Application of Transitional Measures for Tax Effect Accounting in Connection with the Transition 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 first quarter. Accordingly, the accounting and disclosure treatment for corporation tax, local corporation tax and tax effect accounting is conducted in accordance with Practical Solution on the Accounting and Disclosure under the Group Tax Sharing System (ASBJ PITF No. 42, 12 August 2021, hereinafter “ASBJ PITF No. 42”).」

「The Company and certain domestic consolidated subsidiaries transitioned from the consolidated taxation system to the group relief system from the beginning of the first quarter of the current fiscal year. Accordingly, accounting and disclosure for corporate and local income taxes and tax-effect accounting follow the Practical Solution on Accounting and Disclosure under the Group Relief System (Practical Solution Report No. 42, 12 August 2021).」

「Beginning at the start of the following consolidated fiscal year, the Company planned to apply the Practical Solution on Accounting and Disclosure under the Group Tax-Sharing System (Practical Solution Report No. 42, 12 August 2021), which prescribes accounting and disclosure treatments for corporate and local corporate taxes and tax-effect accounting when applying the group tax-sharing system.」

「The Company and certain domestic consolidated subsidiaries have not applied the provisions of paragraph 44 of the Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, 16 February 2018) to items relating to the transition to the group tax sharing system established under the Act Partially Amending the Income Tax Act and Other Acts (Act No. 8 of 2020), including items for which the consolidated taxation system was reviewed in connection with the transition. Under the accounting treatment prescribed in paragraph 3 of Accounting Treatment for Applying Tax Effect Accounting in the Transition from the Consolidated Taxation System to the Group Tax Sharing System (ASBJ Practical Issues Task Force No. 39, 31 March 2020), the amounts of deferred tax assets and deferred tax liabilities are therefore based on the provisions of tax laws before the amendments.」

「The Company and certain domestic consolidated subsidiaries have not applied the provisions of paragraph 44 of the Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, 16 February 2018) to items relating to the transition to the group tax sharing system established under the Act Partially Amending the Income Tax Act and Other Acts (Act No. 8 of 2020), including items for which the consolidated taxation system was reviewed in connection with the transition. Under the accounting treatment prescribed in paragraph 3 of Accounting Treatment for Applying Tax Effect Accounting in the Transition from the Consolidated Taxation System to the Group Tax Sharing System (ASBJ Practical Issues Task Force No. 39, 31 March 2020), the amounts of deferred tax assets and deferred tax liabilities are therefore based on the provisions of tax laws before the amendments.」

「The company and certain of its domestic consolidated subsidiaries apply the treatment under Paragraph 3 of the Practical Solution on the Application of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Tax Sharing System (Practical Response Report No. 39, 31 March 2020) to the transition to the group tax sharing system established under the Act Partially Amending the Income Tax Act, etc. (Act No. 8 of 2020), and to items for which the standalone taxation system was revised in connection with that transition,」

「The Company and certain domestic consolidated subsidiaries have not applied the provisions of paragraph 44 of the Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, 16 February 2018) to items relating to the transition to the group tax sharing system established under the Act Partially Amending the Income Tax Act and Other Acts (Act No. 8 of 2020), including items for which the consolidated taxation system was reviewed in connection with the transition. Under the accounting treatment prescribed in paragraph 3 of Accounting Treatment for Applying Tax Effect Accounting in the Transition from the Consolidated Taxation System to the Group Tax Sharing System (ASBJ Practical Issues Task Force No. 39, 31 March 2020), the amounts of deferred tax assets and deferred tax liabilities are therefore based on the provisions of tax laws before the amendments.」

「The Company and certain domestic consolidated subsidiaries have not applied the provisions of paragraph 44 of the Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, 16 February 2018) to items relating to the transition to the group tax sharing system established under the Act Partially Amending the Income Tax Act and Other Acts (Act No. 8 of 2020), including items for which the consolidated taxation system was reviewed in connection with the transition. Under the accounting treatment prescribed in paragraph 3 of Accounting Treatment for Applying Tax Effect Accounting in the Transition from the Consolidated Taxation System to the Group Tax Sharing System (ASBJ Practical Issues Task Force No. 39, 31 March 2020), the amounts of deferred tax assets and deferred tax liabilities are therefore based on the provisions of tax laws before the amendments.」

「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.」