want to believe the cost without payment

100.50accounting.

counting.
3. The period of estimate is the next
key concept. Responses to (Q.5)

Conclusionshows the contrast.

Committee

As stated above, Committee has

thinks one of main points of guide-

examined how Impairment Accounting

line is how to estimate cash ﬂows.

Standard has become part of in account-

Extending the period was not foring practices within the company. Whencushioning material.

Committee planned “Questionnaire Studyof Impairment Accounting in 2009”, it set
up the three hypotheses. It has analyzed

They have reviewed some points ofassets.

aggregated survey data based on these

They chose substantial economical use-hypotheses, and concluded the following.

ful life automatically,not statutory usefullife.

1. M anagement decision of companies

Under results of company data analy-

had large impacts on some eﬀorts.

sis, such as the application of impairment

2. Having in‑company guidelines andaccounting has given to decision making

impacts on management decisionof companies, they have reviewed busi-

are strongly related. Most compa-

ness investments. The following can was

nies prepare for impairment ac-

revealed from the ex‑post hearing. Com-78

Impact of Impairment Accounting on Company Behavior

panies develop guidelines for Impairment

the Japan Industrial M anagement &Accounting Standard by incorporating

Accounting Institute（March, 2009）.

business and business climate, compa-⑹ TOKUMAE Motonobu, ʻQuestionnaire

nies. The accountants could create ac-

Survey about Impairment Accounting ;counting treatments according to theEﬀects of Applying and Proactiveʼ
,guidelines.

“Industrial M anagement & Accounting”Vol.65 No.4, pp.106‑118, the Ja-

References :pan Industrial M anagement & Account-⑴ YOSHIOKA Masamichi, “Fixed Assets

ing Institute（January, 2006）.

Evaluation Theory”Moriyama Shoten⑺ YOSHIOKA M asamichi=TOKUM AE（August, 2010）.

Motonobu=CHIBA Keiji=SUGIYAMA⑵ UJIHARA

Shigeki =T OKUM AE

Akiko, “Countermeasures of Compa-

M otonobu =YOSHIOKA M asamichi,

nies to New Accounting Standards;“Accounting

Awareness and Actions in Introduction

Theory”, M oriyama

Shoten（July, 2010）.
⑶ YOSHIOKA M asamichi=TOKUMAE
Motonobu =ONO Tomohiro, Stability

Period”, Survey Research Series II, theJapan Industrial Management & Accounting Institute（June, 2005）.

of Impairment Accounting Standard ;⑻ YOSHIOKA M asamichi=TOKUM AE

Questionnaire Survey about Impair-Motonobu=CHIBA Keiji=SUGIYAMA

ment Accounting in 2009ʼ
, “Industrial

Akiko,

Management & Accounting” Vol.70

Impairment Accounting ; Survey of

No.1, the Japan Industrial M anage-

Implementation

ment & Accounting Institute（April,

introducing Impairment Accountingʼ,2010）.

“Industrial M anagement & Account-

Questionnaire Survey about
Com paniesin⑷ YOSHIOKA M asamichi=SUGIYAM A

ing”Vol.64 No.4, pp.122‑133, the Ja-

Akiko, “Bookkeeping System Theory”,

pan Industrial M anagement & Account-

Tax Accounting Association（Novem-

ing Institute（January, 2005）.

ber, 2009）⑼ TOKUMAE Motonobu , ʻDisclosure⑸ YOSHIOKA M asamichi=TOKUMAE

Case Analysis of Impairment Account-

Motonobu =SUGIYAMA Akiko, “Evo-ing for Fixed Assets Early Application

lution of Tax Eﬀect Accounting Appli-Companiesʼ
, “Industrial Management

cations（2002〜2008） ; Practice Status& Accounting”Vol.64 No.3, the Japan

from Introduction Period, and M aturi-

Industrial Management & Accounting

ty Period”, Survey Research Series III,Institute（October, 2004）.

79Questionnaire and Collected Results
Q.1: Which type of industryis your companya part of?
1. Fishery, Agriculture
and Forestry

2. Mining0

3. Construction

2

5. Textile and Apparels

6. Pulp and Paper

2

1

9. Rubber Products

10. Glass and Ceramics
Products

04

13. M etal Products

12
7. Chemicals
11. Iron and Steel

16. Transportation
Equipments

15

5

19. W holesale andRetail Trade

20. Financing Businessand Insurance

7

28

3
24. Air Transportation
1

22. Land Transportation

6

2

3

25. W arehouse andHarbor Transportation

26. Information andCommunication

27. Electric Powerand Gas7

3

2

29. No answer
1

12. Nonferrous Metal

15. Electric Appliances

23. Marine Transportation

21. Real Estate33

18. Other Products

4

8. Oil and Coal Products

28

3

17. Precision Instruments

133

14. M achinery2

4. Food

28. Service
13

Total
176

Q.2: What is your companyʼ
s sales volume?（Individual)
Number of Companies
Large

Over 300,000 million yen

55

Middle50,00069

Small

Under 50,000 million yen

300,000 million yen

50

No answer

2

Total

176

Q.3: Which is the capitalization of your company?（Individual)
Number of Companies
Large

Over 300,000 million yen

54

Middle50,000〜300,000 million yen

69

Small

Under 50,000 million yen

53

Total

80

176

Impact of Impairment Accounting on Company Behavior

Q.4: Which bases are considered,when assets are grouped for the cash generating unit?（Multiple answers
allowed)1. Factory

2. Operation

3. Product4. Region

26

112

10

26

5. Others

6. No answer

Total

14

1

189

Q.5: Which estimated period is used to measure value in use?
Under 3 years

3

Almost 3 years

7

Almost 5 years

25

Almost 7 years

11

Almost 10 years

20

Over 10 years

50

Others

59

Total

176

Q.6: Which basis is considered to estimate discount rates in measuring value in use?
1. Peculiar risk

14

2. Capital cost95

3. Market average interest rate37

4. Interest rate of the nonrecourse loan

15. Additional interest rate3

6. Others24

7. No answer

2

Total

176

Q.7: Which was higher during the last ﬁ
sical year, value in use (VIU) or net realizable value (NRV)?
1. VIU was higher than NRV

56

2. NRV was higher than VIU

32

3. Equal

18

4. Not calculating recoverable amount43

5. Other

22

No answer
Total

5
176

81

Q.8: Has your companyrecognized the impairment loss?（Multiple answers allowed)
1. No sign17

2. Not recognized the loss

26

3. Recognized the loss on idle properties

117

4. Recognized the loss on investment properties

17

5. Recognized the loss on operation properties70

6. Others

6

7. No answer

1

Total

254

Q.9 : After the introduction of impairment accounting,which change in the amount of ﬁ
xed asset does yourcompanyfall under?
1. Large increase7

2. Increase37

3. No change

28

4. Decrease78

5. Large decrease7

6. No answer

19

Total

176

Q.10: Are there anyimpairment accounting guidelines in your company?
1. Yes

111

2. No

59

3. Other5

4. No answer

1

Total

176

Q.11: In the recent business management, what does your companyuse the impairment accounting for?
（Multiple answers allowed.)
1. For the review of the management plan53

2. For the provision of useful information to investors

22

3. For the review of the purpose and the degree of use ﬁxed assets

68

4. For the consideration of the choice and concentration of the business38

5. For the slimming of the balance sheet including a lease transaction,
securitization or the sale13

6. For the consideration to sales unutilized assets and close unproﬁtable sections

5

7. For the review of the capital cost and a rate of operation

22

8. Other23

9. No answer

2

Total

292

82

Impact of Impairment Accounting on Company Behavior

Q.12: Regarding the application ofthe impairment accounting,which recent situation does your companyfall
under?（Multiple answers allowed)
1. Having better contact with subsidiaries

57

2. Increasing burden from the work of contact with and support subsidiaries

44

3. Increasing burden from the accounting practice, so need to reduce it

50

4. Not being familiar with technique of the impairment accounting yet

36

5. Establishing the technique of the impairment accounting

74

6. Not realizing the recognition of impairment loss without payment

10

7. Other11

8. No answer

2

Total

284

Q.13: What kind of impact does impairment accounting have an impact on your management decision
making ?
1. Strong impact

17

2. Some impact

110

3. Not much impact

41

4. No impact

5

5. Other2

6. No answer

1

Total

176

83