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Hosting Delegates from the 77th Japan-America Student Conference

  • Media
2025.09.10

On Friday, August 15, delegates from the 77th annual Japan-America Student Conference graced our office with a visit and watched presentations given by our company members as a part of their conference’s roundtable activities. The theme for this roundtable was “Japan-US Business Strategies”.

The Japan-America Student Conference (JASC) is the first university student exchange program of its kind between Japan and the United States. It was founded in 1934 with the mission to “promote peace by furthering mutual understanding, friendship, and trust through international student interchange”. Understandably, it went on hiatus because of World War II, but in 1946, Japanese students set out to improve anti-Japanese sentiment in the US and rebuild trust between the two nations. The conference resumed in 1947, and has continued every year since then.

During the conference, an equal number of Japanese and American students live together for approximately one month, engaging in various discussions and activities. The overall purpose of the conference is to facilitate lively discussions on various global issues and deepen mutual understanding between the two countries.

Past delegates include Henry Kissinger, a former US Secretary of State, and Kiichi Miyazawa, the 78th Prime Minister of Japan.

The visit began with an office tour of our Shibuya Hikarie headquarters. Our office has many unique features, and we introduced each one to the students. You can learn more about our distinctive, unicorn-themed office, which is the face of D-POPS GROUP, in our article entitled “The Office of Unicorns”.

A member of the President’s Office of D-POPS GROUP, Shane Hetrick (who is from the US), was also present to answer the students’ questions during the tour.

After the tour, President Goto and Advisor Sugihara each gave a presentation.

The students listened intently and asked many questions. The presentation aimed to provide the students with insights for their own lives, touching on topics like life’s turning points and the desire to contribute to society through business.

We will continue to work toward realizing a Venture Ecosystem that is indispensable to society.

The 77th Japan-America Student Conference

Organizer: International Education Center (IEC), Cabinet Office of Japan
Planning and Operation: The 77th JASC Executive Committee
Conference Dates: Thursday, July 31, 2025 to Thursday, August 21, 2025
Number of participants: 72 total
 ・36 from Japan (including 8 Executive Committee members)
 ・36 from the US (including 8 Executive Committee members)

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Mountaineering and Leadership: Similarities Between Running a Startup Company and Climbing a Mountain
At D-POPS GROUP, we understand a “Venture Ecosystem” to be a dynamic platform that enhances the growth and sustainability of a community of enterprises. United by a shared identity and philosophy, these companies continuously innovate to address critical social challenges through groundbreaking business models. We are committed to making this ideal a reality through daily strategic efforts and unwavering dedication. *Please check out this page for more details: Venture Ecosystem: A Platform for Growth and Sustainability In this article, we’ll look at the parallels between managing a startup company and mountaineering. Specifically, the mindset required, the importance of accumulating steady steps, and how to deal with risk. 1. Similarities Between Mountaineering and Business Management When you stand at the foot of a large mountain you’re about to climb, you instinctively hold their breath. The sheer height of the summit, the distance to it, and the ruggedness of the terrain stir the heart. It’s an indescribable feeling—a mix of anticipation, anxiety, excitement, and fear. The Japanese term musha-burui (a warrior’s trembling before the start of a battle) perfectly captures this sensation. However, once you start walking, the summit quickly disappears from view. What you see instead are the rocks at your feet, wet tree roots, diverging paths, and steep slopes. You adjust your pace to avoid exhaustion, focus on your breathing, and accumulate one careful step after another. Simultaneously, you remain on the lookout for sudden weather changes or sounds from the bushes. Mountaineering is a progressive series of unassuming, unspectacular endeavors, while also being accompanied by significant danger. This is very similar to founding a company or working at a startup company. While pursuing a grand vision to solve a societal issue, the day-to-day work is often unglamorous, unpredictable, and complicated, and carries the weight of staking your whole life on a venture that may or may not survive. These six examples illustrate the similarities between mountaineering and management. (1) Mountaineering: Preparation → Management: Vision Setting Mountaineering is not possible to do without preparation. You decide which mountain to ascend, study maps, determine the route, and procure the equipment and physical strength necessary for the climb. In management terms, this equates to setting a vision, collecting capital and information, and assembling the development team and sales structure for your product. (2) Mountaineering: Party → Management: Team Formation The presence of companions is also crucial in mountaineering. Ideally, you climb together with people who have similar stamina and share your mountaineering style and goals. This closely mirrors the team building essential in startups and new businesses, so they say deciding “who to put on the bus first” is critical. (3) Mountaineering: Understanding the Surrounding Environment → Management: Responding to Market Changes While climbing, you must constantly monitor your surroundings for sudden shifts in the weather, unstable rocky paths, or turns that are easy to miss. In business operations, these correspond to “environmental variables” such as market fluctuations, competitor movements, and easily overlooked product defects or customer feedback. (4) Mountaineering: Knowing Your Current Position → Management: Tracking KPIs During the execution phase, knowing your current position is also critical. You need to accurately determine your current location and altitude using a GPS, and check your heart rate, perspiration levels, and sometimes even your blood oxygen saturation. In management, this is equivalent to checking KPIs and financial data and monitoring the well-being of your team members. (5) Mountaineering: Courageous Retreat → Management: Business Withdrawal or Pivot If you determine that continuing to climb is no longer feasible due to changes in the external environment, limits to your physical stamina, or sustaining an injury, one option is to turn back down the mountain. In management, this looks like a business withdrawal, downsizing, or a pivot. When leaders choose one of these options, it can protect lives, shareholders, and team members, and even sometimes lead to greater success later on. (6) Tenacious Spirit Finally, the boldness to challenge oneself, an unyielding spirit, and perseverance are essential in both mountaineering and startup company management. Although this may seem contradictory to the “courageous retreat” or “business withdrawal” mentioned in the previous point, there are many situations where the failure or success of your business entirely depends on whether you think to yourself “I can’t go on” or “Just one more step”. This mindset is a vital component of operating a startup company.   Mountaineering Business Management Vision-Setting and Preparation Phase Decide which mountain to summit Set the company’s vision and goals Train up the necessary physical fitness Acquire fundamental work skills Prepare the necessary gear for the climb Prepare management resources and capital Form a climbing party Gather partners with the same philosophies Execution Phase Accumulation of steps, one by one Accumulation of routine daily efforts Pay attention to the weather and terrain Pay attention to environmental variables Track your current location with a compass Track business KPIs Judge when it’s time to turn back Judge when it’s time to pivot or withdraw Overcome the difficult trail to reach the top Overcome difficulties to achieve your goals Safely descend the mountain Properly reflect and review performance Growth Phase Aim for an even taller mountain Take on the next business challenge 2. The Big Difference Between Theory and Practice Today, we are constantly being bombarded with information. Countless texts are being published, including autobiographies and “how-to” guides from business leaders, marketing books, and MBA-related textbooks. Learning about and discussing these intense experiences can sometimes create the illusion that we ourselves took part in them somehow. It’s certainly not useless to gain business operation knowledge from books. However, reading these concepts and stories is only the equivalent of reading information about a mountain or looking at a tall mountain from our mountaineering analogy. So, what constitutes “the experience of climbing”? It’s simply climbing—even a familiar mountain like Mount Takao—one step at a time with your own feet, breaking a sweat, losing your breath, and taking in the view from the summit with your own eyes until your very skin can feel it. It’s getting caught in the rain, getting lost, enduring pain in your feet, and still moving forward. It’s in these moments that you develop the strength to push yourself with just a little more effort and the guts to say, “This is as far as we go today” and turn back. These emotions and decision-making skills can never be gained just by reading a book. This very experience is what we compare to starting with the small things on the job. The accumulation of practical, small-scale tasks—like customer acquisition, sales channel development, new business launches, and hiring—is like continuing to go on small climbs, until eventually you build up the muscle and judgment needed to summit a major mountain. The information in your head and the feelings you internalize through your body are completely different things. We can never become true business leaders with knowledge alone. However, by continually climbing small mountains in our daily work, we eventually gain the strength to tackle the mountain of a major business venture, and our unceasing efforts eventually lead us to success. Even the most monumental achievement begins with a single, tiny step, and it is only through the accumulation of these steps that it is ever realized. 3. How to Train Your Mountaineering Feet and Business Skills There is a saying among mountaineers: “Mountain feet can only be trained on the mountain.” The same is true in business operations. Professional ability can never be enhanced through desk-based learning alone. (1) The Difference Between Gym Training and Mountain Training You cannot get authentic mountaineering feet by walking flat roads for dozens of kilometers, running on a treadmill at the gym, or lifting weights. A mountain trail isn’t just a flat path. You might slip on tree roots or fine gravel and injure your hand, sprain your ankle on a loose rock, or sometimes even fall and suffer a major injury. The act of continuously ascending a steep slope for hundreds of meters or scrambling up and down a rocky peak puts a unique strain on the body that you cannot get from repeating squats in a gym or climbing flights of stairs in a city building. It is through the repeated experience of climbing various mountains under diverse conditions that your core strength and cardiovascular function gradually adapt and are trained for the mountain. Only then will you truly have the mountaineering feet that no amount of gym training can provide. (2) Job Skills Can Only Be Enhanced on the Job The same principle applies to business capability. A consultant can draw a beautiful and perfect business strategy plan using management theory, SWOT analysis, and market research. If you attend business school, you might learn many theories and success stories, and perhaps even participate in negotiation role-playing exercises. However, this is merely the gym training mentioned in our climbing analogy. The despair when a client contract negotiation falls apart at the last minute, contrasted with the joy of successfully concluding a deal by having foreseen and avoided the exact cause of the previous failure. The anguish of being forced to decide on a withdrawal because a new startup failed to secure funding. The exhilaration of resolving a conflict of opinion with a team member through persistent dialogue. These are all experiences that can never be fully captured in a textbook or a role-play—they can only be gained on the “practical mountain” of business. Unlike a textbook, no real-life situation proceeds exactly as planned. Unlike role-playing, the people you deal with in business are sincere, flesh-and-blood individuals. The market environment is constantly changing. There is a time gap of several years or even decades between when the finished theories written in textbooks were developed and the present day. It is all of you readers who are currently creating the case studies and business theories relevant to today’s social, technological, and competitive environment. And as we repeatedly climb various work “mountains”, we acquire authentic business operation skills. We intuitively find the shortest path to success through repeated failures. We empathize with a customer to figure out their unspoken true needs. We sense potential obstacles to a project by reading a team member’s slight change in expression. These abilities are the intuition and judgment that can never be learned in a classroom; they can only be forged through the act of working itself. 4. The Importance of Reserves (1) Financial Reserves In mountaineering, the weight of your pack is a constant concern. A lighter pack conserves energy and makes long days easier. However, if you don’t pack certain supplies in the pursuit of lightening your load, it could be fatal. Sufficient water for the temperature and duration of your trip. Food according to your meal planning. Quick-energy snacks. Rain gear and a first-aid kit for emergencies. These are essential supplies for any climb. Having spare water, emergency food, and contingency gear drastically changes your actions and decisions when an emergency strikes. And above all, having such peace of mind makes a world of difference. This is exactly the same in the business world. It’s important to run a company lean and efficiently, but cutting buffers too deeply leaves you unable to withstand a crisis when it hits. What if, one day, a product defect is discovered and you have to issue a complete recall? Or what if, like during the COVID-19 pandemic, socio-economic activity grinds to a halt for months at a time? Having enough working capital on hand to survive for six months even if revenue drops to near zero—this is the “minimum baseline” cited by most management textbooks and business practitioners. A cash buffer provides that peace of mind, allowing you to act calmly in a crisis. It reduces the chance of making poor decisions due to cash flow pressure. Furthermore, this cushion allows you to take an offensive step and launch a challenge when the overall social environment is unstable. (2) Human Resource Reserves Financial reserves aren’t the only buffer needed; human resources are just as critical. Organizations operating on razor-thin staffing have no room for people to take time off, leading to an accumulation of physical and mental fatigue. As people approach their physical and mental limits, their judgment and creativity inevitably decline, and the risk of turnover increases. Once in this negative spiral, the entire organization becomes exhausted. In contrast, teams with staff and time buffers operate differently. They can respond flexibly to sudden trouble or new challenges and have time for improvement activities and learning. That peace of mind for individual members leads to the overall stability of the organization. (3) Buffers Are a Critical Investment In mountaineering, you don’t decide, “I’ll skip the emergency water, food, and first-aid kit because they add extra weight.” These items aren’t unnecessary burdens, they are the minimum preparation required to survive and return home safely. The cash reserves, spare personnel, and time buffers in business are the same. They may seem wasteful in peaceful times, but in an emergency, they become your only lifeline. Moreover, that very surplus is the driving force for taking the next strategic step and the energy for tackling new domains. The true measure of capability in both mountaineering and management is how you balance a lower carry-weight with having more reserves. Maintaining a buffer enables the peace of mind to reach the goal and return safely. In business operations, investing in both your working capital and the mental wellbeing of your team members is a certain strategy for success. 5. Both Mountaineering and Leadership Are a Series of Decisions Mountaineering constantly demands on-the-spot judgment. You must personally decide on your climbing pace, when to take a break, and when to replenish water or energy based on your physical condition and current location. Ultimately, making the call to call off the entire climb depending on the weather is also up to you. The sport of triathlon is popular among business executives. However, a triathlon is a race competing for rank, conducted within set rules, and fought in a venue where safety is perfectly secured. The decision to cancel due to bad weather is made by the organizers. In a company context, you might say this decision is made by the board of directors. Contests that involve competing within established rules are arguably better suited for directors of large corporations or hired professional managers. In contrast, mountaineering is a challenge where you attempt to defy nature, adapt to environmental changes, come face to face with danger at all times, and proceed based on your own judgment alone. Entrepreneurs or business professionals working at newly established startups and venturing into completely uncharted territory have the same attitude and mindset. They encounter a continuous stream of difficult decisions daily, constantly confronting risk while pursuing relentless effort to tackle major societal issues. In this way, mountaineering and managing a startup company truly go hand in hand. --- This analogy comparing the mindset of startup company leadership to mountaineering was written as a reference for the activities undertaken by D-POPS GROUP in promoting a Venture Ecosystem. We hope you enjoy this article and look forward to working with you sometime in future. D-POPS GROUP Advisor Genta Sugihara Appendix Advisor Sugihara, who supports the members of our Venture Ecosystem, is undertaking the challenge of conquering the “100 Famous Japanese Mountains” while wearing our company’s signature unicorn T-shirt, to illustrate the spirit of a startup company.
  • Media
2025.09.29
The Office of Unicorns: Introducing D-POPS GROUP’s Iconic Headquarters within Shibuya Hikarie
D-POPS GROUP relocated to Shibuya Hikarie in September 2021. The Shibuya Hikarie Building opened in April 2012 on the former site of the Tokyu Bunka Kaikan, a cultural landmark in Shibuya which proposed cutting-edge lifestyles. Shibuya Hikarie aims to be a platform for “creating and disseminating new value” as a symbolic tower in the ever-changing city of Shibuya. At D-POPS GROUP, we believe our office is more than just a place to work; it’s also a place to communicate the company’s vision and philosophy as a powerful message. So, in this article, let us introduce the office that symbolizes D-POPS GROUP. ◆Entrance As you enter the office, you are greeted by a unicorn mural covering the entire left wall. Opposite the mural are two conference rooms. Their glass walls are painted to look as if the unicorn galloping across from them was splashing them with water on its way up to the sky. The entrance is also home to a shelf full of panels representing each of our group companies. Beyond the entrance, the office opens up to a space almost like a hotel lobby. The striking bookshelves were professionally directed by CCC Art Lab of Culture Convenience Club Co., Ltd. Books and pieces of art are displayed based on the keywords challenge, innovation, and growth. ◆Workspace The workspace is divided into fixed-seating and free-seating areas, which are used according to the needs of the group companies that share our office space. The free-seating area offers a long table seating up to 16, several smaller tables for groups of 2-4 people, and a number of individual work booths. The fixed-seating area was designed with attention to detail in the tables and chairs to create an environment more conducive to uninterrupted concentration. The break area offers a panoramic view of the Tokyo skyline! In fact, this stunning sight can be enjoyed from anywhere in the office—not just the break area, but also the entrance, workspace, and some of the conference rooms. A unique benefit of our office is that because it is spacious and located on the building’s corner, you can enjoy a variety of vistas depending on your vantage point. ◆Meeting Rooms The office has meeting rooms of various sizes. The largest space, the seminar room, features the time-honored Creed and symbolic “Boy with Glasses” photograph of D-POPS, the mobile phone retail chain originally founded by D-POPS GROUP’s President and CEO. This “Boy with Glasses” photo was also painted in the entrance of the Shibuya Cross Tower office, where D-POPS was based for ten years before moving to Shibuya Hikarie. It is a meeting room that retains the pop flair of the old office, evoking a sense of nostalgia for those who were familiar with the Shibuya Cross Tower location. The executive boardroom is designed with a sophisticated, formal black aesthetic. Each of these meeting rooms has its own individual name, adorned with our unicorn motif. In fact, the image of a unicorn is ubiquitous throughout the entire office. The unicorn, which is the chosen symbol of D-POPS GROUP, embodies the ambition for D-POPS GROUP to become a unicorn company itself, as well as the hope to continuously produce $100M+ companies, IPOs, and unicorn companies from within D-POPS GROUP’s Venture Ecosystem. This concludes the presentation to our impressive, unicorn-themed office.
  • Media
2025.07.22
D-POPS GROUP’s Investigation into Revising Goodwill Amortization
D-POPS GROUP is a community of enterprises that combine “real business, technology, and group synergy” in their operations, aiming to realize a Venture Ecosystem that remains essential to society even 100 years from now. To ensure the growth of this ecosystem, we are driving five fundamental strategies: organic growth of existing businesses, establishment of new businesses and companies, M&A, CVC (corporate venture capital), and “Strategic Capital and Business Alliances”. This article will address the accounting topic of goodwill, which is closely related to M&A, especially given recent discussion about how to account for goodwill in Japan. Specifically, we will discuss the possibility of non-amortization of goodwill. Regarding goodwill, a request entitled “Introduction of Non-Amortization of Goodwill and Change in Classification of Goodwill Amortization Expense” (page in Japanese only) was submitted to the Accounting Standards Board of Japan (ASBJ), the body responsible for setting Japanese accounting standards, on May 30, 2025. This request was jointly submitted by the Japan Association of Corporate Executives and 13 startup-related organizations, and was voluntarily backed by 35 startup companies, and 138 corporate executives. The Council for Regulatory Reform, an advisory body to the Japanese Prime Minister, has also publicly stated that it will monitor this issue and closely watch the deliberation process at the ASBJ to ensure that the concerns of startup stakeholders are fully considered and appropriate discussions take place. This development was also reported by the Nikkei newspaper under the headline, 13 private-sector organizations and others propose review of goodwill amortization to accounting standards body. 1. Summary of the Request to the ASBJ The key points of the request submitted are as follows: ① To introduce non-amortization of goodwill as an option They proposed the adoption of an optional system that permits non-amortization of goodwill alongside the current amortization method. (They requested that at the latest, a measure be implemented by the end of FY2027, the final year of the “5-Year Startup Development Plan”.) ② To change the classification of goodwill amortization expenses They also proposed a reclassification of the goodwill amortization expense, currently recognized as an operating expense (selling, general, and administrative expenses), to non-operating expenses or extraordinary losses. (Part of their request included their hopes for a measure to be enacted in FY2026.) 2. Definition and Treatment of Goodwill in Current Japanese Accounting Standards Under current Japanese accounting standards, the portion of an M&A’s financial amount which exceeds the net assets of the acquired company is recorded as goodwill (an intangible asset) and is systematically amortized over a period within its estimated useful life, not exceeding 20 years. For example, if a target company with ¥300 million in net assets is acquired for ¥1 billion, ¥700 million is recorded as goodwill. If the recovery period is estimated to be 7 years, this ¥700 million in goodwill would be expensed (amortized) by ¥100 million annually on a straight-line basis over the 7 years. In contrast, IFRS (International Financial Reporting Standards) and GAAP (the United States’ Generally Accepted Accounting Principles) do not require systematic amortization of goodwill. Instead, they adopt an impairment-only approach, where goodwill is tested and written down only when its value is impaired. This is the “non-amortization of goodwill” approach mentioned in the above request. Impairment is the process of expensing an asset when its profitability declines and the recovery of the investment amount is no longer expected, writing down the asset to its reliably recoverable amount. In the earlier example, if the ¥700 million intangible asset was recorded but the acquired company continually reported losses with no prospect of recovery, the value would be considered impaired (i.e., the investment is unrecoverable), and the entire ¥700 million would be expensed at once. Japan’s accounting standards have consistently aimed for convergence with IFRS to improve the transparency and comparability of corporate financial reporting. However, the accounting treatment of goodwill remains a point of difference. As a result, many public companies that are actively pursuing M&A have transitioned to IFRS due to this specific discrepancy. While adopting IFRS incurs additional costs, such as introducing accounting consulting and increased audit fees, some listed companies have determined the benefits outweigh these costs. 3. Background of the Submitted Request The Japanese government formulated the “5-Year Startup Development Plan” in 2022. In this plan, M&A is highlighted not only as an exit strategy for startups but also as a crucial measure for promoting open innovation with existing large corporations (M&A for Startup Growth). The recently submitted request is rooted in the idea that the amortization of goodwill under Japanese accounting standards obstructs the promotion of M&A for startup growth. Specifically, when goodwill is amortized, it is recorded as an operating expense (selling, general, and administrative expenses), which reduces operating profit by the amount of the amortization charge. This added pressure on operating profit is cited as a hindrance or reason for companies to abandon M&A considerations. For startups, the net asset value often represents a small fraction of the enterprise value (M&A price), resulting in relatively large goodwill amounts. Furthermore, for many growing companies in Japan, most of the core competencies that are their greatest source of enterprise value are human capital (employee knowledge, skills, and experience) and intellectual capital (patents, trademarks, and corporate know-how). This trend is even stronger among startups, and it’s only expected to accelerate with the rapid increase in AI-focused startups. While human and intellectual capital are extremely important sources of corporate value, Japan’s current accounting standards make it almost impossible to properly capitalize on these “internally generated” intangible assets. The reasons cited include the difficulty of objectively measuring their value and the uncertainty of their contribution to future revenue. Consequently, there is a growing number of cases where a company with highly valuable human and intellectual capital is given a favorable enterprise value (M&A price) but has a small net asset value from an accounting perspective. This means that M&A deals targeting these companies are extremely likely to generate large amounts of goodwill, and in turn, the acquiring company will almost certainly face pressure on its operating profit due to the amortization of this goodwill. Operating profit is a crucial indicator of a company’s core earning power and significantly influences corporate value. However, theoretically, the increase or decrease in operating profit due to the amortization or non-amortization of goodwill does not directly affect enterprise value. This is because, in theory, enterprise value is assessed by the future cash flows a company generates, and goodwill amortization is the recording of an operating expense that does not involve a cash outflow, meaning it doesn’t affect the cash flow generated by actual business activities. The fact that the pressure on operating profit from goodwill amortization still acts as an obstacle or a reason to abandon M&A suggests that operating profit, as a key measure of core earnings, holds significant sway in practical corporate valuation, often transcending theoretical considerations. This is further suggested by the fact that IFRS is now considering clarifying the definition of “operating profit” and making its presentation mandatory, indicating its importance to investors in practice. Moreover, most IFRS-adopting companies in Japan already show operating profit or a similar item on their income statements. 4. What is Goodwill According to D-POPS GROUP, which Aims to Realize a Venture Ecosystem? D-POPS GROUP fully understands the merits and drawbacks of both amortization and non-amortization of goodwill in fulfilling its obligation to explain its financial and management status to stakeholders. We support the non-amortization of goodwill, or at least making it an option to do so. As one of our strategies for realizing and growing the Venture Ecosystem, we have actively pursued M&A. However, we feel that the pressure on operating profit caused by goodwill amortization obstructs the accurate explanation of our true management status, including the corporate growth we have achieved. When goodwill is amortized, the goodwill balance decreases each fiscal year, but the accumulation of net assets is limited due to the pressure on operating profit. Conversely, when goodwill is not amortized, the goodwill balance remains high (unless impairment occurs), resulting in a large total asset balance. Since operating profit is not pressured, the accumulation of net assets accelerates. In simple terms, the essence of assets on the balance sheet is “what a company currently possesses that forms the basis of its future earning power”. The net asset value, excluding shareholder contributions, represents the “accumulation of profits a company has earned”. When D-POPS GROUP invites companies into our Venture Ecosystem through M&A, we are confident that they will generate future earnings (i.e., cash flows) that exceed the investment amount, leading to investment recovery. This confidence stems from group synergy created by the conglomerate premium—one of our core strategies—and our goal is for these cash flows to increase year-on-year through business growth within the symbiotic relationships within our Venture Ecosystem. Therefore, even if the goodwill amount is large, we believe it appropriately reflects the future earning power gained through the M&A investment. Furthermore, the recovery of that investment leading to the accumulation of net assets accurately reflects the accumulation of earned profits. Thus, we believe this treatment is appropriate for explaining the financial status to our stakeholders. Finally, while D-POPS GROUP sometimes focuses on excellent business models during M&A, we often place a greater emphasis on the capabilities and know-how of leaders who steadily execute superior management strategies. This is connected to the fact that D-POPS GROUP’s Venture Ecosystem emphasizes self-reliance and aims to be a community of independent business owners. Our ecosystem provides a “conglomerate premium” business environment for managers seeking further self-growth through group synergy. We fundamentally hope these leaders will continue paving the way for their companies’ management and growth even after joining the group. Companies built by such leaders typically have established highly valuable human and intellectual capital through strategic investments aimed at future revenue expansion and competitive advantage (such as research and development, personnel training, and marketing) by the time they join D-POPS GROUP. As noted earlier, the essence of an asset is “what a company currently possesses that forms the basis of its future earning power”. Expenses for research and development to create groundbreaking technology or training costs to develop excellent personnel should contribute to future revenue growth. Yet, as mentioned, it is not generally feasible to capitalize on these internally generated intangible assets. In our modern knowledge-intensive society, where intangible assets account for a major part of corporate value, this creates a challenge where a company’s financial statements may not adequately reflect its true value or the reality of its investments. In this kind of context, we believe that amortizing the goodwill of companies that join our group through M&A is basically like double-expensing. This is because most of that goodwill is essentially equal to the expenses that those group companies previously invested in their own human and intellectual capital—expenses for “future corporate growth investments” that were not able to be calculated as assets. They are only now capitalized as an asset in the form of goodwill through the M&A. This raises the issue that an investment previously treated as an expense is at risk of being expensed again through the amortization of goodwill. In other words, D-POPS GROUP believes the majority of goodwill is equivalent to human and intellectual capital, and is thus a critical asset that forms the core of our conglomerate premium, driving our mission of realizing a Venture Ecosystem. We aim for this to accelerate group synergy, generating more cash flow within our Ecosystem, which is then reinvested for the Ecosystem’s future growth. This virtuous cycle accelerates innovation and contributes to the future of Japan. After the revision of the Tokyo Stock Exchange’s Growth Market, M&A has become increasingly vital as a major pillar of growth strategy and a key exit strategy. We will closely monitor the upcoming deliberations by the ASBJ regarding the accounting treatment of goodwill, which is deeply linked to M&A. We hope you enjoyed this article and look forward to working with you sometime in future. D-POPS GROUP Advisor Yoshihiro Yoneya
  • Media
2025.06.25
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