Tax-Effect Accounting Following the Transition 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 of the current consolidated fiscal year. Accordingly, the accounting and disclosure treatment for corporate and local corporate taxes and tax-effect accounting follows the 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 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.」

「The company and certain domestic consolidated subsidiaries have applied the treatment under Paragraph 3 of Practical Solution Report No. 39, "Accounting and Disclosure under the Transition from the Consolidated Taxation System to the Group Tax Sharing System" (31 March 2020). Accordingly, for items relating 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 for items revised in connection with that transition, the requirements of Paragraph 44 of the Guidance on Accounting Standards for Tax Effect Accounting have not been applied. Deferred tax assets and deferred tax liabilities have instead been measured under the provisions of the tax laws before amendment.」