December featured business affairs

1. Accounting(Additional developments in the new revenue recognition standards)

On October 30, the ASBJ published a draft of the “Accounting Standard for Revenue Recognition”.
The following matters related to the presentation of revenue recognition were to be considered by the time the 2018 accounting standards were to be applied.
1) Presentation of the revenue account name
2) Whether it is necessary to separately present revenues from financing factors (interest incomes or expenses)
3) Whether it is necessary to separately present contractual assets and receivables.

Regarding 1), it is proposed that contractual assets are separately disclosed from receivables arise from contracts with customers on the balance sheet, or if not separately disclosed on the balance sheet, the respective balances are included as notes.
Due to the introduction of the concept of “contractual assets”, assets, which are differ from receivables previously reported, are accounted so that care must be taken.

2. Tax(Income tax on foreign property)

According to the report of the Government’s Research Committee on Tax System, which was announced on September 26, 2019, based on the understanding that it is difficult to grasp properly taxpayers’ income earned from foreign businesses and investments under the current Japanese executive jurisdiction of tax administration, it points out that a system  is necessary which has taxpayers disclose adequately the status of their businesses or properties in foreign countries also at the timing of tax investigation. It is expected that future discussions regarding revisions to the tax system will include such topics as mandatory information disclosure requests in tax examinations and additional penalties for tax avoidance related to undisclosed assets.

3. Labor Management (Employers’ Obligation to Monitor Employees’ Working Hours for Face-to-Face Guidance)

Effective April 1, 2019, the measures for securing health of long-working workers (face-to-face guidance by industrial doctors) under the Article 66-8 of the Industrial Safety and Health Act was reinforced. In order to conduct the face-to-face guidance properly, employers are required to monitor employees’ working hours by objective and appropriate measures such as time sheets, log-in/log-out records of PCs, etc. Additionally, employers must retain those records for 3 years. These new rules apply to all workers except for high-level professionals, including supervisors and workers under the Discretionary Working System.(Resource: “To Employers, industrial doctors and those who engage in industrial health”, the Ministry of Health, Labor and Welfare)

4.  This Month’s Words of Wisdom

To achieve great things, two things are needed; a plan, and not quite enough time.
(Leonard Bernstein)

A remake of West Side Story will be released next year, but these words left by a famous American conductor are highly suggestive of the Olympic marathon event that was recently moved to Sapporo. What have you been doing these past 4 years?

For more details, please refer to Nagamine & Mishima JC Accounting K.K.

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