Tax Effect Accounting Treatment Associated with the Transition from Consolidated Taxation to the Group Tax Sharing System

「The company and certain domestic consolidated subsidiaries transitioned from the consolidated tax payment system to the group tax sharing system from the first quarter. Accordingly, the accounting treatment and disclosure for corporate and local corporate taxes and tax-effect accounting are governed by "Accounting Treatment and Disclosure for Applying the Group Tax Sharing System"」

「The Company and certain domestic consolidated subsidiaries transitioned from the consolidated taxation system to the group relief system from the beginning of the first quarter of the current consolidated fiscal year. Accordingly, the accounting and disclosure of corporate and local taxes and tax-effect accounting comply with the Practical Solution on Accounting and Disclosure When Applying the Group Relief System (Practical Solution Report No. 42, dated 12 August 2021).」

「The company plans to apply, from the beginning of the next consolidated fiscal year, the Practical Solution on the Accounting and Disclosure under the Group Tax Sharing System (ASBJ PITF No. 42, 12 August 2021), which prescribes the accounting and disclosure treatment for corporate and local corporate taxes and tax-effect accounting when applying the group tax sharing system.」

「For 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 for items affected by the review of the single-entity tax payment system accompanying that transition, the company and certain domestic consolidated subsidiaries calculate deferred tax assets and deferred tax liabilities based on the provisions of the tax laws before the amendments.”」

「With respect to the transition by the company and certain domestic consolidated subsidiaries to the group aggregation system established under the Act Partially Amending the Income Tax Act and Other Laws (Act No. 8 of 2020), and items for which the standalone taxation system was revised in connection with that transition, we have applied the treatment in Paragraph 3 of the Practical Response Report on the Application of Tax Effect Accounting for the Transition from the Consolidated Taxation System to the Group Aggregation System (Practical Response Report No. 39, dated 31 March 2020). Accordingly, Paragraph 44 of the Implementation Guidance on Tax Effect Accounting has not been applied, and deferred tax assets and liabilities are measured based on the provisions of the tax laws before amendment.」

「For 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 for items affected by the review of the single-entity tax payment system accompanying that transition, the company and certain domestic consolidated subsidiaries, in accordance with paragraph 3 of Practical Response Report No. 39, “Accounting Treatment for the Application of Tax Effect Accounting Associated with the Transition from the Consolidated Taxation System to the Group Tax Sharing System” (31 March 2020), calculate deferred tax assets and deferred tax liabilities based on the provisions of the tax laws before the amendments.」

「For 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 for items affected by the review of the single-entity tax payment system accompanying that transition, the company and its domestic consolidated subsidiaries calculate deferred tax assets and deferred tax liabilities based on the provisions of the tax laws before the amendments.”」

「For 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 for items affected by the review of the single-entity tax payment system accompanying that transition, the company and its domestic consolidated subsidiaries, in accordance with paragraph 3 of Practical Response Report No. 39, “Accounting Treatment for the Application of Tax Effect Accounting Associated with the Transition from the Consolidated Taxation System to the Group Tax Sharing System,” calculate deferred tax assets and deferred tax liabilities based on the provisions of the tax laws before the amendments.”」

「For 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 for items affected by the review of the single-entity tax payment system accompanying that transition, the company and its domestic consolidated subsidiaries apply the treatment under paragraph 3 of Practical Response Report No. 39, “Accounting Treatment for the Application of Tax Effect Accounting Associated with the Transition from the Consolidated Taxation System to the Group Tax Sharing System” (31 March 2020), and calculate deferred tax assets and deferred tax liabilities based on the provisions of the tax laws before the amendments, without applying the provisions of paragraph 44 of the “Implementation Guidance on Tax Effect Accounting” (ASBJ Guidance No. 28, 16 February 2018).」