Application of Tax-Effect Accounting Following the Transition to the Group Sharing System

「The company and its domestic consolidated subsidiaries apply the group tax sharing system. In accordance with the Practical Solution on the Accounting and Disclosure under the Group Tax Sharing System (Practical Solution Report No. 42, 12 August 2021), they account for and disclose corporate income taxes and local corporate taxes, as well as tax-effect accounting related to those taxes.」

「The company and its domestic consolidated subsidiaries apply the group tax sharing system. In accordance with the Practical Solution on the Accounting and Disclosure under the Group Tax Sharing System (Practical Solution Report No. 42, 12 August 2021), they account for and disclose corporate income taxes and local corporate taxes, as well as tax-effect accounting related to those taxes.」

「Our company and certain domestic consolidated subsidiaries have transitioned from the consolidated taxation system to the group tax sharing system from the first-quarter consolidated accounting period. Accordingly, the accounting treatment and disclosures for corporate income taxes, local corporate taxes, and tax-effect accounting comply with the Practical Solution Report on Accounting Treatment and Disclosure When Applying the Group Tax Sharing System (Practical Solution Report No. 42, 12 August 2021; hereinafter, “Practical Solution Report No. 42”). In addition, pursuant to paragraph 32(1) of Practical Solution Report No. 42, the effects of the change in accounting policy accompanying the adoption of Practical Solution Report No. 42 are deemed to be nonexistent.」

「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 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.」

「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.」

「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.」

「The company and certain domestic consolidated subsidiaries apply the treatment prescribed in paragraph 3 of the Practical Solution on the Accounting and Disclosure under the Transition from the Consolidated Taxation System to the Group Tax Sharing System for matters introduced under the Act Partially Amending the Income Tax Act and Other Acts (Act No. 8 of 2020) in connection with the transition to the group tax sharing system, including matters arising from revisions to the standalone tax payment system accompanying that transition. Accordingly, they do not apply paragraph 44 of the Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, 16 February 2018) and calculate deferred tax assets and deferred tax liabilities based on the provisions of the tax laws before amendment.」

「The company and certain domestic consolidated subsidiaries apply the treatment prescribed in paragraph 3 of the Practical Solution on the Accounting and Disclosure under the Transition from the Consolidated Taxation System to the Group Tax Sharing System for matters introduced under the Act Partially Amending the Income Tax Act and Other Acts (Act No. 8 of 2020) in connection with the transition to the group tax sharing system, including matters arising from revisions to the standalone tax payment system accompanying that transition. Accordingly, they do not apply paragraph 44 of the Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, 16 February 2018) and calculate deferred tax assets and deferred tax liabilities based on the provisions of the tax laws before amendment.」

「With respect to the transition to the group tax sharing system established under the Act Partially Amending the Income Tax Act and Other Laws (Act No. 8 of 2020), and matters for which the single-company taxation system was revised in connection with that transition, the company and certain domestic consolidated subsidiaries apply the provisions of the tax laws before the amendment 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.」

「With respect to the transition to the group tax sharing system established under the Act Partially Amending the Income Tax Act and Other Laws (Act No. 8 of 2020), and matters for which the single-company taxation system was revised in connection with that transition, the company and certain domestic consolidated subsidiaries apply the provisions of the tax laws before the amendment 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.」