1. Accounting (Source: “The Nikkei”)
Accounting Standards Board of Japan held “Working Group for Endorsement of IFRS’s”, and they began considering creating a Japanese IRFS by partially modifying the global IFRS criteria and also began the study of accounting on an individual basis. Of the accounting treatment in the difference between both systems, the matters include depreciation of goodwill, development cost recorded as asset, and recycling of added gain or loss from sales of investment securities into net profit and loss. Japanese IFRS guidelines are intended to be brought to completion in a year. However, it is predicted that only limited items will be modified since any further revision might not be accepted as IFRS by global investors.
2. Taxation (Source: Tokyo High court)
Joint Tenancy is a legal arrangement which is widely used by Japanese people when they purchase properties in some states like Hawaii. This is a way for a married couple to share ownership of condominiums they purchase (own it together without specifying proportion of the ownership = joint tenancy). It allows the property rights to pass automatically to the other spouse when one of them dies. This form has been selected because of its convenience in that it doesn’t require a probate in the US. (Probate is very time-consuming).
Nonetheless, it should be carefully noted that the wife will be liable to pay gift tax in case her husband alone paid the full amount of the purchase price of the condominium in the joint tenancy arrangement. Such a case would be recognized as a gift under Japanese tax laws in that the husband gave his wife his half of the property. Regarding this issue, Tokyo High Court handed down a clear ruling on 10th October 2013. Most of the local real estate agents don’t explain it, and also Japanese people are likely to forget about the fundamental principle of taxation in Japan when they are overseas, especially in a paradise on earth like Hawaii. It is treated as donation when assets are transferred without any compensation even between wife and husband. Therefore, joint tenancy should be very carefully exercised since it has caused many tax troubles.
3. Labor Management(Labor Contract and Supplementary Obligations）
A labor contract must be concluded between a worker and an employer by agreement on an equal basis, and contract conditions are stipulated by law. An employer (company) and a worker who have concluded a labor contract have various obligations towards each other in addition to the actual contractual obligations. These are called “supplementary obligations”.Therefore, it is not true that all an employer has to do is to pay salary, or that workers are free to do anything as long as they are doing their jobs.
An Employer’s supplementary obligations in labor contracts include the following:
1. Employer’s liability: Responsibilities for damages or harm caused by a tortious act committed by a worker in the course of employment.
2. Obligations of considering safety: Responsibility to provide workers with a working environment which secures their safety and health.
3. Obligations of considering working environment: Responsibilities to prevent sexual harassment, power harassment, etc. in the workplace.
4. Prohibition of abuse of rights: Prohibition of abuse of authority on dismissals, equal treatment of workers, etc.
5. Compliance with principle of good faith: An employer must uphold workers’ rights and perform obligations in good faith.
A Worker’s supplementary obligations in labor contracts include the following:
1. Obligations to give undivided attention to duty: A worker must devote him/herself to given duty during work hours.
2. Obligations to maintain order within the company: A worker must not disturb order within the company by inappropriate behavior.
3. Obligations of self-care: A worker must strive to maintain good health in daily life in order to provide quality service.
4. Obligation of confidentiality: A worker must not disclose any secret information obtained during the course of employment.
5. Compliance with principle of good faith: A worker must exercise rights and perform obligations in good faith.
Although some of these supplemental obligations are not clearly stated in law, they are considered as substantial norms that have been established by court precedents. Therefore, employers are required to comply with those obligations. What about workers obligations? Generally, companies stipulate rules on “service disciplines” and “disciplinary actions” in their Rules of Employment by applying those obligations to workers’ behavior in the workplace. If a worker breaches those “disciplines”, it means that the worker has failed to perform his/her obligations in good faith or disturbed the order within the company. Consequently, the worker is subject to “disciplinary actions”.
It is important for both employers and workers to observe labor contracts on an equal basis, and exercise their rights and perform their obligations in good faith.
For more information, please contact our HR Consulting Group.
4. This Week’s Words of Wisdom (Source: 100 words in the world)
Ninety-nine percent of failures come from people who have the habit of making excuses.
(George W. Carver)
I have been trying not to say two words these days – “excuse” and “that is hard.”
These two words seem magical in their effectiveness for one to shirk responsibilities, but using them always makes matters worse. “That is hard” not to say these two, but I will do my best to stop anyway.