1. Accounting (Source: “Keiei Zaimu Magazine”)
Traditionally, listed companies have been required to disclose their earnings forecast as the first item of the Earnings Summary. However, the Tokyo Stock Exchange (TSE) has recently announced a policy review of the handling of the earnings forecast. The review is in response to changes in the situation of listed companies and aims to provide flexibility to companies for how they disclose their earnings forecast. Until now, the disclosure was expected to include sales and profit forecasts on a half-year and annual basis in tabular presentation. This review by the TSE will now allow listed companies to display projections only for those periods that the company desires to disclose (i.e. only Q1 or Q2, or only annual projections, etc.) and will also allow companies to present the data not only in a tabular format but also in a format of their choice. Additionally, quarterly projections will be able to be displayed using a range of values instead specific figures.
2. Taxation (Source: Q&A in website of the National Tax Agency )
It is important to note that an increase of a director’s remuneration during the course of a fiscal year will not be treated as fixed amount periodical compensation as a general rule and as such will not be deductible for tax purposes. There are however certain exceptions to this rule which would allow a change in the amount of remuneration to be considered deductible for tax purposes. These exceptions include: a change in amount made within the first 3 months of a fiscal year (when due to a resolution made by a shareholders meeting or compensation committee) or a change in amount made because of a change in the position or responsibility of the director.
A reduction in the amount of a director’s fixed monthly remuneration will result in only the reduced amount being deductible for tax purposes across the whole fiscal year unless such change satisfies certain conditions. These conditions include: change within the first 3 months of a fiscal year (when due to a resolution made by a shareholders meeting or compensation committee), a change in the position or responsibility of the director, or a change resulting from a significant deterioration of the company’s financial condition. The significance of the deterioration can be established through financial data, such as the company’s sales or ordinary income.
3. This Week’s Words of Wisdom
Wealth is the slave of a wise man, the master of a fool.
( Lucus Annaeus Seneca, Roman Stoic philosopher, statesman )
Most Japanese seem to have degenerated into fools by placing a high significance on money these days. Why has it become this way? According to the recently passed scholar Komuro Naoki, who possessed infinite wisdom, all causes can be found in the postwar Constitution.