Tax Effect Accounting Following the Transition to the Group Tax Sharing System

「当社は、財務報告の信頼性確保及び、金融商品取引法第24条の４の４に規定する内部統制報告書の有効かつ適正な提出のため、代表取締役社長の指示の下、内部統制システムの構築を行い、その仕組みが適正に機能することを継続的に評価し、必要な是正を行うとともに、金融商品取引法及びその他関係法令等との適合性を確保する。」

「The Company and certain domestic consolidated subsidiaries have transitioned from the consolidated taxation system to the group tax sharing system from the first quarter of the current fiscal year. Accordingly, the accounting treatment and disclosures for corporate and local corporate taxes and tax-effect accounting comply with the Accounting and Disclosure Treatment When Applying the Group Tax Sharing System (Practical Response Report No. 42, 12 August 2021; hereinafter, “Practical Response Report No. 42”). In accordance with paragraph 32(1) of Practical Response Report No. 42, the effects of changes in accounting policies arising from the application of Practical Response Report No. 42 are deemed to be nonexistent.」

「Our company and certain domestic consolidated subsidiaries will transition to the group sharing system established under the Act Partially Amending the Income Tax Act and Other Acts (Act No. 8 of 2020). For items revised in connection with the transition from the consolidated taxation system to the group sharing system, we apply the treatment under Paragraph 3 of Practical Solution No. 39 on the Application of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Sharing System and do not apply Paragraph 44 of the Implementation Guidance on Tax Effect Accounting. Deferred tax assets and liabilities are therefore measured based on the provisions of the tax laws before amendment.」