Insolvency - Saimu Chouka

Japanese: 債務超過 - さいむちょうか

This refers to a situation where the total liabilities of the debtors exceed the total assets held by the company. Assets here refer to the total amount of shareholders' equity, such as capital, legal reserves, and surpluses, and when the total of these is exceeded by deficits, causing the capital account to go into the negative, the company becomes insolvent. This means that all of the company's capital is covered by loans from other individuals or companies, and the company's financial condition is in an extremely precarious state. In the case of Japan's stock exchanges, if a company's consolidated financial statements show insolvency for two consecutive years, it will be delisted.

Source: ASCII.jp Digital Dictionary About ASCII.jp Digital Dictionary Information

Japanese:

債務者の負債の総額が、その企業が抱える資産の総額を上回る状態を指す。ここでの資産とは、資本金や法定準備金、剰余金などの株主資本の合計額であり、これらの合計額を欠損金が上回ることで、資本勘定がマイナスとなると債務超過になる。企業のすべての資本が、ほかの個人やほかの企業からの借金でまかなわれていることになり、その企業の財務体質はきわめて危険な状態にある。日本の証券取引所の場合、企業の連結決算が2年連続債務超過になると上場は廃止される。

出典　ASCII.jpデジタル用語辞典ASCII.jpデジタル用語辞典について　情報

<<: Debt assumption - Saimuhikiuke

>>: Financial statements