1. Accounting (Source:“Keieizaimu Magazine”)
When operation or business is suspended due to planned electric power outage caused by the Great East Japan Earthquake, some fixed costs incurred during that period would not be treated as costs of goods. In that case, they are recorded as extraordinary loss. On the other hand, Japanese Cost Accounting Standards list the following items as “decreasing in value unrelated to management purposes” in an unusual but not extraordinary circumstances as well as “decreasing in value due to an extraordinary circumstances” such as an earthquake disaster. (Cost Accounting Standards 5.1.1)
1. Depreciation, administration and tax expenses related to the following assets
(1) Investments such as real estate, securities and loans
(2) Non-operated fixed assets
(3) Equipments suspended for a long term
(4) Other assets unrelated to management purposes
As considering the materiality of depreciation expense, it is necessary to carefully examine the balance with actual practices whether the operation or business suspension due to the planned electric power outrage applies to (3).
2. Taxation (Source: “Zeimu Tsushin Magazine”)
According to “the Current State of Corporate Enterprise in 2009” released by National Tax Agency, 72.8% of 2.62 million companies (include both listed and unlisted companies) whose fiscal year ended from April 1, 2009 to March 31, 2010 are deficit-ridden corporations, which is the highest in record.
3. This Week’s Words of Wisdom
“You can only become what you aim to become, but not be always blessed with good deal. However you will never become what you want to be without the will.”
(Charles de Gaulle)
Mr. Konosuke Matsushita and Mr. Kazuo Inamori also give similar remarks.
Top people in finance or politics have the same goal after all.
When the current “Mammonism” economic trend calms down a little more, such personal criticism will be well known to everybody.