1. Accounting (Source: “Keiei Zaimu Magazine”)
According to the survey by Tokyo Shoko Research, leading manufacturers are for the most part assuming an exchange rate in the 80-yen range. The survey further revealed that 244 of 433 leading manufacturers (56.3%) in the first and second sections of the TSE booked foreign exchange losses in Q1 of the fiscal year ending March 2012. The total amount of the foreign exchange losses recorded was 63.77 billion yen for the 203 companies in the first section and 3.3 billion yen for the 41 companies in the second section of the TSE. Nissan Motor’s loss of 6.01 billion yen was the highest foreign exchange loss amongst the 244 companies. The industry’s exposure to foreign exchange risk was reflected by the fact that three of the five highest foreign exchange losses belonged to car manufacturers.
In comparison to the foreign exchange losses seen in the same period last year (208.8 billion yen), a period which saw rapid appreciation of the Japanese yen, the total of foreign exchange loss has decreased. However, if the current situation continues, companies may increasingly consider moving operations overseas for cost savings (in addition to concerns about risks related to deindustrialization and the worsening employment situation in Japan). On the other hand, domestic companies planning overseas acquisition have very much appreciated the strength of the yen.
2. Taxation (Source: “Zeimu Tsushin Magazine”)
The Tokyo District Court ordered that Limited Partnerships (LPS) established in Delaware, U.S.A. do not equate to a “corporation” according to the Japanese Tax Laws Act. As such, real estate related losses in this case should be included in the member’s income calculation.
The District Court’s opinion is based on whether or not the entity is granted corporate status under foreign laws. In this case, according to the Delaware LPS laws, the LPS is not considered a “corporation” and therefore the LPS does not receive corporate status under domestic tax law.
This case is pending in the Tokyo High Court.
3. This Week’s Words of Wisdom
“FLOWERS NEVER BEND WITH THE RAINFALL”
(Lyrics by PAUL SIMON)
It’s no matter if you’re born
To play the King or pawn
For the line is thinly drawn ‘tween joy and sorrow,
So my fantasy
And I must be what I must be and face tomorrow.
So I’ll continue to continue to pretend
My life will never end,
And flowers never bend
With the rainfall.
When I heard that Paul Simon performed “Sound of Silence” at the 9/11 memorial ceremony, I remembered this song.
I think the lyrics to this song have a very touching sensitivity.