November featured business affairs

1. Accounting (Discussions at ISSB)

The ISSB (International Sustainability Standards Board) has published Exposure Draft IFRS S1 “General Requirements for Disclosure of Sustainability-related Financial Information” (Draft on IFRS S1) and Exposure Draft IFRS S2 “Climate-related Disclosures” (Draft on IFRS S2) on March 31, 2022.
According to the ISSB, each of the drafts on IFRS S1 and IFRS S2 has received approximately 700 comment letters which are being analyzed, and the ISSB will redeliberate to finalize the drafts.
Huge responses have been observed with each of the drafts receiving comment letters of around 700.

2. Tax (Tax Reform FY2023 – METI Requesting a Revision on CFC Rules)

On August 31, 2022, the Ministry of Economy, Trade and Industry (METI) compiled its requests to the Ministry of Finance (MOF) concerning the tax reform plan for FY 2023, where METI made a request for revising the Controlled Foreign Corporation (CFC) rules.  It is expected that, if Japan will implement the Global Minimum Effective Tax Rate agreed on in October 2021 under the OECD/G20 Inclusive Framework on BEPS, companies may face significant increase of clerical works to carry out.  In view of this, the METI requested to simplify the current CFC rules so as to reduce such clerical burden on companies after the implementation of the global minimum effective tax rate.

3. Labor Management (Revised Minimum Wages)

The revised minimum wages become effective in October 2022.
The minimum wage applies to all workers regardless of their employment status. Therefore, it is necessary for employers to confirm that all employees are paid at the rate which is not below the minimum wage. The wages subject to the minimum wage are the basic wages paid monthly, however items such as overtime pay, commuting allowance, perfect attendance allowance, and family allowance are excluded.
For the employees paid monthly, the following formula can be used to derive their hourly rate.

Monthly pay ÷ the average scheduled working hours per month

The below illustrates the minimum hourly rates in some regions, and the revised minimum wages in the listed four prefectures have become effective on October 1, 2022.

Tokyo:       JPY 1,041 → JPY 1,072
Kanagawa:  JPY 1,040 → JPY 1,071
Chiba:       JPY  953 → JPY  984
Osaka:      JPY  992 → JPY 1,023

You can find the information on the revised minimum wages by region and their effective dates on the website of the Ministry of Health, Labour and Welfare.
(Source: Ministry of Health, Labour and Welfare – Special website on Minimum Wages)

4. This Month’s Words of Wisdom

A desire dominates us as soon as it’s something more than a simple need, or sometimes is still a simple need.
But none of us know how we can feel fulfilled.
It is simply because we are designed to always desire something.
We want what others possess that is something we feel we don’t but others do.
(Rene Girard)

I would say that, based on his view, capitalism is a result of people seeking for the desire, not the source of it, and the mechanism of capitalism is extremely consistent with our nature that drives us to always seek for the desire.

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

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