---
title: "Nidec’s operating assets: delayed write-downs and a suppressed acquisition gain"
language: en
canonical: https://dossiertwist.com/dossiers/nidec/operating-assets/
as_of: 2026-10-06
keywords: ["Nidec","accounting","corporate governance","audit","quality","subsidiaries"]
---

# Nidec’s operating assets: delayed write-downs and a suppressed acquisition gain

**Question.** Were all corrections concealed losses?

**Answer.** The examples include overdue impairment and inventory reductions, but also a gain that should have been recognised earlier.

## Unused property and unsaleable stock

- Analysis: Nidec Instruments continued carrying an unused company residence while negotiating a sale and trying to meet performance targets. The committee said a ¥414 million impairment recorded in FY2024 belonged in FY2020, when the final residents left and future use ended. A decision to sell is distinct from evidence that the sale completed. [s-d11]
- Attributed: The committee found that Nidec Instruments should have impaired an unused company residence in FY2020 after the final residents left and no future use was planned. Instead it recognised a ¥414 million impairment in the fourth quarter of FY2024 after deciding to sell the land to the local government. [s-d11]
  - Qualification: The report describes negotiations, a later decision to sell and delayed accounting. It does not establish a completed sale merely from the decision.
- Analysis: For OKK and its Ohtoyo and US subsidiaries, the committee identified ¥2.437 billion of inventory write-downs needed by June 2025. The amounts relate to different legal entities but sum to that one total. The committee linked delay to self-funding requirements, while retaining the headquarters executive’s answer that any instruction assumed proper accounting. A system change limited reconstruction of the full earlier inventory history. [s-d11]
- Attributed: The committee identified ¥2.437 billion of inventory write-downs that should have been recognised by June 2025 across Nidec OKK, Ohtoyo Kiko and OKK USA: ¥1.742 billion, ¥39 million and ¥656 million respectively. The inventory included obsolete, inactive or excessive items with little or no realistic future use. [s-d11]
  - Qualification: A system change limited reconstruction of complete historical inventory data. The three figures are components of the total. The report attributes delayed write-downs to the requirement to fund disposal from profits while achieving targets.
  - Response: The headquarters executive said any self-funding instruction assumed proper accounting and was not an instruction to exclude inventory that required accounting treatment. The committee retained that answer alongside its contrary documentary account.

## The Takisawa counterexample

- Analysis: Nidec acquired 86.14% of Takisawa in November 2023 and the remainder in February 2024. The committee says land owned by the Taiwanese subsidiary was excluded from purchase-price allocation to avoid recognising a ¥3.34 billion bargain-purchase gain for the earlier period. The land valuation uplift and resulting net gain are different measures. [s-d11]
- Attributed: The committee found that Nidec excluded Taiwan Takizawa land from purchase-price allocation to avoid recognising a ¥3.34 billion bargain-purchase gain for FY2023. It records acquisition of 86.14% of Takisawa in November 2023 and completion of full ownership in February 2024. [s-d11]
  - Qualification: This case concerns avoiding a gain, demonstrating why all corrections cannot be called concealed losses. The land’s appraised gain and the net bargain-purchase gain are different figures.
  - Response: The headquarters CFO said he was uneasy about the prior-year adjustment but believed the option presented by accounting specialists would not violate the rules. The committee rejected the arbitrary exclusion under the applicable acquisition-accounting requirements.
- Analysis: The CFO said he believed the option presented by accounting specialists was permissible. The committee rejected the arbitrary exclusion and recorded concern that revising the previous year upward would raise the benchmark for a new record result. This example matters because the accounting problem was not simply hiding losses: management’s preferred performance narrative could also discourage recognition of a gain. [s-d11]

## Sources

- [s-d11] Research source · s-d11