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 aggregation system from the first quarter of the current consolidated fiscal year. Accordingly, the accounting treatment and disclosure of corporate income taxes, local corporate taxes and tax-effect accounting comply with the Treatment of Accounting and Disclosure When Applying the Group Aggregation System (Practical Solution Report No. 42, 12 August 2021; hereinafter, "Practical Solution Report No. 42").」

「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 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.」

「The Company and certain consolidated subsidiaries will transition from the consolidated taxation system to the group aggregation system from the next consolidated fiscal year.」

「With respect to the transition to the group aggregation system established under the Act Partially Amending the Income Tax Act and Other Acts (Act No. 8 of 2020), and items for which the single-entity taxation system was revised in connection with that transition, the Company and certain domestic consolidated subsidiaries, pursuant to paragraph 3 of the Treatment of the Application of Tax Effect Accounting in Connection with the Transition from the Consolidated Taxation System to the Group Aggregation System (Practical Solution Report No. 39, 31 March 2020), have not applied the provisions of paragraph 44 of the Implementation Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, 16 February 2018), and have determined the amounts of 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 aggregation system established under the Act Partially Amending the Income Tax Act and Other Acts (Act No. 8 of 2020), and items for which the single-entity taxation system was revised in connection with that transition, the Company and certain domestic consolidated subsidiaries, pursuant to paragraph 3 of the Treatment of the Application of Tax Effect Accounting in Connection with the Transition from the Consolidated Taxation System to the Group Aggregation System (Practical Solution Report No. 39, 31 March 2020), have not applied the provisions of paragraph 44 of the Implementation Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, 16 February 2018), and have determined the amounts of 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 aggregation system established under the Act Partially Amending the Income Tax Act and Other Acts (Act No. 8 of 2020), and items for which the single-entity taxation system was revised in connection with that transition, the Company and certain domestic consolidated subsidiaries, pursuant to paragraph 3 of the Treatment of the Application of Tax Effect Accounting in Connection with the Transition from the Consolidated Taxation System to the Group Aggregation System (Practical Solution Report No. 39, 31 March 2020), have not applied the provisions of paragraph 44 of the Implementation Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, 16 February 2018), and have determined the amounts of deferred tax assets and deferred tax liabilities based on the provisions of the tax laws before amendment.」

「The Company and certain domestic consolidated subsidiaries applied for approval to use the consolidated taxation system during the current consolidated fiscal year, and the system became applicable from the next consolidated fiscal year. Accordingly, from the current consolidated fiscal year, they have applied accounting treatments based on the assumption that the consolidated taxation system would be used.」

「The Company and certain consolidated subsidiaries applied for approval to use the consolidated taxation system during the third quarter of the current consolidated fiscal year and became scheduled to apply the system from the next consolidated fiscal year. Accordingly, from the same quarter, they have applied accounting treatments based on the assumption that the consolidated taxation system would be used, in accordance with the "Temporary Treatment of Tax Effect Accounting When Applying the Consolidated Taxation System (Part 1)" (Accounting Standards Board of Japan, Practical Solution Report No. 5, 16 January 2015) and the "Temporary Treatment of Tax Effect Accounting When Applying the Consolidated Taxation System (Part 2)" (Accounting Standards Board of Japan, Practical Solution Report No. 7, 16 January 2015). In addition, with respect to the transition to the group aggregation system established under the Act Partially Amending the Income Tax Act and Other Acts (Act No. 8 of 2020), and items for which the single-entity taxation system was revised in connection with that transition, the Company and certain consolidated subsidiaries have, pursuant to paragraph 3 of the Treatment of the Application of Tax Effect Accounting in Connection with the Transition from the Consolidated Taxation System to the Group Aggregation System (Practical Solution Report No. 39, 31 March 2020), not applied the provisions of paragraph 44 of the Implementation Guidance on Accounting Standard for Tax Effect Accounting (ASBJ Guidance No. 28, 16 February 2018), and have determined the amounts of deferred tax assets and deferred tax liabilities based on the provisions of the tax laws before amendment.」