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1. Accounting (Proposed amendments to Japan’s Modified International Standards (JMIS))
The ASBJ carried out an endorsement process on mainly IFRS 15 “Revenue arising from contracts with customers” and a new JMIS was published on June 20. In consideration of the indications heard while referring to the discussions of the standard development efforts at ASBJ, the following considerations were made:

(1) Application of the concept of ‘transfer of control’ to construction contracts
(2) Disclosures (notes)
(3) Other items (cost recovery method and the accounting for the sale of assets other than inventories (such as fixed assets)).

For the requests on the above all, the ASBJ has proposed not taking the option of “elimination or modification” or has not considered as an item to be discussed about the necessity of “elimination or modification.

2. Tax
On 7th June 2017, the signing ceremony of the multilateral instrument on the implementation of BEPS (Base Erosion and Profit Shifting) prevention measures was held in Paris, and 76 countries, including Japan, signed or announced their participation in this treaty. The following four measurements for preventing BEPS are in the scope of this multilateral instrument:

(1)ACTION 2: Neutralizing Hybrid Mismatch Arrangements 
(2)ACTION 6: Preventing the Granting of Treaty Benefits in Inappropriate Circumstances 
(3)ACTION 7: Preventing the Artificial Avoidance of Permanent Establishment Status 
(4)ACTION 14: Making Dispute Resolution More Effective.

Every country participating in this multilateral instrument can decide arbitrarily the following;
a) which existing tax treaty(ies) concluded between contracting party of this multilateral instrument should be covered by this multilateral instrument, and

b) which item(s) of the measurement above should be applied to the existing tax treaty(ies).

Among the OECD member countries, only the United States has neither signed nor expressed their intention to participate in this multilateral instrument.

3. Labor Management (The Valid coverage period for pension eligibility will be reduced)
The Japanese pension law was amended and the minimum valid coverage period for old age pension eligibility, which is currently 25 years including the periods you have contributed and you are exempt from paying contributions, will be reduced to 10 years effective from August 1, 2017.

The Japan Pension Service will send the pension claim form (for the reduced coverage period) in a yellow envelope to the relevant individuals when they are qualified.

If you have contributed to any pension plan in other countries which signed the International Social Security Agreement with Japan, you should check your eligibility with the Japan Pension Service because you may still qualify for the Japanese pension by totalizing your coverage periods in those countries and Japan even if your valid coverage period in Japan is less than 10 years.(Source: Japan Pension Service leaflets “Application Procedures for Japanese Pension Benefits” “Have you ever lived in Japan?”)

4. This Week’s Words of Wisdom
Power tends to corrupt, and absolute power corrupts absolutely.
(John Emerich Edward Dalberg, Lord Acton)

The latest case in point is the historic defeat of Japan’s Liberal Democratic Party (LDP) in Tokyo assembly race. I think that no comment is required in this case.

The referring page is Nagamine & Mishima JC Accounting K.K.

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