Transition from a Lump-Sum Retirement Benefit System to a Funded Defined-Benefit Plan

「In July 2024, we decided on and notified employees of changes to the retirement benefit regulations, with 1 October of the same year as the effective date, and on that date transitioned from a lump-sum retirement benefit plan to a funded defined benefit plan. For the accounting treatment of this transition, we applied Accounting Standard Application Guidance No. 1, “Accounting Treatment for Transfers Between Retirement Benefit Plans, etc.” (revised 16 December 2016), and Practical Solution Report No. 2, “Practical Treatment of Accounting for Transfers Between Retirement Benefit Plans, etc.” (revised 7 February 2007). During the current interim accounting period, the defined benefit obligation decreased and past service costs of ¥69.091 million were incurred. These past service costs are being recognised as an expense on a straight-line basis over 5 years, a specified number of years within the employees’ average remaining service period at the time the costs arose.」