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EDINET 8798 Negative Risk Analyzed

Advance Create Co.,Ltd.

Extraordinary Report / 2026-11-13 16:49

Covers EDINET statutory filings (TDNET timely disclosures / earnings flashes are not included).

GovernanceImpairment
AI Summary 2026-11-13 17:14

Subsidiary Hoken-Ichiba identified improper accounting treatments in past-year advertising transactions and software asset capitalization. Third-party committee investigation completed, prior-year financial statements corrected. Special loss of ¥871M recognized including investigation costs and impairment.

KEY POINTS
  • Improper accounting treatments discovered in wholly-owned subsidiary Hoken-Ichiba; third-party committee investigation conducted
  • Prior-year financial statements corrected; special loss of ¥871M recorded including investigation costs ¥449.7M and impairment loss ¥240.8M
  • Material impact on financial position, operating results, and cash flow; interim report filed in compliance with Financial Instruments Exchange Act
📊 Revenue
N/A
💰 Operating profit
N/A
🔮 Outlook
Not stated
Risk and growth scores and tags are AI-generated estimates from analyzing the disclosure. They are not guarantees of fact, nor investment advice or recommendations. Make investment decisions at your own discretion.
⚠️ Extracted Risk Factors
CategoryDescriptionScoreNew
Compliance Risk Discovery of improper accounting practices in wholly-owned subsidiary. Risk of additional unidentified accounting violations in past transactions and asset capitalization. 9/10
Earnings Deterioration Risk ¥871M special loss from prior-year corrections significantly impairs financial results. Combined with existing low credit rating (D-score 20/100), heightens operational stress. 8/10
Credit Risk Already weak equity base (5% capital ratio, ¥600M net assets) further strained by special loss. Solvency concerns intensify. 8/10
Regulatory Risk Potential violation of Financial Instruments Exchange Act disclosure obligations. Risk of regulatory investigation and administrative sanctions. 7/10
Litigation Risk Risk of shareholder derivative suits, class actions, and administrative penalties arising from accounting irregularities. 6/10
9/10 Compliance Risk
Discovery of improper accounting practices in wholly-owned subsidiary. Risk of additional unidentified accounting violations in past transactions and asset capitalization.
8/10 Earnings Deterioration Risk
¥871M special loss from prior-year corrections significantly impairs financial results. Combined with existing low credit rating (D-score 20/100), heightens operational stress.
8/10 Credit Risk
Already weak equity base (5% capital ratio, ¥600M net assets) further strained by special loss. Solvency concerns intensify.
7/10 Regulatory Risk
Potential violation of Financial Instruments Exchange Act disclosure obligations. Risk of regulatory investigation and administrative sanctions.
6/10 Litigation Risk
Risk of shareholder derivative suits, class actions, and administrative penalties arising from accounting irregularities.
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