Application of tax-effect accounting following the transition to the group aggregation system

「The Company and certain domestic consolidated subsidiaries transitioned from the consolidated taxation system to the group sharing system from the first quarter of the fiscal year. Accordingly, the accounting treatment and disclosure of corporate and local corporate taxes and tax-effect accounting follow the “Accounting Treatment and Disclosure When Applying the Group Sharing System” ...」

「The Company and certain domestic consolidated subsidiaries transitioned from the consolidated tax system to the group tax-sharing system from the beginning of the first quarter of the current fiscal year. Accordingly, accounting and disclosure for corporate income taxes, local corporate taxes and tax-effect accounting are conducted in accordance with the Practical Solution on Accounting and Disclosure Under the Group Tax-Sharing System.」

「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 of its domestic consolidated subsidiaries, with respect 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 promulgated on 31 March 2020) and items for which the stand-alone taxation system was revised in conjunction with that transition, apply the provisions of paragraph 3 of the Practical Response Report No. 39, “Accounting Treatment for the Application of Tax Effect Accounting Related to the Transition from the Consolidated Taxation System to the Group Tax Sharing System” (31 March 2020), and do not apply paragraph 44 of the “Guidance on the Application of Accounting Standard for Tax Effect Accounting” (Accounting Standard for Business Enterprises Application Guidance No. 28, 16 February 2018). Accordingly, the amounts of deferred tax assets and deferred tax liabilities are based on the tax laws before amendment.」

「The Company and certain of its domestic consolidated subsidiaries, with respect 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 promulgated on 31 March 2020) and items for which the stand-alone taxation system was revised in conjunction with that transition, apply the provisions of paragraph 3 of the Practical Response Report No. 39, “Accounting Treatment for the Application of Tax Effect Accounting Related to the Transition from the Consolidated Taxation System to the Group Tax Sharing System” (31 March 2020), and do not apply paragraph 44 of the “Guidance on the Application of Accounting Standard for Tax Effect Accounting” (Accounting Standard for Business Enterprises Application Guidance No. 28, 16 February 2018). Accordingly, the amounts of deferred tax assets and deferred tax liabilities are based on the tax laws before amendment.」

「With respect to the transition by the Company and certain domestic consolidated subsidiaries to the group taxation system established under the Act Partially Amending the Income Tax Act and Other Legislation (Act No. 8 of 2020), and items for which the single-company taxation system was revised in connection with that transition, the Company has applied the treatment under paragraph 3 of Practical Issues Task Force No. 39. Accordingly, without applying paragraph 44 of the Implementation Guidance on Accounting Standard for Tax Effect Accounting, deferred tax assets and deferred tax liabilities are measured under the provisions of the tax laws before the amendments.」

「The Company and certain of its domestic consolidated subsidiaries apply the provisions of the tax laws before amendment to the amounts of deferred tax assets and deferred tax liabilities, pursuant to paragraph 3 of the Practical Response Report No. 39, “Accounting Treatment for the Application of Tax Effect Accounting Related to the Transition from the Consolidated Taxation System to the Group Tax Sharing System” (31 March 2020), with respect to the transition to the group tax sharing system established under the “Act Partially Amending the Income Tax Act and Other Acts” (2020 Act No. 8) and items for which the stand-alone taxation system was revised in conjunction with that transition.」