1. Accounting (Source: “Keiei Zaimu Magazine”)
According to a survey conducted by Teikoku Data Bank (TDB) in February this year (4,255 companies were surveyed with a collection rate of 34.7%), there are 557 companies considering an IPO (Initial Public Offering). Of these 557, 28 companies (5%) indicted they are considering listing in overseas markets, such as Hong Kong, Singapore, South Korea, etc.
Given the recent rapid growth in the market for smart-phones and mobile-phone games, it is not surprising that 132 of the 557 companies considering an IPO (23.7%) fall within the Information Services space. Of the remaining companies, there are 381 companies (nearly 70%) that indicated they are seeking to go public domestically on TSE Mothers* and JASDAQ in Japan. It is also interesting that 281 companies (more than half of the companies that indicated they are considering an IPO) answered ‘Undetermined’ when asked about the exact schedule – a possible indication of uncertainty caused by recent events, such as the 3.11 Earthquake Disaster and the European debt crisis.
*TSE Mothers: Tokyo Stock Exchange, Market of the high-growth and emerging stocks
2. Taxation (Source: Weekly Digest, issued by Zeimu Kenkyukai)
As a part of the Tax System Revision, the Overseas Property Record System will take effect from 2013 (Heisei 25) in Japan. The system prescribes that everyone (Japanese residents) whose overseas property is valued more than JPY 50,000,000 (fifty million yen) in total as at December 31st, 2013, is obliged to file a description of the types, quantities, and value of the properties to the Tax Office before March 15th, 2014. Any fake statement or non-submission will be subject to an imprisonment of up to one year or a fine of not more than JPY 500,000 (fifty thousand yen).
Generally the total value as at December 31st, 2013 means the real market price, but the details of valuation method may be covered in future notifications from the government.
Airline Mileage Services
3. Labor management （Airline Mileage Services）
Most companies use airlines for business trips. Do employers have authority to control the miles earned by employees on business trips, and to for example request that the employee apply them for future business trips? Should travel expenses be reimbursed to employees if they have used flight tickets earned as mileage awards? Let’s think about those points from a labor point of view.
First of all, let’s look at some of the regulations that define mileage services. Of course such services vary slightly depending on the airlines, but the general terms and conditions for mileage service membership registration include:
1. Membership is limited to individual customers only.
2. One mileage account is permitted for each member.
3. All claims for mileage accrual and redemption must be made by the registered member in person.
4. Accumulated mileage must not be transferred to a third party. Flight tickets earned as awards may be used by members and member’s family members within certain generations only.
5. Members are not permitted to resell or exchange awards for profits.
Considering the restrictions of membership listed above, an employer who is a juridical person is not eligible for a membership in the first place. Even if the employer is a sole proprietor, miles earned by an employee acting on their behalf cannot be accumulated or transferred to the employer’s account. In addition, an individual employee cannot have two separate accounts for business and private use.
One of the possible ways for an employer to manage its employees’ miles as company’s mileage is to calculate how many miles were earned on flights and to then instruct their employees to claim award flight tickets to be used for their business trips before such miles expire.
Legally speaking, such instructions from an employer (obliging employees to report the number of miles earned and instructing them to claim award travel at a later date for business travel) should not cause any problems since such miles were earned on flights at the company’s expense.
Next, let’s consider the case where an employee has used an award flight ticket which was earned privately for a business trip.
Travel expense reimbursement policy may be established at the discretion of the company. In general, the policy clarifies which routes and means of transportation should be considered reasonable and economical, and employee travel expense reimbursement would be limited to these actual costs. Through this policy, the company does not intend to grant any economic benefits to the employees outside of their prescribed daily allowance for a business trip. Even if the policy does not clearly state that the reimbursement is limited to the actual cost, it can still be interpreted as indicating so unless there is a provision stating “reimbursement is not limited to the actual cost”.
Therefore, in terms of the company policies, it is not a problem for the employer not to reimburse travel expenses when the employee used his/her private miles to purchase a flight ticket for a business trip, since the employee did not spend money out of his/her pocket.
While many companies are positively considering taking advantage of mileage services for cost reduction, many others choose not to do so because of the restrictions on application period, seat availability, reservation changes, etc.
4. This Week’s Words of Wisdom
The most useful things are not told by the one who speaks the most often. (Chinese Proverb)
As you know, the most eloquent speaker does not necessarily mean that they will be considered the most competent. I think this is true regardless of time and location.