Tax-effect accounting following the transition to the group tax consolidation system

「The Company and certain domestic consolidated subsidiaries have applied the group aggregation system from the current consolidated fiscal year.」

「The company and certain domestic consolidated subsidiaries transitioned from the consolidated taxation system to the group tax sharing system from the beginning of the first-quarter consolidated accounting period. Accordingly, accounting and disclosure for corporate income taxes, local corporate taxes and tax-effect accounting follow the Practical Solution on Accounting and Disclosure when Applying the Group Tax Sharing System.」

「The Company and certain domestic consolidated subsidiaries have applied the provisions of Paragraph 3 of Practical Solution Report No. 39, Accounting Treatment for the Application of Tax Effect Accounting in the Transition from the Consolidated Taxation System to the Group Tax Sharing System, dated 31 March 2020, to items 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 the transition to the group tax sharing system. Accordingly, they have not applied Paragraph 44 of ASBJ Guidance No. 28, Guidance on the Accounting Standard for Tax Effect Accounting, and have calculated deferred tax assets and deferred tax liabilities based on the provisions of the tax laws before revision.」