Tax-effect Accounting Associated with the Transition from the Consolidated Taxation System to the Group Tax Sharing System

「The Company and certain domestic consolidated subsidiaries have transitioned from the consolidated taxation system to the group tax-sharing system from the beginning of the first quarter of the current fiscal year.」

「From the beginning of the following consolidated fiscal year, the company plans to apply the “Accounting Treatment and Disclosure under the Group Tax Sharing System,” which prescribes the accounting treatment and disclosure of corporate and local corporate taxes and tax-effect accounting when applying the group tax sharing system.」

「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.」