1. Accounting (ASBJ’s Medium-Term Plan)
The medium-term plan, published recently by the ASBJ, includes three initiatives that are; (1) financial instruments, (2) lease accounting, and (3) insurance contracts, in order for Japanese GAAP to comply with the international norm.
(1) “Financial Instruments” – the ASBJ has decided to initiate developing a standard for the impairment of financial assets, which has already been in discussion, following the steps on IFRS that has been developed in three phases (the classification and measurement, the impairment, and the hedge accounting).
(2) “Lease Accounting” – the development of a standard for lease accounting has already been initiated with a clear focus on all lease assets and liabilities to be on balance sheet items.
(3) “Insurance Contracts” – The ASBJ will deliberate on whether or not to initiate discussions on developing a new accounting standard for overall insurance contracts, while insurance companies in Japan have so far been referring to the Insurance Business Act for the accounting for their insurance business.
2. Tax (Action 14: OECD BEPS – Making Tax Dispute Resolution More Effective)
On September 13, 2022, the OECD has published the Stage 2 Peer monitoring reports for 13 jurisdictions (Aruba, Bahrain, Barbados, Gibraltar, Greenland, Kazakhstan, Oman, Qatar, Saint Kitts and Nevis, United Arab Emirates, Thailand, Trinidad, and Tobago, and Vietnam), while jurisdictions committing to implement a minimum standard to improve the resolution of tax-related disputes between jurisdictions under BEPS Action 14. These reports evaluate the progress made by the 13 jurisdictions in implementing any recommendations resulting from their Stage 1 peer review. Highlights of these reports include that 8 jurisdictions (Bahrain, Barbados, Kazakhstan, Oman, Qatar, Thailand, United Arab Emirates, and Vietnam) have signed the multilateral instrument with the instrument already being ratified by 7 jurisdictions except Vietnam.
3. Labor Management (Childcare at Birth Leave for Fathers)
Separately from the conventional childcare leave, a new childcare leave system, childcare at birth leave, is set to become effective on October 1, 2022, which entitles those workers who do not take postnatal leave but take care of an infant at the age of eight weeks or younger in principle. Those workers whose spouse is a full-time homemaker are also entitled to take childcare at birth leave. While childcare at birth leave is mainly intended for male workers, it also entitles those female workers with an adopted child to take a leave.
Employers must introduce the childcare at birth leave system preliminarily and take necessary measures including establishing or amending work rules (mandatory). Under the childcare at birth leave system, workers are entitled to take a leave of up to four weeks (28 days) within eight weeks after their child’s birth. The leave can be taken in one or two installments, however, the leave request for the two installments should be made collectively, as employers are allowed to reject when the second request is made for the single childcare leave. In addition, a labor-management agreement must be concluded in order to have workers work during their childcare at birth leave within the scope of the agreement.
(Source: Ministry of Health, Labour and Welfare – Pamphlet “Outline of Revisions for 2021 on Childcare/Caregiver Leave Act and Employment Insurance Act”)
4. This Month’s Words of Wisdom
It is because the blossoms scatter that they are splendid.
In this world of sorrow, that lasts long?
The following is an excerpt from the commentary by Peter J MacMillan (literal translation);
The aesthetics of “Cherry blossoms are fugacious. The fugacity inspires beauty.” is extremely Japanese.
In the West, beauty is considered to be eternal and universal. Western aesthetics holds that humans are imperfect and mortal, but beauty is perfect and immortal, like God.
Art such as the music by Mozart and the Mona Lisa is also considered to be eternal and immortal.
Let us take an example. We can find lines;
So long as men can breathe or eyes can see, So long lives this, and this gives life to thee,
in Shakespeare’s famous Sonnet 18 starting with “Shall I compare thee to a summer’s day!”
This sonnet has been read for 400 years after Shakespeare’s death.
This means “thy” beauty sung in the sonnet lives forever.
For more details, please refer to Nagamine & Mishima JC Accounting K.K.