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

「The company and certain domestic consolidated subsidiaries transitioned from the consolidated taxation system to the group tax sharing system from the current first quarter of the consolidated fiscal year. Accordingly, the accounting treatment and disclosures for corporate income taxes, local corporate taxes and tax effect accounting comply with Practical Response Report No. 42, Accounting Treatment and Disclosure for the Application of the Group Tax Sharing System (12 August 2021; hereinafter, Practical Response Report No. 42).」

「The company and certain consolidated subsidiaries have, 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 of 2020) and matters for which the single-company tax system was revised in connection with that transition, applied the treatment under Paragraph 3 of Practical Response Report No. 39, Accounting and Tax Effect Accounting Treatment for the Transition from the Consolidated Taxation System to the Group Tax Sharing System (31 March 2020). Accordingly, they have not applied the provisions of Paragraph 44 of the Implementation Guidance on Tax Effect Accounting (ASBJ Guidance No. 28, 16 February 2018), and have calculated deferred tax assets and deferred tax liabilities based on the provisions of the tax laws before amendment.」