{
  "docId": "019dd923-622c-750b-8b96-7f2e60571091",
  "docSlug": "9e3d3c9dc613",
  "documentTitle": "Nidec Corp. (6594 JP)",
  "authorId": "51_Muddy_Waters",
  "authorName": "Carson C. Block",
  "documentKindSlug": "research-note",
  "documentKindLabel": "Research note",
  "sourceTypeSlug": "short_seller",
  "sourceTypeLabel": "Short seller",
  "presentationDate": "2016-12-13 00:00:00",
  "orientation": "portrait",
  "aspectRatio": 0.77272725,
  "pageNumber": 24,
  "pageCount": 54,
  "prevPage": 23,
  "nextPage": 25,
  "slideType": "precedent_table",
  "function": "expose_contradiction",
  "density": "dense",
  "nDataPoints": 0,
  "notes": "The slide presents qualitative evidence of aggressive sales practices and potential revenue recognition issues.",
  "elementsJson": [
    "data_table",
    "paragraph"
  ],
  "metadataConfidence": 0.9,
  "imagePath": null,
  "slideHref": "/slides/019dd923-622c-750b-8b96-7f2e60571091/24",
  "deckHref": "/decks/019dd923-622c-750b-8b96-7f2e60571091",
  "deckJsonHref": "/decks/019dd923-622c-750b-8b96-7f2e60571091.json",
  "deckAnchorHref": "/decks/019dd923-622c-750b-8b96-7f2e60571091#slide-24",
  "components": [
    {
      "bbox": null,
      "kind": "callout",
      "text": "Nidec’s revenue recognition policy is not as conservative as it can be, and in our opinion, could help to enable the alleged channel stuffing.",
      "attrs": null,
      "subkind": null,
      "toolName": "Visual emphasis",
      "toolSlug": "visual-emphasis",
      "confidence": null,
      "componentId": "019dd953-203f-7169-9f8c-ad0852666865",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.78,
        "x": 0.11,
        "y": 0.86
      },
      "kind": "paragraph",
      "text": "Nidec’s revenue recognition policy is not as conservative as it can be, and in our opinion, could help to enable the alleged channel stuffing. Nidec recognizes revenue without regard to customer “acceptance”, which could enable Nidec to record revenue without actually receiving payment.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "0cda3433-0a4c-44d7-8421-04acd0658944",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.78,
        "x": 0.11,
        "y": 0.51
      },
      "kind": "paragraph",
      "text": "It is important to note that we have not done our own independent verification of these allegations. To the extent these interviews are accurate, the takeaways are that management in Japan sets unrealistically high sales targets for the China operation.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "123a0a16-7a34-4a89-b24a-1bc118f27317",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.78,
        "x": 0.11,
        "y": 0.71
      },
      "kind": "paragraph",
      "text": "Allegedly, usually the clients agree to take the goods into their buffer or safety stock. (Customers do not pay for goods in their safety stock until they use them). Sometimes, the customers direct that the goods be held in a third party logistics provider’s warehouse.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "600623f1-275d-477a-8d0a-60e83ce51650",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.08,
        "w": 0.78,
        "x": 0.11,
        "y": 0.61
      },
      "kind": "paragraph",
      "text": "From these interviews, the way the alleged channel stuffing seems to work is that a salesperson asks a client to take delivery of items that were planned for the subsequent period. It was explained that Nidec’s CRM systems record a sale when the goods leave the warehouse.",
      "attrs": null,
      "subkind": "paragraph",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "86363dcb-cca3-4726-b3e0-ae07625dec52",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": null,
      "kind": "quote",
      "text": "In the case of completed product, we are dealing with the customer to clean up the inventory. For components, customers would often subsequently receive discounts on components (with 10% to 15% discounts not uncommon). — Source C",
      "attrs": null,
      "subkind": null,
      "toolName": "Authority citation",
      "toolSlug": "authority-citation",
      "confidence": null,
      "componentId": "019dd953-203f-7169-9f8c-b0716b425c90",
      "frameworkName": null,
      "frameworkSlug": null
    },
    {
      "bbox": {
        "h": 0.4,
        "w": 0.78,
        "x": 0.11,
        "y": 0.09
      },
      "kind": "table",
      "text": "Source, Division, Employed Until, Comments",
      "attrs": null,
      "subkind": "data",
      "toolName": null,
      "toolSlug": null,
      "confidence": null,
      "componentId": "d23e4e27-9e27-4b13-b8f4-18a1a5d11011",
      "frameworkName": null,
      "frameworkSlug": null
    }
  ],
  "metrics": [],
  "tools": [],
  "frameworks": [],
  "arcBeats": [
    {
      "to": 24,
      "from": 10,
      "beatId": "7d2a5d2a-519d-487d-8292-a3ffbf5fc2c0",
      "arcName": "Overcoming the Monster",
      "arcSlug": "overcoming-monster",
      "beatName": "The Struggle",
      "beatSlug": "overcoming-monster-the-struggle",
      "evidence": "The document presents evidence of Nidec's questionable practices, including write-offs and revenue recognition issues.",
      "position": 1,
      "confidence": 0.8,
      "parentBeatName": "Development",
      "parentBeatSlug": "development"
    }
  ],
  "loops": [
    {
      "to": 24,
      "from": 10,
      "name": "The Reveal",
      "slug": "05-the-reveal",
      "bestFor": "Product launches, strategic pivots, unexpected findings",
      "matchId": "a79f950c-a0c5-47f8-a5c9-2a653d5764bc",
      "evidence": "The document presents several examples of Nidec's questionable practices, including write-offs and revenue recognition issues.",
      "position": 0,
      "objective": "To reveal Nidec's questionable financial practices and reporting",
      "structure": "Setup the Question -> Build Suspense -> The Big Reveal",
      "confidence": 0.8,
      "description": "Build mystery and anticipation, then deliver a surprising or powerful conclusion"
    }
  ],
  "imagePathAlt": null,
  "thumbSrc": null,
  "thumbSrcAlt": null,
  "locked": true
}