1. Accounting(Revision to Practical Issues Task Force No. 18)
The Accounting Standards Board of Japan (ASBJ) is deliberating the revision of the revised Practical Issues Task Force (PITF) No. 18 Practical Solution on Accounting for Unification of Accounting Policies Applied to Foreign Subsidiaries for Consolidated Financial Statements. With regard to non-re-cycling process of gains or losses recognized in other comprehensive incomes of equity investments, whether or not appropriate adjustments are required on the consolidation process when a parent company prepares its consolidated financial statements in cases where a foreign subsidiary apply International Financial Reporting Standards (IFRS), is being discussed.
In addition to the above, the ASBJ is also deliberating whether or not to revise Practical Solutions to allow a parent company to apply PITF No.18 Practical Solution on consolidated financial statements in cases where a parent company applies Japanese GAAP but its Japanese subsidiary applies IFRS. The ASBJ set a goal of finalizing the revision by March 2017, and will continue to discuss it until then.
On August 25, 2016, the Government of Japan signed an agreement for an exchange of information relating to tax matters with the Government of the Republic of Panama. Due to this, the exchange of information between tax authorities for all taxes levied on or after January 1, 2013 will be carried out. In more concrete terms, the Japanese National Tax Authority will be able to obtain details about financial and security accounts held by and transactions made by Japanese nationals in Panama. This is the first information exchange agreement signed by the Government of the Republic of Panama, which has always been thought to be reluctant to disclose financial information. It attracts attention whether or not the Republic of Panama will be actively complying with international standards to prevent international tax evasion in future.
3. Labor Management(Revision of Minimum Regional Wages)
The regional minimum hourly wage rates were revised and came into effect from October 1, 2016. The nationwide weighted average of regional minimum hourly wages was 823 yen (increased by 25 yen compared to the previous fiscal year), which is the biggest increase since fiscal year 2002 when minimum wages began to be indicated by hourly rates.
The minimum wage is divided into 2 categories; regional minimum wages and minimum wages for specific industries. If a worker is subject to both of these minimum wages, then whichever wage is higher is applied. Employers need to be careful that the minimum wage considers the monthly basic salary only and does not include; extraordinary wages (marriage allowance, etc.), wages which are paid periodically for a period exceeding 1 month (bonus, etc.), premium wages for overtime work, work on holidays and late-night work, allowance for good attendance, commuting allowance and family allowance. (Source: Website and press release from August 2016, the Ministry of Health, Labor and Welfare)
4. This Week’s Words of Wisdom
“Anger begins in folly, and ends in repentance.” (Pythagoras, self-motivational quotes selected by Masaru Sato)
Trying to mend a relationship with someone who you targeted with your anger can be tough or even impossible. Is the difference between being an adult and a child our ability to control our emotions?
The referring page is Nagamine & Mishima JC Accounting K.K.