According to foreign media reports, on July 1, Renault SA announced that it would recognize a non-cash loss of about 9.5 billion euros ($11.2 billion) after adjusting the accounting treatment of its troubled Nissan holdings.
Renault said the new accounting method will link the value of its Nissan shares to Nissan’s stock price, which has plummeted 38% in the past 12 months. However, Renault emphasized that the adjustment will not have a cash impact on the company and will not change how Renault’s dividend is calculated.
Image credit: Renault Automobile
The new accounting method for Nissan shares will be implemented from June 30, 2025. According to Renault’s latest financial policy, the long-term equity investment, which was originally accounted for using the equity method, will be adjusted to financial assets measured at fair value and included in other comprehensive income, and its valuation benchmark will refer to the market price of Nissan Motor Company’s shares.
“Although this accounting method adjustment will have a significant impact on the group’s financial statements, it will not change the strategic and operational commitments between Renault and Nissan,” Renault said in a statement. ”
Renault also said that the two companies will continue to promote joint industrial and technological development projects under the new strategic project announced on March 31, 2025. These initiatives demonstrate a partnership based on pragmatic business decisions, while also allowing each to maintain operational flexibility and efficiency.
However, with the intensification of market competition and the deepening of the crisis of trust between the two sides, the Renault-Nissan alliance is gradually loosening the existing cooperation framework. Nissan is currently facing three challenges: a financial situation that needs to be improved, an aging product lineup that needs to be updated, and the market shock caused by the Trump administration’s tariff policy. Meanwhile, Renault Group is looking for a new CEO to replace Luca de Meo, who will become CEO of Kering SA (which owns brands such as Gucci).
Nissan’s new CEO, Ivan Espinosa, was questioned by shareholders at his first AGM last month, questioning the viability of his turnaround plan and the failure of Nissan’s partnership with Honda Motor. With about 800 billion yen ($5.6 billion) of debt due next year, Nissan is currently seeking financing to maintain business stability.