Committee Resolution on Valuation and Accounting of Investment Trust
Properties
Established on March 19, 2004
Revised on July 8, 2004
Revised on November 11, 2004
Revised on March 15, 2005
Revised on November 10, 2005
Revised on March 9, 2006
Revised on May 11, 2006
Revised on June 8, 2006
Revised on July 13, 2006
Revised on October 12, 2006
Revised on January 11, 2007
Revised on March 9, 2007
Revised on June 14, 2007
Revised on September 21, 2007
Revised on September 11, 2008
Revised on March 19, 2009
Revised on January 14, 2010
Revised on April 14, 2011
Revised on September 19, 2019
Revised on April 9, 2020
Revised on September 10, 2020

This committee resolution provides for matters delegated to the Self-Regulation Committee with respect to thevaluation and accounting of investment trusts.

Article 1

The value calculated by the calculation method established by the Self-Regulation Committee

as prescribed in Article 2 of the By-laws for Rules for Valuation and Accounting of Investment Trust Properties(hereinafter referred to as the “By-laws”) shall be the value calculated by the following method:

1.

Old Stocks and New Stocks when stock subscription warrants for New Stocks have expired (hereinafterreferred to as “Ex-rights”)(1)

Old Stocks(a) In the event of paid-in capital increase (including parallel capital increase. The same shall apply
hereinafter. )Final price of Old Stocks(with rights)+

Payment per New
Stock

1 + Allotment rate of paid-in quantity per Old Stock(Note)x+

New Stock allotment rate of thepaid-in quantity per Old Stock1- 1
Split rate(i) The final market price of Old Stocks (with rights) shall be the closing price at theexchange on the last day with rights.
(ii) When one share is divided into 1.2 shares, the split rate shall be 1/1.2 (same hereinafter).
(b) In the event of a stock split
Final price of Old Stocks (with rights) x split rate

(c) Allotment of shares without contribution (limited to cases where shares of the same class as suchshares are allotted. The same shall apply hereinafter. )Final price of Old Stocks (with rights)
1 + New Stock allotment rate

(2)

New Stocks

Old Stock (Ex-rights) Appraised Value

2.

Shares when the right to demand dividends ceases (hereinafter referred to as “Ex-dividend”)
Final price with dividend - Current forecast dividend(Note)

The final market price with dividends shall be the closing price at the exchange on the lastday with dividends.

3.

Shares subject to simultaneous Ex-rights and Ex-dividends(1)

Old Stocks(a) In the event of simultaneous Ex-rights and Ex-dividends due to paid-in capital increase
Final price of Old Stock(with rights and withdividends)

Estimated distribution
for the period+

Payment per
New Stocks

×

New Stock allotment rateof paid-in quantity per
Old Stock

1 + Allotment rate of paid-in quantity per Old Stock+1
Split rate

-

1

–

(b) In the event of simultaneous Ex-rights and Ex-dividends due to a stock split[Final price of Old Stocks (with rights and with dividends) - forecast dividends for the period] x split
rate(c) In the event of simultaneous Ex-rights and Ex-dividends due to allotment of shares without
contribution
Final price of Old Stocks (with rights) - forecast dividends for the period
1 + New Stock allotment rate

(2)

New Stocks

Appraised Value of Old Stocks (Ex-rights and Ex-dividends)

4.

Shares went Ex-rights for subsidiary stock subscription

Final price of parent
company shares (with rights)–

Market value ofsubsidiary shares–

Payment per
subsidiary share

Number of subsidiary×shares allocated per
parent company share(Note)

The final market price of parent company shares (with rights) and the market value ofsubsidiary shares shall be the exchange closing price for parent company shares andsubsidiary shares on the last day rights are held.

5.

Shares on the purchase and sale commencement date after share consolidation(1)

When the date of purchase and sale commencement of shares after share consolidation is the same as
the date of Ex-dividends(Final price before share consolidation - estimated dividend for the period) ÷ consolidation rate
(Note)(i) The final price before share consolidation shall mean the closing price at the exchange on
the business day immediately preceding the commencement date of sale and purchase of thestock certificates after share consolidation (the same shall apply hereinafter).
(ii) When 2 shares are consolidated into 1 share, the consolidation rate shall be 1/2 (samehereinafter).

(2)

When the date of commencement of purchase and sale after share consolidation differs from the dateof Ex-dividends
Final price before share consolidation ÷ consolidation rate

6.

New Stocks after a merger (in the event of a consolidation-type merger)
Final price of
Old Stocks±

MergerAdjustment
for 1 Such
Old Stock×

Rate of Old
Stocks to 1
New Stockafter a merger+

Final priceof OldStock±MergerAdjustment
for 1 Such
Old Stock×

Rate of Old
Stocks to 1 New
Stock after amerger+…

Number of merged companies(Notes) 1. Figures in parentheses () shall be calculated for each merged company.
2. The merger adjustment shall be deducted in the case of delivered money through amerger and added in the case of payments.
Article 2

The method to calculate the rate specified in Article 7 of the By-laws shall be as follows:

N=B÷A
N: The cross rate on the calculation date of the constant value displaying currency (hereinafterreferred to as “the currency”).
(Round off to four decimal places.)
A: The midpoint price of customer rates on the date of calculation of the currency
B: The midpoint price of customer rates on the calculation date for currencies other than the currency
However, when the currency is Japanese currency, such formula shall not be used, and the
midpoint price of customer rates on the calculation date shall be used.

Article 3

The method of calculating the rate specified in Article 8, Paragraph 1 of the By-laws shall be asfollows:
N=B÷A
N: Cross rate at the reserved delivery date for the calculation date.
A: The midpoint price of futures rates for customers on the reserved delivery date of the currency
B: The midpoint price of futures rates for customers on the date of reserved delivery of currencies
other than the currency
Variables A and B above use the midpoint price published on the same fixed date of the monththat the midpoint price of futures rates for customers is published.
However, when the currency is Japanese currency, such calculation formula shall not be used andthe midpoint price of futures rates for customers on the date of delivery shall be used.
Moreover, N shall be rounded off to the nearest four decimal places (hereinafter the same shallapply in Article 4 below).

Article 4

The calculation method of the value specified in Article 8, Paragraph 2 of the By-laws shall be

as follows:
N = A + {(B - A) ×

n-a
b-a

}

N: Valuation rate on the valuation date of the Reserve Exchanges for such date
A: Cross rate for the date closest to but not after such date
B: Cross rate for the date closest to and after such daten: Number of days from the calculation date to such datea: Number of days from the calculation date to the date announced that is closest to but not after suchdateb: Number of days from the calculation date to the date announced that is closest to and after suchdate
Provided, however, that when the currency is Japanese currency, variables A and B in the above
formula shall be as follows:
A: The midpoint price of futures rates for customers on the day that is closest to but not after suchdate
B: The midpoint price of futures rates for customers on the day that is closest to and after such date
Furthermore, (B - A) shall be rounded off to the nearest four decimal places.

Article 5

The accounting of the matters provided in each item of Article 9 of the By-laws shall be

conducted as stipulated below:
1.

Accounting when converting convertible corporate bonds into shares(a) Timing of accounting
In principle, accounting shall be done on the day the settlor company of an investment trust (meaning asettlor company of an investment trust as defined in Article 2, Paragraph 11 of the Act on Investment

Trusts and Investment Corporations (Act No. 198, 2000) and hereinafter referred to as the “Management
Company”) gives instructions to the trustee company to convert shares.
(b) Accounting Processes(i)

The book value of the convertible corporate bonds for share conversion and the certificates forcorporate bonds with share option (including the certificates for corporate bonds with shareoption set forth in Article 341-3, Paragraph 1, Items 7 and 8 of the Old Commercial Code prior to
the enforcement of the Companies Act) (hereinafter referred to as “Convertible Corporate Bonds,etc.”), which are the property set forth in Article 236, Paragraph 1, Item 3 of the Companies Act
for corporate bonds with share option and for which it is specified in advance that such corporate
bonds and share options may not exist independently, shall be transferred to the book value of theshares.
Moreover, if there is any balance of prepaid expenses related to such conversion, such balance of
prepaid expenses shall also be transferred to the book value of the shares.

(ii) The amount of corporate bonds to be redeemed in cash which cannot be converted into shares at
the time of conversion shall be deducted from the book value of the shares obtained in (i) above
and included in the accounts receivable.
The amount recorded in the accounts receivable shall be transferred to the call loan account ormoney trust account on the date such amount is received.
(iii) Any uncollected amount of interest on such Convertible Corporate Bonds, etc. recorded during
the period up to the date of conversion into shares shall be cancelled on the date of conversion intoshares.

[Journal of Share Conversion Instruction Date]
Stock certificates

11,159,955

Corporate bonds

11,000,00045(Prepaid expenses

160,000)(Interest income-100,000)* Accounts receivable(Accrued interest income-100,000)(Number of shares:

42,553)‐ To be recorded on the date of instruction requesting conversion.
* is the amount of corporate bonds to be redeemed in cash.
‐ Interest income and accrued interest income shall be cancelled.
‐ No entry in ( ) will be made if the conversion effect does not occur by the interest payment
date of the Convertible Corporate Bonds, etc.

2.

Accounting for stock subscription warrants for New Stocks acquired by a tender for rights andunclaimed stocks(1)

Treatment of stock subscription warrants for New Shares(a) Timing of accounting
Shall be on the date of tender.
(b) Amounts, etc. to be recorded as book value
The book value shall be treated as ordinary New Stocks, the amount of which shall be thesuccessful tender price (for premiums) plus commissions and payments, and shall not be accounted
for as stock subscription warrants for New Stocks.
Moreover, payment for New Stocks shall be recorded in payment for outstanding Stocks.
(c) Fees
Said commission shall be the established commission on the successful tender price.

(2)

Treatment of forfeiture of New Stocks(a) Timing of forfeiture
Shall take place on the last day of application for such New Stocks.
(b) Accounting Processes
The unpaid amount of the payment for such New Stocks shall be cancelled and the difference
between the book value of such New Stocks and the unpaid amount of the payment shall betransferred to the book value of the parent shares, and if there are no parent shares, the difference
shall be treated as a loss on securities transactions.

3. Accounting for Sales Securities for Margin Trading
Category
1. Sell Contract

2. Repurchases

Calculations

Account Journal(1) Contract price

Number of new listed shares x new unit price listed

Contract Date

(2) Net priceContract price - listing fee - listing consumption tax - listing transaction tax(3) Sales securities for margin
trading
Margin Transaction Deposit

Net price(4) Guarantee deposits

Cash portion + substitute securities portion(5) Guarantee deposits
Substitute Securities

Substitute securities portion(1) Contract price

Number of shares repurchased x unit repurchase price(2) Deducted fees, etc. (outgoing)
Fees
Consumption tax
Transaction tax(i) Full repurchase
Full balance of sell contract fees, etc.
(ii) Partial repurchase (*1)
Balance of sell contract fees, etc. x

Number of shares repurchased
Number of outstanding sellcontract sharesFees, etc. upon repurchase(4) Right treatment unit price

5. Items corresponding to the Modification of rights (1) Right treatment unit price(5) Settlement amount

Number of shares repurchased x {(sell contract unit price - right treatment unit
price) - unit repurchasing price} - fees, etc.
(Fees, consumption tax, and transaction tax are for sell contracts (outgoing) andrepurchasing (incoming))
Difference > 0……Settlement amount receivable
Difference < 0……Settlement amount payable(6) Deducted margin transaction
deposit(i) Full repurchase
Balance of margin transaction deposit
Number of shares(ii) Partial repurchase
Balance of sell contract price x

repurchased
Number of outstanding sellcontract shares

Sales Securities for Margin Trading:Margin Transaction Deposit: ×××
×××
Gain on Securities Transactions: ×××
Accounts Receivable: ×××(Gains on Settlement)(Settlement Amount Receivable)
Accounts Payable
Loss on Securities Transactions: ×××(Settlement Amount Payable)(Loss on Settlement)
Delivery Date
Call Loans: ×××(Settlement Amount Receivable)
Accounts Payable: ×××(Settlement Amount Payable)
Other Expenses: ×××
Note 1: (Daily interest management
fees, etc.)
Call Loans: ×××(Daily interest management fees,
etc.)

Accounts Receivable: ×××(Settlement Amount Receivable)
Call Loans: ×××(Settlement Amount Payable)
Call Loans: ×××(Daily interest management fees,etc.)
Other Revenue: ×××
Note 2: (Daily interest management
fees, etc.)

Collateral Withdrawal Date
- deducted fees, etc.

(Individually calculated in (*1))(i) If before revaluation, an amount equivalent to the deducted margin transaction
deposit
Number of shares(ii) Partial repurchase after revaluation
Balance of sales securities for margin trading x

Call Loans: ×××(or money trusts)
Guarantee Deposits
Substitute Securities:×××
Contract Date

(3) Fees, etc. (incoming)(8) Settlement loss or gain

Sales Securities for Margin Trading:
×××(Net Price)

Pledge Date
Guarantee Deposits: ×××(Fees, consumption tax, and transaction tax shall be calculated separately.)(7) Deducted sales securities for
margin trading

Margin Transaction Deposit: ×××(Net Price)

repurchased
Number of outstanding sellcontract shares

Deducted sales securities for margin trading - deducted margin transaction deposit+/- settlement amount receivable and payable
Difference > 0……Gains on securities transactions
Difference < 0……Loss on securities transactions

Call Loans: ×××(or money trusts)
Guarantee Deposits
Substitute Securities: ×××

Guarantee Deposits: ×××

Category

3. Actual
DeliveryCalculations(9) Daily interest management fees,etc.
Other Proceeds
Other Expenses

Received daily interest (interest rate) - negative daily interest payable (premiums) administration costs
Note 1: This shall be the total amount of the negative daily interest payable andmargin transaction administration costs.
Note 2: This shall be the amount of the received daily interest.
Note 3: The amounts in both Note 1 and Note 2 shall be offset.
Difference > 0……Other Revenue
Difference < 0……Other Expenses(10) Guarantee deposits

Cash portion + substitute securities portion(11) Guarantee deposits
Substitute Securities

Substitute securities portion(1) Deducted fees, etc. (Outgoing)

Full amount of fees, consumption tax, and transaction tax(2) Right treatment unit

5. Items corresponding to the Modification of rights (1) Right treatment unit price(3) Settlement amount receivable(4) Deducted margin transaction
deposit(5) Deducted sales securities for
margin trading(6) Book value of deducted stock
certificates(7) Settlement loss or gain

Account Journal

Contract Date

Sales Securities for Margin Trading:×××
Number of shares actually delivered x (sell contract unit price - right treatment unit Loss on Securities Transactions: ×××
price) - deducted fees, etc.
(Loss due to revaluation)
Difference……Settlement amount receivable
Accounts Receivable: ×××(Settlement Amount Receivable)
Full amount of balance of margin transaction deposit
Loss on Securities Transactions: ×××(Loss in kind)
Full balance of sales securities for margin trading(i) Number of shares actually delivered = number of shares in kind
Full balance of book value of stock certificates(ii) Number of shares actually delivered < number of shares in kindNumber of shares actually delivered x book value unit price of stock certificates

Margin transaction deposit: ×××
Gain on Securities Transactions: ×××(Gain due to revaluation)
Share certificates: ×××(Book value in kind)
Gain on Securities Transactions: ×××(Gains in kind)

Delivery Date

Call Loans:×××
Accounts Receivable: ×××(Settlement Amount Receivable)(Settlement Amount Receivable)
Deducted sales securities for margin trading - deducted margin transaction deposit
Other
Expenses:
×××
Call
Loans: ×××(loss or gain due to revaluation)
Note 1: (Daily interest management(Daily interest management fees,
Difference > 0……Gains on securities transactions
fees, etc.)
etc.)
Difference < 0……Loss on securities transactions
Other Revenue: ×××
Settlement amount receivable - book value of deducted stock certificates (loss or Call Loans: ×××(Daily interest management fees,
Note 2: (Daily interest management
gain in kind)etc.)
fees, etc.)
Difference > 0……Gains on securities transactions
Difference < 0……Loss on securities transactions(8) Daily interest management fees
Other Revenue
Other Expenses

Received daily interest (interest rate) - negative daily interest payable (premiums) Collateral Withdrawal Dateadministration costs
Call Loans:×××
Guarantee Deposits: ×××
Note 1: This shall be the total amount of the negative daily interest payable and(or money trusts)
margin transaction administration costs.
Guarantee Deposits
Note 2: This shall be the amount of the received daily interest.
Substitute Securities: ×××
Note 3: The amounts in both Note 1 and Note 2 shall be offset.
Difference > 0……Other Revenue
Difference < 0……Other Expenses(9) Guarantee deposits

Cash portion + substitute securities portion(10) Guarantee deposits
Substitute Securities

Substitute securities portionCategory
4. Ex-dividend

Calculations

Account Journal(1) Ex-dividend adjustment amount

Estimated dividend unit price x number of outstanding sellcontract shares x (1 - withholding tax rate)

Ex-dividend Date

(2) Ex-dividend adjustment amount payable

Ex-dividend adjustment amount - ex-dividend adjustment
amount payable
Difference > 0……Other Revenue
Difference < 0……Other Expenses

Other Expenses: ×××(Amount of Ex-dividend
adjustment)

Ex-dividend adjustment amount payable - guaranteed dividend
amountDifference > 0……Other Revenue
Difference < 0……Other Expenses

Other Accrued Expenses: ×××(Amount of Ex-dividend
adjustment)(3) Guaranteed dividend adjustment amount

Other Accrued Expenses: ×××(Amount of Ex-dividend
adjustment)

Payment Date of Amount of Ex-dividend Adjustment

Other Expenses: ×××(Difference)

Call Loans: ×××(or money trusts)(Ex-dividend adjustment amount tobe paid)
Other Revenue: ×××(Difference)

Date of Recording of Guaranteed dividend adjustment amount
Other Expenses: ×××(Guaranteed dividend adjustment
amount)Call Loans: ×××(or money trusts)(Guaranteed dividend adjustment
amount)5. Modificationof Rights

Method by market
quotation revision(1) Right treatment unit
price

Unit price for market quotation revision announced by theexchange on the date of ex-rights(2) Right modification fee

Number of outstanding sell contract shares x right treatment
unit price

Method by revision on number of shares/share price
6. Valuation

7. Revaluation

Call Loans: ×××(or money trusts)(Guaranteed dividend adjustment
amount)Other Revenue: ×××(Guaranteed dividend adjustment
amount)Capital Increase Ex-rights Date
Sales Securities for Margin Trading:
×××(Right Modification Fee)

Margin Transaction Deposit: ×××(Right Modification Fee)If New Stocks are allotted in integer multiples, they shall be treated in the manner prescribed by the exchange, and the above treatment shall not
apply.
Sales securities for margin trading - (outstanding number ofsell contract shares x evaluated unit price)
Difference > 0……Gain on valuation of securities
Difference < 0……Loss on valuation of securities
The open funds will be reevaluated at the fiscal year end.
Gain on valuation of securities……Gain on securities
transactions
Loss on valuation of securities……Loss on securities
transactions

Loss or Gain on Valuation of
Securities: ×××

Date of Settlement of Accounts
Loss on Securities Transactions: ×××
Sales Securities for Margin Trading:
×××

Sales Securities for Margin Trading:
×××
Gain on Securities Transactions: ×××

4. Accounting for Short Selling of Bond Certificates (Excluding Those with Interest)
I. Actual Delivery by Purchase in Kind
Transaction

Account Journal

1. Short Sale Contract Date

August 11
Accounts Receivable

Sales of Securities Borrowed
93,521,935

2. Contract Date for Purchase in Kind

Description
Short selling of interest-bearing government bonds
Contract date: August 11
Delivery date: August 24
Contract face value: 100 million yen
93,521,935 Interest: 3.9%
Interest payment date: June 21 and December 21, twice a year
Contract unit price: 93.55 yen
Contract price: 93,550,000 yen
Transaction tax: 28,065 yen
Accrued interest: 683,835 yen
Delivery price: 94,205,770 yen

August 20
Purchase of the Same Issue
National Government Bond Certificates
Accounts Payable
Delivery date: August 24
93,650,000
93,650,000 Contract date: August 20
Contract face value: 100 million yen
Sales of Securities Borrowed
National Government Bond Certificates
93,521,935
93,650,000 Contract unit price: 93.65 yen
Contract price: 93,650,000 yen
Loss on Securities Transactions
Accrued interest: 683,835 yen
128,065
Delivery price: 94,333,835 yen

3. Delivery Date for Purchase in Kind
(Short Sale Delivery Date)

August 24
Call Loans

Accounts Receivable
94,205,770

93,521,935
Advances Received
683,835

Accounts Payable

Call Loans
93,650,000

94,333,835

Prepaid Expenses
683,835
Advances Received

Prepaid Expenses
683,835

683,835

Transaction

Account Journal

Description

4. Valuation
Loss or Gain on Valuation of Securities-78,065

Evaluated unit price: 93.60 yen
Loss or gain on valuation of securities= Sales of securities borrowed - appraised value= 93,521,935- 93,600,000

5. Revaluation of Accounts for Settlement(Open Type)Sales of Securities Borrowed

Gain on Securities Transactions
The valuation loss or gain on the date of the settlement of accounts shallbe adjusted to the book value of sales of securities borrowed.

Or
Loss on Securities Transactions

Sales of Securities Borrowed

II. Actual Delivery by Borrowing Bond CertificatesTransaction

Account Journal

1. Short Sale Contract Date

August 11
Accounts Receivable

Sales of Securities Borrowed
93,521,935

2. Date of Conclusion of Loan Agreement

Description
Short selling of interest-bearing government bonds
Contract date: August 11
Delivery date: August 24
Contract face value: 100 million yen
93,521,935 Interest: 3.9%
Interest payment date: June 21 and December 21, twice a year
Contract unit price: 93.55 yen
Contract price: 93,550,000 yen
Transaction tax: 28,065 yen
Accrued interest: 683,835 yen
Delivery price: 94,205,770 yen

No treatment
Borrowing of the Same Issue
Loan date: August 24
Repayment date: August 30
Loan face value: 100 million yen
Loan unit price: 93.75 yen
Loan amount: 93,750,000 yen

3. Loan Issue Date
(Short Sale Delivery Date)

August 24
Borrowing Trade Securities

Securities Borrowed
93,750,000

Call Loans

93,750,000
Accounts Receivable

94,205,770

93,521,935
Advances Received
683,835

Transaction

Account Journal

4. Calculating Interest Expenses

Description

August 25 - August 30
Interest Expense

Accrued Interest Expenses

Equivalent to the method of calculating accrued interest income on bond
10,684 certificates

10,684

5. Contract Date for Purchase in Kind

Purchase of the Same Issue
Contract date: August 26
Delivery date: August 30
Contract face value: 100 million yen
National Government Bond Certificates
Accounts Payable
93,850,000
93,850,000 Contract unit price: 93.85 yen
Contract price: 93,850,000 yen
Sales of Securities Borrowed
National Government Bond Certificates
93,521,935
93,850,000 Accrued interest: 747,945 yen
Delivery price: 94,597,945 yen
Loss on Securities Transactions
328,065
August 26

6. Repayment Date of Borrowed Bond Certificates

August 30
Accounts Payable

Call Loans
93,850,000

Prepaid Expenses

Prepaid Expenses
747,945

94,597,945 * Treatment of deposits for borrowed bond certificates and bondborrowing commission, etc. shall correspond to accounting for borrowed
747,945 bond certificates.

Accrued Interest Expenses
64,104
Advances Received
683,835
Interest Expense
6
Securities Borrowed

Borrowing Trade Securities
93,750,000

7. Interest Deposit

93,750,000

Interest Payment Date
Accrued Interest Expenses
XXX,XXX
Advances Received
XXX,XXXInterest Expense
XXX

Call Loans(Amount equivalent to interest)

If there is any interest payment date between the date of delivery of salesof securities borrowed and the date of repayment of borrowed bondcertificates, an amount equivalent to the interest shall be paid to thelender.

5. Accounting for Short Selling of Bond Certificates (If with Interest)
I. Actual Delivery by Purchase in Kind
Transaction

Account Journal

1. Short Sale Contract Date

August 11
Accounts Receivable

Sales of Securities Borrowed
94,205,770

2. Contract Date for Purchase in Kind

Description
Short selling of interest-bearing government bonds
Contract date: August 11
Delivery date: August 24
Contract face value: 100 million yen
94,205,770 Interest: 3.9%
Interest payment date: June 21 and December 21, twice a year
Contract unit price: 93.55 yen
Contract price: 93,550,000 yen
Transaction tax: 28,065 yen
Accrued interest: 683,835 yen
Delivery price: 94,205,770 yen

August 20
Purchase of the Same Issue
National Government Bond Certificates
Accounts Payable
Delivery date: August 24
94,333,835
94,333,835 Contract date: August 20
Contract face value: 100 million yen
Sales of Securities Borrowed
National Government Bond Certificates
94,205,770
94,333,835 Contract unit price: 93.65 yen
Contract price: 93,650,000 yen
Loss on Securities Transactions
Accrued interest: 683,835 yen
128,065
Delivery price: 94,333,835 yen

3. Delivery Date for Purchase in Kind
(Short Sale Delivery Date)

August 24
Call Loans

Accounts Receivable
94,205,770

94,205,770
Call Loans
94,333,835

Accounts Payable
94,333,835

Transaction

Account Journal

Description

4. Valuation
Loss or Gain on Valuation of Securities-78,065

Evaluated unit price: 93.60 yen
Loss or gain on valuation of securities= Sales of Securities Borrowed - (appraised value + accrued interest +interest payable)= 94,205,770 - (93,600,000 + 683,835 + 0)

The valuation loss or gain on the date of the settlement of accounts shallbe adjusted to the book value of sales of securities borrowed.

5. Revaluation of Accounts for Settlement(Open Type)Sales of Securities Borrowed

Gain on Securities Transactions

Or
Loss on Securities Transactions

Sales of Securities Borrowed

II. Actual Delivery by Borrowing Bond CertificatesTransaction

Account Journal

1. Short Sale Contract Date

August 11
Accounts Receivable

Sales of Securities Borrowed
94,205,770

2. Date of Conclusion of Loan Agreement

Short selling of interest-bearing government bonds
Contract date: August 11
Delivery date: August 24
Contract face value: 100 million yen
94,205,770 Interest: 3.9%
Interest payment date: June 21 and December 21, twice a year
Contract unit price: 93.55 yen
Contract price: 93,550,000 yen
Transaction tax: 28,065 yen
Accrued interest: 683,835 yen
Delivery price: 94,205,770 yen
Borrowing of the Same Issue
Loan date: August 24
Repayment date: August 30
Loan face value: 100 million yen
Loan unit price: 93.75 yen
Loan amount: 93,750,000 yen

No treatment

3. Loan Issue Date
(Short Sale Delivery Date)

Description

August 24
Borrowing Trade Securities

Securities Borrowed
93,750,000

Call Loans

93,750,000
Accounts Receivable

94,205,770

94,205,770

Transaction
4. Contract Date for Purchase in Kind

Account Journal

Purchase of the Same Issue
Contract date: August 26
Delivery date: August 30
National Government Bond Certificates
Accounts Payable
Contract face value: 100 million yen
94,597,945
94,597,945 Contract unit price: 93.85 yen
Sales of Securities Borrowed
National Government Bond CertificatesContract price: 93,850,000 yen
94,205,770
94,597,945 Accrued interest: 747,945 yen
Loss on Securities Transactions
Delivery price: 94,597,945 yen
392,175* If there is any interest payment date before the in-kind delivery date,
only an amount equivalent to the interest shall be deducted throughreduction of the book value of sales of securities borrowed.

5. Repayment Date for Borrowed Bond Certificates* Treatment of deposits for borrowed bond certificates and bondborrowing commission, etc. shall correspond to accounting for borrowedbond certificates.

August 30
Accounts Payable

Call Loans
94,597,945

Securities Borrowed

94,597,945
Borrowing Trade Securities

93,750,000
6. Interest Deposit

Description

August 26

93,750,000

Interest Payment Date
Accrued Interest Expenses(Amount equivalent to interest)

Call Loans(Amount equivalent to interest)

If there is any interest payment date from the date of delivery of the salesof securities borrowed until the date of repayment of the borrowed bondcertificates, the book value of the sales of securities borrowed shall beamended at the same time as payment to the lender of an amountequivalent to the interest.

6. Accounting for Borrowed Shares
Transaction

Account Journal

1. Date of Conclusion of Loan
Agreement

No account processing

Description
Example) Borrowing of stock certificates
Date of conclusion of loan agreement: September 10
Loan issue date: September 12 Repayment date: Not
normally specified
Number of borrowed shares: 10,000
Conclusion date units: 510 yen(September 10)

2. Loan Issue Date
(Delivery Date of Borrowed
Shares)

September 12
Borrowing Trade Securities
5,050,000

Securities Borrowed
5,050,000

Guarantee Deposits
5,355,000

Call Loans

3. Short-Sale (Share Sell) Contract
Date

September 13
Accounts Receivable
4,997,375

4. Share Sale and Delivery
Date

Sales of Securities Borrowed
4,997,375* There will be no trading loss or gain for funds at thetime of the loan issue date (share delivery date).
* Collateral is cash or substitute securities.
* The loan issue date and share sale and delivery date
are not necessarily the same.
* The effective date of the market value (@ 510) andthe loanable value of the deposited collateral(approximately 105%) are agreed upon in thecontract.

Example) Short sale of stock certificatesContract date: September 13 Delivery date: September 18
Number of contracted shares: 10,000
Contract unit price: 500 yen
Contract price: 5,000,000 yen
Fee: 2,625 yen (including consumption tax)
Delivery price: 4,997,375 yen* There will be no trading loss or gain for funds at thetime of short selling.
* This does not suppose short selling without shareborrowing (share sale).
* Valuation shall begin on the date of recording ofcontract.

Example) Loan rate: 0.80% per annum
Daily value x 0.80% ÷ 365 = 111* To be calculated from the loan issue date or the firstbusiness day following the loan issue date
Example) Closing at the end of month and payment on
the 10th of the following month

September 18
Call Loans
4,997,375

5. Share-Borrowing
Commission (During the
Borrowing Period)

5,355,000

Borrowing transactions are calculated at the market value of
505 yen on the business day immediately preceding the loan
issue date.
@505 yen x 10,000 shares = 5,050,000
The deposited collateral is calculated at the market value of
510 yen as of September 10, the date of conclusion of theloan agreement.
Deposited collateral: @510 yen x 10,000 shares x 105% = 5,355,000
The deposited collateral shall accrue by the transaction
agreement regardless of whether the borrowed shares are
sold.
The deposited collateral shall be marked-to-market at market
value two business days prior.
The same shall apply to any additional deposits.

Remarks* Contract execution normally takes place before theshort-sale contract date.
* There is a gap in the time between borrowing andshort sale.
* Not all shares borrowed will be short sold.

Accounts Receivable
4,997,375

Each day September 12-September 30

Other Expenses

Other Accrued Expenses
111

111

Transaction

Account Journal

6. Interest on Collateral

Each day September 12-September 30
Other Accrued Revenue

Other Revenue
13

7. Contract Date for
Repurchase in Kind

Description

Sales of Securities Borrowed
4,997,375

Accounts Payable
4,502,362
Gain on Securities
Transactions
495,013

8. Delivery Date of
Repurchased Stock Certificates

Accounts Payable

Example) Repurchase of the same issue
Contract date: October 22 Delivery date: October 25
Number of contracted shares: 10,000
Contract unit price: 450 yen
Contract price: 4,500,000 yen
Fee: 2,362 yen (including consumption tax)
Delivery price: 4,502,362 yen* Not all short-sold shares will be repurchased.

* The loan repayment date and share repurchase anddelivery date are not necessarily the same.

Call Loans
4,502,362

October 31
Securities Borrowed
5,100,000

10. Withdrawal of Collateral* Not all borrowed shares will be returned.

Borrowing Trade Securities
5,100,000

October 31
Call Loans
4,530,000

11. Payment of Share-Lending
Commission* To be recorded from the date of recording of theguarantee deposits or from the first business day
following the date of recording* The date of receipt is determined by the transaction
agreement.
Example) Closing at the end of the month and receipt
on the 10th of the following month

October 25
4,502,362

9. Borrowed Shares Repayment
Date

Example) Deposit interest rate (interest): 0.10% per annum
Daily amount of collateral x 0.10% ÷ 365 = 13
13

October 22

Guarantee Deposits
4,530,000(Payment date)
Other Accrued Expenses
3,459

Remarks

Call Loans
3,459

The same shall apply to the mark-to-market withdrawal ofcollateral.
The amount of the collateral withdrawal shall be inaccordance with the transaction agreement.

Payment amount: Σ (Daily appraisal value x 0.80% ÷ 365)
= 3,459 yen
The payment date and method for item rental shall be inaccordance with the transaction agreement.
Adjustment for any leftover amount shall be made in “Other
Expenses.”Transaction

Account Journal

Description

12. Receipt of Interest(Date of receipt)

Amount received: Σ (daily amount of collateral x 0.10% ÷365)= 455 yen
The receipt date and method for interest shall be inaccordance with the transaction agreement.
Adjustment for any leftover amount shall be made in “Other
Revenue.”Call Loans

Other Accrued Revenue455

13. Ex-Dividend

455(Ex-dividend date)
Other Expenses
30,000

Other Accrued Expenses
30,000(Right allotment date)
Other Expenses
20,000

Other Accrued Expenses
20,000(Payment date to the lender)
Other Accrued Expenses
50,00014. Ex-Rights for New Shares

Call Loans
50,000Ex-rights date: Number of short-sale shares is increased by
the number of the newly allotted shares.
(Payment date of money equivalent to fractional shares)
Other Expenses

Call Loans
38,50015. Valuation(Daily valuation)
Loss or Gain on Valuation of
Securities
××××

38,500An ex-dividend adjustment amount shall be recorded for thenumber of short-sale shares.
Ex-dividend adjustment amount = Estimated dividend unit
price x number of short-sale shares x 100%

Remarks* Payment method at the time of ex-dividend shall bein accordance with the transaction agreement.

The number of borrowed shares, excluding the number ofshort-sale shares, calculated on the ex-dividend date shall becalculated as the ex-dividend adjustment amount.
Ex-dividend adjustment amount = Estimated dividend unit
price x number of borrowed shares (*) x 100%
* Excluding the number of short-sale shares calculated on
the ex-dividend date
Example) Estimated dividend unit price: 50 yen
Number of borrowed shares: 1,000
Number of short-sale shares: 600

If the new share allotment date comes before the due date forrepayment of borrowed shares, a number of shares equivalent
to the new shares shall be refunded to the lender in old shareson the new share delivery date.
The item rental fee for new shares shall not be included until
the new share delivery date because the occurrence ofliabilities shall be from the new share delivery date.
Collateral shall be calculated by increasing the allotment of
new shares from the right allotment date.

* If fractional shares have been generated, an amountin cash equivalent to the number of fractional sharesshall be repaid based on the agreement.
* If the borrowed shares are repaid by the new shareissue date, it is sufficient to repay only the original
number of old shares and to arrange to repay a
number of old shares equivalent to the number of the
new shares on the new share issue date.

Sales of securities borrowed shall be valued on a daily basis
at actual market value.
Sales of securities borrowed - (number of short-sale shares x
evaluated market value)* Valuation shall begin on the date of recording of theshort sale (share sale) contract.
* Loan transactions shall not be evaluated.

Difference > 0……Gain on valuation of securities
Difference < 0……Loss on valuation of securities

Transaction

Account Journal

16. Revaluation(Daily valuation)
Loss on Valuation of
Securities(Sales of securities
borrowed)

Sales of Securities Borrowed(Gain on valuation of
securities)

Description
Open type funds will be reevaluated at fiscal year end.
Gain on valuation of securities……Gain on securities
transactions
Loss on valuation of securities……Loss on securities
transactions

Remarks* The following items shall be noted at the time ofcreation of a balance sheet as stipulated in the
Cabinet Office Order issued by the Prime Minister’s
Office:1. That money has been borrowed for the securities
2. The estimated market value of the securities
borrowed (those that have not been repaid)
3. That gain and loss on transactions shall be recordedon the contract date for repurchase of the sales of
securities borrowed

7. Accounting for Settlement after Tax Deduction of an Amount Equivalent to Existing Accrued Interest on Sales ofDomestic Public and Corporate Bonds
Processing shall be as follows when the equivalent amount to existing accrued interest pertaining to the sales ofdomestic public and corporate bonds is settled by the amount after tax deduction (meaning an amount from which
an equivalent amount to tax is deducted):(1) The amount equivalent to existing accrued interest recorded on the prepaid expenses account at the time ofacquisition shall be the amount less the amount equivalent to tax (meaning the amount actually to be paid).
(2) The amount for account receivable for bond interests to be recorded on a daily basis after the time ofacquisition shall be tax inclusive (meaning an amount including the amount equivalent to tax).
(3) The difference between the amount equivalent to existing accrued interest or bond interest actually received
at the time of sale or on the interest payment date and the amount of prepaid expenses account and theamount of accrued interest income account to be deducted at that time shall be adjusted by increasing or
decreasing the account for interest income.
[Journal Entry Example (excluding corporate bond calculation)]:If convertible corporate bonds with a face value of 4 million yen and an annual interest rate of 7.3% are acquired
after 100 days and sold after 50 days
1. Acquisition
Prepaid Expenses

64,000Call Loans

64,000(or money trusts)

2. Accrued Interest Income (for 50 days)
Accrued Interest Income

40,000Interest Income

40,00096,000Prepaid Expenses

64,000Accrued Interest Income

40,000Interest Income-8,0003. SaleCall Loans(or money trusts)

96,00096,0004. Interest Payment Date
Call Loans

146,000(or money trusts)

Prepaid Expenses

64,000Accrued Interest Income

66,000Interest Income

16,000146,000

146,000

8. Accounting for Brokerage Fees for Foreign Securities
Brokerage fees for foreign securities shall be processed in other foreign currency expenses accounts and otherunpaid expense accounts each time a contract is made.

[Journal Entry Example]
Brokerage fees shall be processed in the other foreign currency expenses accounts and other unpaid expense
accounts each time a contract is made.
Other Accrued Expenses

Call Loans(or money trusts)

9. Accounting for Foreign Shares Listed on Domestic Financial Instruments Exchanges
Processing of foreign securities listed on domestic financial instruments exchanges shall be as follows:(1) Amounts to be recorded on the foreign investments account and the foreign currency funds account shall be
the acquisition value of foreign shares. The amount to be deducted from these accounts shall be the bookvalue pertaining to the sale of foreign shares.
(2) Transfers of deposits recorded in assets denominated in foreign currencies to assets denominated in Japanesecurrency shall be made on the date of recording of the deposit.
Respective losses and gains on assets denominated in foreign currencies pertaining to the recorded
amount shall be simultaneously transferred to the assets denominated in Japanese currency.
(3) Deposit processing subject to the balance of account receivable on the closing date, the profit or loss of theassets denominated in foreign currencies subject to the recorded amount shall be deducted from theequivalent amount to the profit or loss that is transferred to the foreign currency funds account. Any amountthat cannot be deducted shall be processed as a loss or gain for the period.

[Journal Entry Example]
Category
1. Purchase Contract Date

Assets Denominated in Japanese Currency

Assets Denominated in Foreign Currencies

No treatment
Stock certificates: ×××

Accounts Payable: ×××

Accounts Payable: ×××
Deposit: ×××

Deposit: ×××
Foreign Currency Funds: ×××

Accounts Receivable: ×××
Loss on Transactions: ×××

Stock certificates: ×××
Gain on Transactions: ×××

2. Purchase Delivery Date
Foreign Investments a/c: ×××

3. Sales Contract Date

Call Loans: ×××(or money trusts)

No treatment

4. Sale Delivery Date
Call Loans: ×××(or money trusts)
Loss on Transactions: ×××

5. Cash Dividends(1) Ex-dividend Date

Foreign Investments a/c: ×××
Gain on Transactions: ×××

No treatment

Deposit: ×××
Foreign Currency Funds:×××
Gain on Transactions: ×××

Accounts Receivable: ×××
Deposit: ×××
Loss on Transactions: ×××

Accrued Dividends Receivable: Stock Dividends: ×××
×××(2) Deposit Date

6. Processing of ShareDividends(1) Ex-dividend Date

Remarks

Call Loans: ×××

Stock Dividends: ×××

Deposit: ×××

Accrued Dividends Receivable:
×××(or money trusts)
Other Foreign Currency
Expenses: ×××

Other Foreign Currency
Revenue: ×××

Stock Dividends: ×××

Deposit: ×××

No treatment(2) Deposit date ofCall Loans: ×××
fractional disposal amount (or money trusts)

Deposit: ×××
Other Revenue: ×××

Deposits recorded in assets denominated in foreign
currencies shall be transferred to assets denominated inJapanese currency on the date of recording the amount.
“All losses and gains on assets denominated in foreign
currencies pertaining to the amount to be recorded shallbe simultaneously transferred to the assets denominatedin Japanese currency.”
The amount deducted from foreign investments accountand foreign currency funds account shall be the bookvalue for sale of securities denominated in foreign
currencies.

Amount of accrued dividends receivable = Unit price ofdividends before tax (expressed denominated in foreign
currency)× number of shares × T.T.B on the ex-dividend dateCash dividends shall be paid to the trustee in Japanesecurrency by the bank handling the dividend payment.
The difference between T.T.B on the ex-dividend dateand T.T.B on the date the bank handling dividend
payment converts dividends into yen shall be processedon the payment date as other foreign currency expenses
or other foreign currency revenues.
Foreign income taxes are to be recorded off the books.

No treatment

Other Revenue: ×××

To be recorded in foreign investments account andForeign currency fund account.
The amount shall be the acquisition value (in Japanesecurrency) of securities denominated in foreign
currencies.
Valuation shall be added to valuation loss or gain for theforeign investments account.

Other Revenue: ×××
Deposit: ×××

Stock certificates shall be issued only for the number ofsales unit shares among the number of shares in the saleunit to be allotted.
Only the number of shares as securities denominated inforeign currencies shall be increased.
Fractional shares less than one unit shall be sold anddisposed of by the Japan Securities Clearing Associationand paid as disposition value by the institution handlingshare administration (the trustee bank).

Category
7. Processing of Stock
Splits(1) Stock Split Date:

Assets Denominated in Japanese Currency

No treatment(2) Deposit date ofCall Loans: ×××
fractional disposal amount(or money trusts)
8. Processing of Paid-in
Capital Increase(1) Ex-rights Date
(2) Date of Receipt ofProceeds from Sale

Assets Denominated in Foreign Currencies

No treatment

Other Revenue: ×××

Deposit: ×××

Other Revenue: ×××

Other Revenue: ×××

Deposit: ×××

No treatment

Call Loans: ×××

No treatment

Gain on Transactions: ×××

Other Revenue: ×××

Deposit: ×××

Gain on Transactions: ×××

Gain on Transactions: ×××

Deposit: ×××

No treatment
Deposit: ×××

Other Revenue: ×××

Other Revenue: ×××

Deposit: ×××

10. Processing After
Revaluation on the
Settlement Date(2) In Case of a Valuation
Loss:

Stock certificates shall be issued only for the number ofshares in the sales unit among the number of shares to be
allotted.
Only the number of shares as securities denominated inforeign currencies shall be increased.
Fractional shares less than one unit shall be paid for as
payment for disposition.

(or money trusts)
9. Processing of Free
Capital Increase(1) Ex-rights Date
No treatment(2) Deposit date ofCall Loans: ×××
fractional disposal amount(or money trusts)(1) In Case of a Valuation
Gain:

Remarks

Paid-in capital increase shall be disposed of by sale onsite
by the Japan Securities Clearing Association and paid as
disposition value by the institution handling shareadministration.

Stock certificates shall be issued only for the number ofshares in the sales unit among the number of shares to be
allotted.
Only the number of shares as securities denominated inforeign currencies shall be increased.
Fractional shares less than one unit shall be paid for as
disposition value.

Foreign Investments a/c : ×××

Loss on Transactions: ×××

Gain on Transactions: ×××

Foreign Investments a/c : ×××

Stock certificates: ×××

Gain on Transactions: ×××

Gain on Transactions: ×××

Foreign Currency Funds: ×××

Loss on Transactions: ×××

Stock certificates: ×××

Foreign Currency Funds: ×××

Loss on Transactions: ×××

Deposit: ×××
Foreign Currency Funds: ×××

Accrued Dividends Receivable:
×××
Deposit: ×××

Deposit: ×××

Accounts Receivable: ×××

Foreign Currency Funds: ×××

Deposit: ×××

11. Accounting for
Deposit Processing
Subject to the Balance of
Account Receivables.

(1) Payment of Dividends

Call Loans: ×××

Foreign Investment Accounts:
×××(or money trusts)(2) Receipt of Sales
Payment

Call Loans: ×××(or money trusts)

Foreign Investment Accounts:
×××

The amount deducted from the foreign investments accountand foreign currency funds account shall be the book value
for sale of securities denominated in foreign currencies plus
or minus loss or gain on sale.

10. Accounting of Foreign Public and Corporate Bonds
Processing of foreign public and corporate bonds shall be as follows:(1) Bond interest on foreign public and corporate bonds traded with interest shall not be recorded on a daily
basis but shall be recorded in a lump sum as accrued on the ex-interest date.
(2) Accounting for the purchase price of foreign public and corporate bonds payable in Japanese currency
shall be the following journal entries:(a) Accounting for assets denominated in Japanese currency
Purchase Payment Date
Foreign Investment Accounts

Call Loans (or money trusts)(b) Accounting of assets denominated in foreign currencies
Purchase Payment Date
Prepaid Expenses for Public and Corporate Bonds

Foreign Currency Funds(3) If any convertible corporate bonds denominated in foreign currencies issued by a Japanese enterpriseare converted into shares and made into assets denominated in Japanese currency, the conversion shallbe made as follows:(a) Timing of accounting
In principle, processing shall be done on the date the management company gives the trustee
company instructions for conversion into shares.
(b) Accounting of assets denominated in foreign currencies(i) The book value of convertible corporate bonds for share conversion shall be transferred to the bookvalue of stock certificates.
Any balance of prepaid expenses related to such conversion shall also be transferred to the bookvalue of the stock certificates.
(ii)Any receivable amount of interest on the convertible corporate bonds recorded during the period up
to the date of conversion into shares shall be cancelled on the date of conversion into shares.
(c) Transfer from assets denominated in foreign currencies to assets denominated in Japanesecurrency shall be processed in the same manner as revolving funds. The exchange rate used forconversion of Japanese currency shall be the middle price of customer rates on the processing date.

11. Accounting for Discounted Bills
Processing of discounted bills shall be as follows:(1) No entry shall be made for discounted bills. They shall be included in call loans and processed as a ( )statement of items.
(2) The acquisition value shall be recorded, and discount expenses shall be recorded on a daily basis asinterest income and accrued interest income.
(3) Any difference arising from resale or transfer before the settlement date shall be processed byincreasing or decreasing interest income.

[Example] If a promissory note with a face value of 100 million yen is purchased at an annual rate of 8% in
a period of 90 days and resold after 45 days, the market rate on the resale date shall be 7.75% perannum.
* 1. Call Loans

99,044,521* 2. Call Loans

98,027,398(Discounted bills)* 3. Accrued Interest Income

986,265Interest Income

30,858The acquisition price shall be withdrawn for the discounted bills.
The amount that the daily recorded amount is multiplied by the number of days elapsed is withdrawn for
the accrued interest income.
Interest income shall be calculated by deducting the difference of * 2 and * 3 from * 1.
If transfer occurs before the settlement date, the purchase funds shall use * 1 above as the acquisition priceof the discounted bills.

12. Accounting for Exercise of Stock Subscription Warrants of Corporate Bonds with Warrants(a) Timing of accounting
In principle, processing shall be done on the date on which the management company gives thetrustee company instructions to exercise stock subscription warrants.
(b) Accounting shall be classified into cash payment and substitute payment and shall be processed asfollows:[Journal Entry Example]
Classification(1) In case of cash payment

Journal Entry Example, Etc.
1) Book value of the corporate bonds ≥ Face value of the corporate bonds
Example 1: Face value of the corporate bonds………10,000,000 yen
Book value of the corporate bonds………10,500,000 yen
Balance of existing accrued interest at the time of acquisition of
the corporate bonds……………………… 200,000 yen
Balance of accrued interest income up to the time of exercise ofstock subscription warrants after the acquisition of the corporate
bonds. …………………………………… 100,000 yen
Exercise price of warrants…………………300 yen
Allowance rate of warrants………………100%
Exercise rate of warrants…………………100%
Stock Certificates 10,499,900

Corporate bonds……500,000
Call Loans: 9,999,900(or money trusts)

Classification

Journal Entry Example, Etc.
Note 1. Number of acquired shares (33,333)…The same shall apply
hereinafter.
10,000,000 yen x 100% x 100%=
300 yen(Amounts less than one share rounded down)
Note 2. Payment amount (9,999,900 yen) = 33,333 shares x 300 yen
Note 3. Of the book value of corporate bonds, the amount to betransferred to the book value of stock certificates(500,000 yen) = 10,500,000 - 10,000,000
Note 4. The balance of the existing accrued interest account at the timeof acquisition of corporate bonds(200,000 yen) shall not be included in the acquisition value ofstock certificates because the corporate bonds themselves willremain as straight bonds even after exercise of the rights.
Note 5: The balance of accrued interest income account after the time ofacquisition of the corporate bonds until exercise of stock subscription
warrants (100,000 yen) shall not be cancelled because the corporate
bonds themselves shall remain as straight bonds even after exercise of
the rights.
Note 6. Acquired stock certificates shall be processed as old shares (thesame shall apply hereinafter).
2) Book value of the corporate bonds < Face value of the corporate bonds
Book Value Example 1: Case of 9,500,000 yen
Stock certificates: 9,999,900

Call Loans: 9,999,900(or money trusts)(2) In case of substitute 1) Book value of the corporate bonds ≥ Face value of the corporate bonds
payment
Stock certificates: 10,699,900
Accounts Receivable: 100
Accrued Interest Income:-100,000

Corporate bonds: 10,500,000
Prepaid expenses: 200,000
Interest Income: -100,000

Note 1. Accounts receivable (amount to be delivered for rounding upon
said exercise)= 10,000,000 yen - (33,333 shares x 300 yen)
…The same shall apply hereinafter.
Note 2. The amount from Note 1 shall be deducted from the book valueof the corporate bonds (10,500,000 yen) and the balance of accrued
interest account at the time of acquisition of the corporate bonds

(200,000 yen), and the book value of the corporate bonds shall betransferred to the book value of the stock certificates.
Note 3. The balance of accrued interest income account (100,000 yen)from the time of the acquisition of corporate bonds until the time of
exercise of stock subscription warrants shall be cancelled.
…The same shall apply hereinafter.
2) Book value of the corporate bonds < Face value of the corporate
bondsBook Value Example 1:

Case of 9,500,000 yen

Stock certificates 10,199,900
Accounts Receivable: 100

Corporate bonds 9,500,000
Gain on Securities Transactions:
500,000

Accrued Interest Income:-100,000

Prepaid Expenses: 200,000
Interest Income: -100,000

Note 1. Gain on securities transactions (500,000 yen)
= 10,000,000 yen - 9,500,000 yen
Note 2. The book value of stock certificates shall be the amountcalculated by deducting accounts receivable (100 yen) from the facevalue of corporate bonds (10,000,000 yen) and adding the balance of
already existing accrued interest at the time of acquisition of thecorporate bonds (200,000 yen).

13. Accounting for Futures Trading
Journal entry, etc.
(Note) “Call Loans” in accounts journal entries shall mean deposits, money trusts, call loans, and customers’ margin deposits.
Category
Futures Transactions
1. Opening Transaction(1) Buy contract

Calculations, etc.

Number of contracted
units
Contract unit priceContract priceFees
Net price
Customers’ margindeposits
Customers’ margindeposits
Substitute Securities

Quantity of new contracts
Buy contract unit price
Quantity of new contracts x buy contract unit price x set multiple(Note) In case of one-way payment in advance, the fees are processedon the outstanding futures transactions a/c.
Contract price + fees
Cash portion + substitute securities
The same shall apply to sellportioncontracts.
(The same shall apply
Substitute securities portion
hereinafter.)

Accounts Journal
Contract Date
Futures Purchases
Accounts Payable for(Net Price)
Futures Transactions(Net Price)(Note) Fees
On the Contract Date in Case of Advance
Payment
Futures Purchases
Accounts Payable for Futures(Net Price)Transactions(Net price - Fees)
Call Loans or
Outstanding Amounts (Fees)

Deposit Date
Customers’ Margin
Deposits(Cash + Substitutions)(2) Sell contract
Number of contracted
units
Contract unit priceContract priceFees
Net price

Quantity of new contracts
Sell contract unit price
Quantity of new contracts x sell contract unit price x set multiple
In the case of one-way payment in advance, the fees are recorded on
the outstanding futures transactions a/c.
Contract price - fees

Call Loans, etc.
(Cash)
Customers’ Margin
Deposits
Substitute Securities(Substitutes)

Contract Date
Accounts Receivable for Futures Sale
Futures Transactions(Net Price)(Net Price)(Note) Fees
On the Contract Date in Case of Advance Payment
Accounts Receivable for
Futures Sale
Futures Transactions(Net Price)(Net price + Fees)
Call Loans, etc.
Or Accounts Payable(Fees)

Category
2. Closing Transactions(1) Reversing trade(i) Resale

Calculations, etc.
Number of contracted
units
Contract unit priceContract priceFees (outgoing)

Fees (incoming)
Right modification unit
price
Settlement amount

Deduction of accounts
payable for futurestransactions
A

Deduction of futurespurchases
B

Resale quantity
Resale unit price
Resale quantity x resale unit price x set multiple(1) Whole Resale
Full amount of the balance of the total fees of buy contracts, etc.
(2) Partial Resale (a)Resale quantity
Balance of buy contract fees ×Remaining quantity of contracts(In principle, the total amount of fees, consumption tax, and amounts
equivalent to exchange tax shall be calculated separately.)Amount equivalent to rights announced by the Exchange (The same
shall apply hereinafter.)(1) In case of incoming and outgoing collection of fees, etc. at the timeof resale
Resale quantity x {resale unit price - (buy contract unit price - rightmodification unit price)} x set multiple - fees (outgoing andincoming)
Difference ≥ 0 Settlement amount receivable
Difference < 0 Settlement amount payable(2) Incoming fee collection only at the time of resale…If the outgoing portion shall be paid when the contract is madeResale quantity x {resale unit price - (buy contract unit price - rightmodification unit price)} x set multiple - fees (incoming)
Difference ≥ 0 Settlement amount receivable
Difference < 0 Settlement amount payable(1) Whole Resell
Outstanding balance of futures transactions(2) Partial Resale
Resale quantity
Balance of buy contract price x ----------------------- + fees (outgoing)
Remaining quantity of contracts{Individually calculated in (a)}(1) If before revaluation, the amount equivalent to the amountdeducted from the outstanding amount of futures transactions above(2) Partial Resale after Revaluation
Resale quantity
Balance of futures purchases x----------------------Remaining quantity of contracts

Accounts JournalCategoryCalculations, etc.
Loss or gain on closingof accounts

Accounts payable for futures transactions - futures purchases ±settlement amount receivable and payable - advance payment fees(A)

Customers’ margindeposits(B)

Abovementioned

Accounts Journal
Contract Date
Accounts Payable for
Futures Purchases
Futures Transactions(B)(A)
Accounts Receivable
Accounts Payable(Settlement Amount(Settlement Amount
Receivable)
Payable)Losses on Futures
Gains on Futures
Transactions, etc.
Transactions, etc.
(Loss on Settlement)(Gains on Settlement)
Delivery Date
Call Loans, etc.
Accounts Receivable(Settlement Amount(Settlement Amount
Receivable)
Receivable)
Accounts Payable
Call Loans, etc.
(Settlement Amount(Settlement Amount
Payable)Payable)Call Loans, etc.

Withdrawal Date
Customers’ Margin
Deposits

Customers’ Margin
Deposits
Substitute Securities

CategoryCalculations, etc.

Accounts Journal(ii) Repurchase
Number of contracted
units
Contract unit priceContract priceFees (outgoing)

Fees (incoming)
Right modification unit
price
Settlement amount

Deduction of accountreceivables for futurestransactions
C

Deduction of futures
sales
D

Repurchase quantity
Repurchase unit price
Repurchase quantity x repurchase unit price x set multiple(1) Full Repurchase
Full amount of the balance of sell contract fees
(2) Partial Resale (a)Repurchase quantity
Balance of sell contract fees x--------------------------------Remaining quantity of contracts(In principle, the total amount of fees, consumption tax, and amounts
equivalent to exchange tax shall be calculated separately.)(1) In case of incoming and outgoing collection of fees for
repurchasing.
Repurchase quantity x {(sell contract unit price - right modification
unit price) - repurchase unit price) x set multiple - fees (outgoingand incoming)
Difference ≥ 0 Settlement amount receivable
Difference < 0 Settlement amount payable(2) If fees are collected only at the time of repurchase……The
outgoing portion shall already have been paid when the contract ismade
Repurchase quantity x {(sell contract unit price - right modification
unit price) - repurchase unit price} x set multiple - fees (incoming)
Difference ≥ 0 Settlement amount receivable(1) Full Repurchase
Outstanding balance of accounts receivable for futures transactions(2) Partial Repurchase
Repurchase quantity
Balance of sell contract price x------------------------ + fees (outgoing)
Remaining quantity of contracts{Individually calculated in (a)}(1) If before revaluation, the amount equivalent to the amountdeducted from the outstanding amount of futures transactions above(2) Partial repurchase after revaluation
Repurchase quantity
Forward sales balance x------------------------Remaining quantity of contracts

Futures Sale
(D)

Contract Date
Accounts Receivable for
Futures Transactions(C)

Accounts Receivable(Settlement Amount
Receivable)

Accounts Payable(Settlement Amount
Payable)Losses on Futures
Transactions, etc.
(Loss on Settlement)

Gains on Futures
Transactions, etc.
(Gains on Settlement)

Delivery Date
Call Loans, etc.
Accounts Receivable(Settlement Amount(Settlement Amount
Receivable)
Receivable)
Accounts Payable(Settlement Amount
Payable)Call Loans, etc.

Call Loans, etc.
(Settlement Amount
Payable)Withdrawal Date
Customers’ Margin
Deposits

Customers’ Margin
Deposits
Substitute Securities

CategoryCalculations, etc.
Loss or gain on closingof accounts

Futures sales - accounts receivable for futures transactions ±settlement amount receivable and payable - advance payment fees
(D)

Customers’ Margin
Deposits(C)

Abovementioned

Accounts JournalCategory(2) Delivery settlement(i) Contract for difference(A) Buy contract
settlement

Calculations, etc.
Number of contracted
units
Contract unit priceContract priceFees (outgoing)
Fees (incoming)
Right modification unit
price
Settlement amount

Deduction of accountpayable for futurestransactions
E
Deduction of futurespurchases
F
Settlement loss or gain

Settlement quantity
Settlement unit priceSettlement quantity x settlement price x set multiple
Fees (outgoing)(1) In case of incoming and outgoing collection of fees at the time ofsettlement
Settlement quantity x {settlement unit price - (buy contract unit
price - right modification unit price)} x set multiple - fees
(outgoing)
Difference ≥ 0 Settlement amount receivable
Difference < 0 Settlement amount payable(2) Fees are collected only at the time of settlement……If theoutgoing portion shall be paid when the contract is madeSettlement quantity x {settlement unit price - (buy contract unit
price - right modification unit price)} x set multiple
Difference ≥ 0 Settlement amount receivable
Difference < 0 Settlement amount payable
Full amount of the outstanding balance for futures transactions

Full amount of the outstanding balance for futures purchases

Accounts payable for futures transactions - futures purchases ±settlement amount receivable and payable - advance payment fees
(E)

Customers’ Margin
Deposits

Abovementioned(F)

Accounts Journal
Settlement Date
Accounts Payable for
Futures Purchases
Futures Transactions(F)(E)
Accounts Receivable
Accounts Payable(Settlement Amount(Settlement Amount
Receivable)
Payable)Losses on Futures
Gains on Futures
Transactions, etc.
Transactions, etc.
(Loss on Settlement)(Gains on Settlement)
Delivery Date
Call Loans, etc.
Accounts Receivable(Settlement Amount(Settlement Amount
Receivable)
Receivable)
Accounts Payable(Settlement Amount
Payable)Call Loans, etc.

Call Loans, etc.
(Settlement Amount
Payable)Withdrawal Date
Customers’ Margin
Deposits

Customers’ Margin
Deposits
Substitute Securities

Category(B) Sell contract settlement

Calculations, etc.
Number of contracted
units
Contract unit priceContract priceFees (outgoing)
Fees (incoming)
Right modification unit
price
Settlement amount

Withdrawal of
accounts receivable for
futures transactions

Deduction of futuressales
HSettlement loss or gain

Settlement quantity
Settlement unit priceSettlement quantity x settlement unit price x set multiple(1) In case of incoming and outgoing collection of fees at the time ofsettlement
Settlement quantity x {(sell contract unit price - right modification
unit price - settlement unit price} x set multiple - fees (outgoing)
Difference ≥ 0 Settlement amount receivable
Difference < 0 Settlement amount payable(2) If fees are collected only at the incoming time of settlement
Settlement quantity x {(sell contract unit price - right modification
unit price) - settlement unit price} x set multiple
Difference ≥ 0 Settlement amount receivable
Difference < 0 Settlement amount payable
Full balance of accounts receivable for futures transactions

Full balance of futures sales

Futures sales - accounts receivable for futures transactions ±settlement amount receivable and payable - advance payment fees
(H)

Customers’ margindeposits

Accounts Journal

Abovementioned(G)

Futures Sale
(H)

Settlement Date
Accounts Receivable for
Futures Transactions(F)

Accounts Receivable(Settlement Amount
Receivable)

Accounts Payable(Settlement Amount
Payable)Losses on Futures
Transactions, etc.
(Loss on Settlement)

Gains on Futures
Transactions, etc.
(Gains on Settlement)

Delivery Date
Call Loans, etc.
Accounts Receivable(Settlement Amount(Settlement Amount
Receivable)
Receivable)
Accounts Payable(Settlement Amount
Payable)Call Loans, etc.

Call Loans, etc.
(Settlement Amount
Payable)Withdrawal Date
Customers’ Margin
Deposits

Customers’ Margin
Deposits
Substitute Securities

Category(2) Settlement in kind(A) Actual receipt(a) Standardized
government bonds(b) Stock futures 50

Calculations, etc.

6. See Special Provision (1) for standardized government bonds transactions.
Number of contracted
units
Contract unit priceContract price
Futures fees (outgoing)

Exchange tax equivalent(outgoing)
Net price(Amount to be prorated
for the contract price)
Actual receipt fees
Settlement amount(Total customer
payment)
Withdrawal of accounts
payable for futurestransactions (E)Deduction of futurespurchases(F)(E) - (F)Spot transaction quantity (last quantity of buy contracts)
Buy contract unit price - right modification unit priceSpot transaction quantity x (buy contract unit price - rightmodification unit price) x 50,000
Futures fees (outgoing) balance (futures fees [outgoing] when thebuy contract is made- futures fees [outgoing] at the time of sellback)Exchange tax equivalent (outgoing) balance (exchange tax
equivalent [outgoing] when the buy contract is made)- exchange tax equivalent (outgoing) at the time of sellback
Contract price + futures fees (outgoing) + Exchange tax equivalent(outgoing)
Same as spot fees, described below
Contract price + futures fees (outgoing) + Exchange tax equivalent(outgoing)+ spot transaction fees
Outstanding balance of futures transactions

Accounts Journal

Next Business Day After the Last Trading Day
Stock certificates
Accounts Payable(Settlement Amount)(Settlement Amount)
Accounts Payable for
Futures Transactions(E)
Losses on Futures
Transactions, etc.
(Difference < 0)

Difference ≥ 0 Gains on futures transactions
Difference < 0 Losses on futures transactions

Gains on Futures
Transactions, etc.
(Difference ≥ 0)

Delivery Date
Call Loans(or money trusts)(Settlement Amount)(Settlement Amount)
Accounts Payable

Call Loans(or money trusts)
Balance of futures purchases

Futures Purchases(F)

Delivery Date
Customers’ Margin
Deposits

Customers’ Margin
Deposits
Substitute Securities

CategoryCalculations, etc.
Issue
(Pro-rata
amount)Deposits for each individual(c) Japanese yen currency
futures(Tokyo Financial futures)

Actual receipt
fees
Settlement
amountNumber ofacquired shares
Contract unit
price

Accounts Journal

Used to prorate the net price to the net price for each individual issue.
The share price shall be the closing price on the spot market on the last
trading day.
Net price of A1 issue
Closing price of A1 issue x number of 1 trading unit shares= Net price x
A50n issue closing price x 1 number of trading unit shares= 1 (rounded down to the nearest yen)
(Note) The difference between the net price and the total amount of the
pro rata allotment shall be allocated in the order of the smallest
security code by 1 yen each.
Net price of A1 issue x set actual receipt fees rate (rounded down to thenearest yen)(Same as the actual receipt fees)
Net price of A1 issue + actual receipt fees for A1 issue[Next Business Day After the Last Trading Day]

Actual receipt quantity x 1 trading unit number of shares
Net price of A1 issue---------------------------------------------(Rounded down to the nearest yen)
Number of acquired shares for A1 issue

Daily Trial Balance Sheet for Foreign Currency
Accounts Payable for
Futures Purchases
Futures Transactions(Gains on Futures(Losses on Futures
Transactions)
Transactions)
Daily Trial Balance Sheet for Japanese Currency
Foreign Exchange
Selling Exchange
Accounts Receivable
Accounts Payable for
Futures Transactions

Accounts Payable

Losses on Futures
Transactions, etc.

(A)

Commission in yen and consumption tax[6. See Special Provision (2)]Category

Calculations, etc.

Accounts Journal

[Delivery date]
Daily Trial Balance Sheet for Foreign Currency
Foreign Currency
Deposit
Funds(Loss Account)(Profit Account)
Daily Trial Balance Sheet for Japanese
Currency
Selling exchange
Foreign Exchange
Accounts Receivable
Call Loans, etc.
(Loss Categories)----------Accounts Payable(A)(Gain Categories)--------------Call Loans, etc.

Same as remittances of foreign currency

Category(B) Current offering(a) Standardized
government bonds(b) Stock futures 50

Calculations, etc.

Accounts Journal

6. See Special Provision (1) for standardized government bonds transactions.
Number of contracted
units
Contract unit priceContract price
Futures fees (outgoing)

Net price(Amount to be prorated
for the contract price)
Actual delivery fees
Securities transaction tax
Settlement amount(Total customer
payment)
Withdrawal fromaccounts receivable for
futures transactions (G)Deduction of futures
sales
(H)
(H) - (G)Actual delivery quantity (last quantity of buy contracts)
Sell contract unit price - right modification unit price
Actual delivery quantity x (sell contract unit price - rightmodification unit price) x 50,000
Balance of futures fees (outgoing) (Futures fees [outgoing] when thesell contract is made- futures fees [outgoing] at the time of buyback)Contract price + futures fees (outgoing) + Exchange tax equivalent(outgoing)
Same as spot fees, described below
In-kind securities transaction tax, as described below
Contract price - futures fees (outgoing) - exchange tax equivalent(outgoing)- actual delivery fees - securities transaction tax
Balance of accounts receivable for futures transactions

Balance of futures purchases

Next Business Day After the Last Trading Day
Accounts Receivable
Stock certificates(Settlement Amount)(Book value in kind)
Loss on Securities
Transactions

Gain on Securities
Transactions

Futures Sale
(H)

Accounts Receivable for
Futures Transactions(G)
Gains on Futures
Transactions, etc.
(Difference ≥ 0)

Losses on Futures
Transactions, etc.
(Difference < 0)Call Loans(or money trusts)

Delivery Date
Customers’
Deposits(Settlement Amount)

Difference ≥ 0 Gains on futures transactions
Difference < 0 Losses on futures transactions
Call Loans(or money trusts)

Margin(Settlement Amount)

Delivery Date
Customers’ Margin
Deposits

Customers’ Margin
Deposits
Substitute Securities

Category(a) Japanese yen currency
futures(Tokyo Financial futures)

Calculations, etc.

Accounts Journal[Next Business Day After the Last Trading Day]
Daily Trial Balance Sheet for Foreign Currency
Futures Sale
Accounts Receivable(Losses on Futures
for Futures
Transactions)
Transactions(Gains on Futures
Transactions)

Daily Trial Balance Sheet for Japanese Currency
Foreign Exchange
Foreign Exchange
Purchases
Accounts Payable----------- --------Accounts Payable for
Accounts Payable
Futures Transactions(A)
Losses on Futures
Transactions, etc.
Commission paid in yen and consumption tax[6. See Special Provision (2)][Delivery date]
Daily Trial Balance Sheet for Foreign Currency
Deposit
Foreign Currency
Funds
Daily Trial Balance Sheet for Japanese Currency
Foreign Exchange
Foreign Exchange
Accounts Payable
Purchases
Foreign Investment
Accounts
Call Loans, etc.
------------ --------------Accounts Payable
Call Loans, etc.
(A)
Same as foreign currency processing

Category
3. Modification of Rights

Calculations, etc.
Buy contracts
Sell contract

4. Valuation

Buy contracts

Right modification price = Remaining buy contract quantity x rightmodification unit price x set multiple
Right modification price = Remaining buy contract quantity x rightamendment unit price x set multiple(Remaining buy contract quantity x evaluated unit price x set
multiple) - buy contract net price(Market value) (Book value)
Difference ≥ 0 Valuation gain
Difference <0 Valuation Loss

Sell contract

5. Revaluation

6. Calculated Profit
Withdrawals(Remaining buy contract quantity x evaluated unit price x set
multiple) - sell contract net priceDifference > 0 Valuation Loss
Difference < 0 Valuation GainIn the case of open type investment trusts, revaluation shall be made to the market value on the fundsettlement date.
Buy contracts
Valuation gains shall be recorded as futures transaction, etc. gains, andvaluation losses shall be recorded as futures transaction, etc. losses.
Sell contract
Same as above

Acceptance of
calculated gains

If calculated gains can be withdrawn, they shall be processed bycollecting customers’ margin deposits.

Accounts Journal[Buy Contracts]
Right modification date
Accounts Payable for
Futures Purchases
Futures Transactions(Right Modification Fee)
(Right Modification Fee)
[Sell Contracts]
Right modification date
Futures Sale
Accounts Receivable for(Right Modification Fee) Futures Transactions(Right Modification
Fee)

Every day
Valuation Gain or Losson Futures Transactions,etc.
Valuation Loss (-) or
Gain[Buy Contracts]
Fund Settlement Date
Futures Purchases
Gains on Futures(Valuation Margin)
Transactions, etc.
Losses on Futures(Valuation Loss)
Transactions, etc.
Futures Purchases(Valuation Loss)(Valuation Loss)[Sell Contracts]
Fund Settlement Date
Futures Sale
Gains on Futures(Valuation Margin)
Transactions, etc.
Losses on Futures(Valuation Loss)
Transactions, etc.
Futures Sale
(Valuation Loss)(Valuation Loss)

Call Loans, etc.

Delivery Date
Customers’ Margin
Deposits

7. Special Provisions(1) Standardized Government Bonds Transactions
Journal Entry Example
Accounts Journal for Futures Purchase Contracts

Remarks

Accounts Journal for Futures Sales Contracts◇ On December 17, Fund A (open type) purchased 1 billion yen face value ◇ On October 21, Fund B (unit type) sold 1 billion yen face value ofof futures for the March contract month. (Contract Price = @ 97.50)
futures for the December contract month. (Contract Price = @ 98.00)
12/17 Contract Date
Accounts Payable for Futures
Transactions a/c
975,300,000 yen
975,300,000 yen

Futures Purchases a/c* Commission, etc.: 300,000
yen
12/19 (3rd Business Day) Customers’ Margin Deposit
Customers’ Margin Deposit a/c Money Trust a/c
30,000,000 yen (or call loans)
10,000,000 yen
Securities Received as Custom
ers’ Deposits for Customers’
Margin a/c 20,000◇ On February 10, Accounts settled due to the settlement of the fundabove Revaluate * (1).

10/21 Contract Date
Accounts Receivable for
Futures Sales a/c
Futures Transactions a/c
979,700,000 yen
979,700,000 yen* Commission, etc.: 300,000
yen

10/23 (3rd Business Day) Customers’ Margin Deposit
Customers’ Margin Deposit a/c Money Trust a/c
30,000,000 yen (or call loans)
10,000,000 yen
Securities Received as
Customers’ Deposits for
Customers’ Margin a/c 20,000(The unit type does not undergo revaluation for closing)* (1) Revaluation for closing is made for the open type only.

Final price for the contract month of March @ 97.20
Loss on Futures Transaction a/c Futures Purchases a/c
3,300,000 yen
3,300,000 yen◇ On March 4, Fund A settled the above futures transaction throughreversing trade. (Contract Price = @ 98.80)
However, this fund has been revaluated due to its February 10
closing date. (Loss on sale: 3,300,000 yen)
3/4 Contract Date
Accounts Payable for Futures
Futures Purchases a/c
Transactions a/c
972,000,000 yen
975,300,000 yen◇ On December 2, Fund B settled the above futures transaction
through reversing trade. (Contract Price = @ 99.44)
12/2 Contract Date
Futures Sales a/c
Accounts Receivable for Futu
res Transactions a/c
979,700,000 yen
979,700,000 yen* (2) Accounts Receivable a/c Gain on futures transaction a/c
15,70012,400Loss on Futures Transaction a/c * (3) Accounts Payable a/c
15,00015,000* (2) Accounts receivable (settlement amount) 12,400,000 yen =1 billion yen x (98.80 - 97.50) x 1/100 - 600,000 yen(Face Value) (Settlement Contract Price) (Purchase Contract Price)(Commission, etc.)* (3) Accounts payable (clearing price) 15,000,000 yen =1 billion yen x (98.00 - 99.44) x 1/100 - 600,000 yen(Face Value) (Sales Contract Price) (Settlement Contract Price)(Commission, etc.)

Journal Entry Example
3/7 Delivery Date (4 Business Days)
Money Trust a/c(or call loans)

Accounts Receivable a/c
12,400,000 yen

Money Trust a/c(or call loans)
10,000,000 yen
Securities Received as
Customers’ Deposits for
Customers’ Margin a/c
20,000Remarks
12/5 Delivery Date (4 Business Days)

Accounts Payable a/c

12,400,000 yen
Customers’ Margin Deposits
30,000,000 yen

5,000,000 yen
Money Trust a/c(or call loans)

Money Trust a/c(or call loans)
5,000,000 yen
Customers’ Margin Deposit a/c
30,000,000 yen

10,000,000 yen
Securities Received as
Customers’ Deposits for
Customers’ Margin a/c
20,000◇ In the event that the futures transaction above is settled through delivery ◇ In the event that the futures transaction above is settled through(actual receipt of stock purchased)
delivery (actual delivery of stock sold)- Final clearing price@97.60- Final clearing price@98.80- CF of deliverable bonds
1.025- CF of deliverable bonds
1.035- Book value of actual delivery of stock sold: 995,000 yen (@ 99.50)
3/10 (the next business day after the last day of a futures transaction)
Accounts Payable for Futures Futures Purchases a/c
Transactions a/c
975,300,000 yen
972,000,000 yen
Accounts Receivable a/c* (4) Gain on Futures
Transaction a/c
400
3,700

3/17 Actual receipt of stock purchased confirmation date (4business days before delivery date)* (6) Government Bonds a/c
Accounts Payable a/c
1,000,400
1,000,400,000 yen

12/10 (the next business day after the last day of a futures transaction)
Futures Purchases a/c

Accounts Receivable for
Futures Transactions a/c
979,700,000 yen
979,700,000 yen* (5) Loss on Futures
Accounts Payable a/c
Transaction a/c
8,600
8,600
12/10 Contact Date for Actual Delivery of Stock Sold
Accounts Receivable a/c
Government bonds a/c
1,022,273,000 yen
995,000,000 yen* (7) Gain on Sale of Public andCorporate Bonds a/c
22,273* (4) Gain on Futures Transactions: 3,700,000 yen =1 billion yen x (97.60 - 97.20) x 1/100 - 300,000 yen(Face Value) (Final Clearing Price) (Book Value) (Commission
Fees, etc.)* (5) Loss on Futures Transactions: 8,600,000 yen =1 billion yen x (97.97 - 98.80) x 1/100 - 300,000 yen(Face Value) (Book Value) (Final Clearing Price) (Commission
Fees, etc.)* (6) Government Bonds: 1,000,400,000 yen =1 billion yen x 97.60 x 1.025 x 1/100(Face Value) (Final Clearing Price) (CF)* (7) Gains on sales of public and corporate bonds: 27,273,000 yen =1 billion yen x (98.80 x 1.035 - 99.50) x 1/100 - 307,000 yen(Face Value) (Final Clearing Price) (CF) (Book Value) (Transaction
Tax)
Contract Price for Actually Delivered Stock Sold
@102.258(Transaction Tax = 1 billion yen x 102.258 x 1/100 x 3/10.000)(Tax Rate)Journal Entry Example

Remarks

3/20 Delivery Date
Accounts Payable a/c* (5) Money Trust a/c
1,000,400,000 yen (or call loans)
1,000,000,000 yen
Accounts Receivable a/c
400

12/20 Delivery Date
Money Trust a/c
Accounts Receivable a/c(or call loans)
1,022,273,000 yen* (9) 1,013,673,000 yen
Accounts Payable a/c
8,600

Money Trust a/c(or call loans)

Money Trust a/c(or call loans)* (8) Settlement Amount
1 billion yen= 1 billion yen x {(97.60 x 1.025) + (97.50 - 97.60)} x 1/100 +
600,000 yen(Face Value) (Final Clearing Price) (Deliverable Bond CF) (Sales
Contract Price) (Final Clearing Price) (Clearing Fees, etc.)
Contract Price for Stock Traded

Customers’ Margin Deposit a/c
30,000,000 yen
10,000,000 yen

Securities Received as
Customers’ Deposits for
Customers’ Margin a/c

Customers’ Margin Deposit a/c
30,000,000 yen* (9) Settlement amount
1,013,673,000 yen = 1 billion yen x

Securities Received as
Customers’ Deposits for
Customers’ Margin a/c
20,000

Delivery Price

10,000,000 yen

20,000{98.80 × 1.035) + (98.00 - 98.80)} × 1/100 - (600,000 yen + 307,000
yen)(Final Clearing Price) (Deliverable Bond CF) (Sales Contract Price)(Settlement Contract Price) (Fees) (Transaction Tax)

Contract Price for Actually Delivered Stock Sold
Delivery Price(Clearing Fees)(Transaction tax = 1 billion yen x 102.258 x 1/100 x 3/10,000 (taxrate))

Amount of actual delivery of stock sold(2) Special Provision for Accounting for the Contract Amount and Commission Charge (Including Consumption Tax) Converted Into Other Currencies, Such as in “Futures Transactions inJapanese Yen”
The following directive shall apply to accounting for brokerage commissions and consumption taxes on “Japanese Yen Currency Futures” and “US Dollar Short Term Interest Rate
Futures” within the Tokyo Financial Futures Exchange.
Buy Contracts

Sell Contracts

Daily Trial Balance Sheet for Japanese Currency Daily Trial Balance Sheet for Foreign Currency Daily Trial Balance Sheet for Japanese Currency Daily Trial Balance Sheet for Foreign Currency(1) A New Position
Opening(1) Contract Date

* Includes Commission (including consumption
tax)* Records Contract Amount* Includes Commission (including consumption
tax)* Records Contract Amount

Losses on Futures
Transactions, etc.

Futures Purchases

Losses on Futures
Transactions, etc.

Accounts Receivable Futures Sale
for Futures
Transactions

Accounts Payable for
Futures Transactions

Accounts Payable for
Futures Transactions

Accounts Payable for
Futures Transactions(2) Settlement Date
(1) Contract Date
Accounts Payable for Accounts Payable
Futures Transactions

Accounts Payable for
Futures Transactions

Futures Purchases

Accounts Payable for
Futures Transactions

Losses on Futures
Transactions, etc.

[Accounts
Receivable][Accounts Payable]

Losses on Futures
Transactions, etc.

(Settlement Contract
Amount)[Loss on Futures
Transactions, etc.][Gains on Futures
Transactions, etc.](Settlement Contract
Amount)[Deposit][Accounts Receivable]

Accounts Payable[Accounts Payable][Deposit]

Accounts Payable

Futures Sale

Accounts Receivablefor Futures
Transactions[Accounts Receivable] [Accounts Payable][Loss on Futures
Transactions, etc.][Gains on Futures
Transactions, etc.][Deposit][Accounts Receivable][Accounts Payable][Deposit](2) Delivery Date
Accounts Payable

Call Loans, etc.

Call Loans, etc.

14. Accounting for Option Trading
Journal entry, etc.
(Note) The term “Call Loans, etc.” in the following accounts journal means deposits, money trusts, call loans, and customers’ margin deposits.
Category
Option Trading
1. Opening Trading(1) Buy Contract(Applies to both call and put)

(2) Sell Contract(Applies to both call and put)

Calculations, etc.

Accounts Journal(1) CallNumber ofcontracted units
Contract unit priceContract priceFees
Net price
Book value
Book unit price

Number ofcontracted units
Contract unit priceContract priceFees
Net price
Book value
Book unit price

Customers’ Margin
Deposits
Customers’ Margin
Deposits
Substitute securities

Quantity of buy contracts
Buy contract unit price
Quantity of buy contracts x unit price x set multiple
Contract price + fees
Net price
Book value―――――――――――(Rounded down to the second decimal place)
Buy contract quantity x set multiple
Quantity of sell contracts
Sell contract unit price
Quantity of sell contracts x unit price x set multiple
Contract price - fees
Net price
Book value―――――――――――(Rounded down to the second decimal place)
Quantity of sell contracts x set multiple

Contract Date
Call Option (Buy)
Accounts Payable(Net Price)(Net Price)

Accounts Payable(Net Price)

Delivery Date
Call Loans, etc.
(Net Price)(2) Put
Contract Date
Put Option (Buy)
Accounts Payable(Net Price)(Net Price)

Accounts Payable(Net Price)

Delivery Date
Call Loans, etc.
(Net Price)(1) CallContract Date
Accounts Receivable
Call Option (Sell)(Net Price)(Net Price)

Call Loans, etc.
(Net Price)

Delivery Date
Accounts Receivable(Net Price)

Customers’ Margin
Deposits

Deposit Date
Call Loans, etc.
Customers’ Margin
Deposits
Substitute Securities

CategoryCalculations, etc.

Accounts Journal(2) Put
Contract Date
Accounts Receivable
Put Option (Sell)(Net Price)(Net Price)

Call Loans, etc.
(Net Price)

Delivery Date
Accounts Receivable(Net Price)

Customers’ Margin
Deposits

Deposit Date
Call Loans, etc.
Customers’ Margin
Deposits
Substitute Securities

Category
2. Closing Transaction(1) Resale(Applies to both call and put)

Calculations, etc.

Accounts Journal(1) CallNumber of contracted
units

Resale quantity

Contract unit price

Resale unit priceContract price

Resale quantity x resale unit price x set multiple

Contract Date
Accounts Receivable
Call Option (Buy)(Net Price)(Book Value)
Losses on Futures
Gains on Futures
Transactions, etc.
Transactions, etc.
(Difference < 0)
(Difference ≥ 0)

Fees
Net price
Book value of saleContract price - fees(1) Whole Resell
Full amount of book value(2) Partial Resale
Resale quantity x book unit price x set multiple

Call Loans, etc.
(Net Price)

Delivery Date
Accounts Receivable(Net Price)(2) Put
Contract Date
Accounts Receivable
Put Option (Buy)(Net Price)(Book Value)
Losses on Futures
Gains on Futures
Transactions, etc.
Transactions, etc.
(Difference < 0)
(Difference ≥ 0)

Call Loans, etc.
(Net Price)

Delivery Date
Accounts Receivable(Net Price)CategoryCalculations, etc.

Accounts Journal(1) Call(2) Repurchase(Applies to both call and put)Number of contracted
units

Repurchase quantity

Contract unit price

Repurchase unit priceContract price

Repurchase quantity x repurchase unit price x set multiple

Contract Date
Call Option (Sell)
Accounts Payable(Book Value)(Net Price)
Losses on Futures
Gains on Futures
Transactions, etc.
Transactions, etc.
(Difference < 0)
(Difference ≥ 0)

Fees
Net price
Book value of portion
soldTransaction loss or
gain
Customers’ margindeposits

Contract price + fees
(1) Full Repurchase
Full amount of book value(2) Partial Repurchase
Repurchase quantity x book unit price x set multiple
Book value of portion sold - Net priceDifference ≥ 0
Difference < 0Accounts Payable(Net Price)

Delivery Date
Call Loans, etc.
(Net Price)

Withdrawal Date
Customers’ Margin
Deposits
Customers’ Margin
Deposits
Substitute Securities
Call Loans, etc.

(2) Put
Contract Date
Put Option (Sell)
Accounts Payable(Book Value)(Net Price)
Losses on Futures
Gains on Futures
Transactions, etc.
Transactions, etc.
(Difference < 0)
(Difference ≥ 0)

Accounts Payable(Net Price)

Delivery Date
Call Loans, etc.
(Net Price)

Withdrawal Date
Call Loans, etc.
Customers’ Margin
Customers’ Margin
Deposits
Deposits
Substitute Securities

Category(3) Exercise of Rights(1) Exercise of Call Rights(a) Futures Options(Securities, interest,
currency, etc.)

Calculations, etc.
Number of contracted
unitsBook value of portion
to be exercised
Transfer amount fortransaction losses

Exercise quantity

Quantity of buy
contracts
Buy contract unit price
Buy Contract PriceFees
Buy contract net price
Customers’ margindeposits

Exercise quantity

Accounts Journal
Date of exercise
Losses on Futures
Call Option (Buy)Transactions, etc.
(Book Value)(Transfer amount fortransaction losses)

Exercise quantity x book value x set multiple
Book value of portion to be exercised

Date of exercise
Futures purchases
Accounts Payable for(Buy Contract Net Price) Futures Transactions(Buy Contract Net Price)

A. Buy Contracts

B. Sell Contracts(b) Futures Options(Index)Exercise price (= strike price)
Exercise quantity x exercise price x set multiple

Customers’ Margin
Deposits

Buy contract price + fees

Deposit Date
Call Loans, etc.
Customers’ Margin
Deposits
Substitute Securities

Equivalent to futures transactions accounting
Date of exercise
Accounts Receivable
Call Option (Buy)(Settlement Amount(Book Value)
Receivable)
Gains on Futures
Losses on Futures
Transactions, etc.
Transactions, etc.
(Difference ≥ 0)
(Difference < 0)(c) Spot Options

Settlement Amount
Receivable

Call Loans, etc.

(Index value - exercise price) x exercise quantity x set multiple

Delivery Date
Accounts Receivable- FeesDate of exercise
Losses on Futures
Call Option (Buy)Transactions, etc.
(Book Value)(Transfer amount fortransaction losses)
Accounts Payable(Net Purchase Price)
Stock certificates, bonds,
or deposits(Items purchased)

Accounts Payable

Delivery Date
Call Loans, etc.

Category- When there are shares
below the minimum trade
unit when exercising stock
options

Calculations, etc.
Settlement amountwhen below theminimum unit

(Final price of stock certificates - exercise price)
x quantity of stock options below minimum trade unit

(Final price of stock certificates - exercise price) > 0

Accounts Journal
Date of exercise
Accounts Receivable
Gains on Futures(Settlement AmountTransactions, etc.
Receivable When Below(Settlement Amountthe Minimum Unit)
Receivable When Below
the Minimum Unit)

Call Loans, etc.

Delivery Date
Accounts Receivable(Final price of stock certificates - exercise price) < 0
Date of exercise
Losses on Futures
Accounts Payable
Transactions, etc.
(Settlement Amount(Settlement Amount
Payable When Below
Payable When Below the
the Minimum Unit)
Minimum Unit)

Accounts Payable

Delivery Date
Call Loans, etc.

Category(2) Exercise of Put Options(a) Futures Options(Securities, interest,
currency, etc.)

Calculations, etc.
Number of contracted
unitsBook value of portion
to be exercised
Transfer amount fortransaction losses

Exercise quantity

Quantity of sellcontracts
Sell contract unit priceSell Contract Price
Fees
Sell Contract Net Price
Customers’ margindeposits

Exercise quantity

Accounts Journal
Date of exercise
Losses on Futures
Put Option (Buy)Transactions, etc.
(Book Value)(Transfer amount fortransaction losses)

Exercise quantity x book value x set multiple
Book value of portion to be exercised

Date of exercise
Accounts Receivable for Futures Sale
Futures Transactions(Sell Contract Net Price)(Sell Contract Net Price)

A. Sell Contracts

B. Resale(b) Futures Options(Index)

Deposit Date
Customers’ Margin
Call Loans, etc.
Deposits
Customers’ Margin
Deposits
Substitute Securities

Exercise Price
Exercise quantity x exercise price x set multiple
Sell Contract Price - Fees

Equivalent to futures transactions accounting
Date of exercise
Accounts Receivable
Put Option (Buy)(Settlement Amount(Book Value)
Receivable)
Gains on Futures
Losses on Futures
Transactions, etc.
Transactions, etc.
(Difference ≥ 0)
(Difference < 0)(c) Spot Options

Call Loans, etc.
Settlement Amount
Receivable

Delivery Date
Accounts Receivable(Exercise price - index value) x exercise quantity x set multiple- FeesDate of exercise
Losses on Futures
Put Option (Buy)Transactions, etc.
(Book Value)(Transfer amount for
Stock Certificates,transaction losses)
Bonds, or Deposits
Accounts Receivable(Items sold)(Net Sales)
Gain on Securities
Loss on Securities
Transactions
Transactions

Call Loans, etc.

Delivery Date
Accounts Receivable

Category- When there are shares
below the minimum trade
unit when exercising stock
options

Calculations, etc.
Settlement amountwhen below theminimum unit

(Exercise price - final price of stock certificates)
x quantity of stock options below minimum trade unit

(Exercise price - final price of stock certificates) > 0

Accounts Journal
Date of exercise
Accounts Receivable
Gains on Futures(Settlement AmountTransactions, etc.
Receivable When Below(Settlement Amountthe Minimum Unit)
Receivable When Below
the Minimum Unit)

Call Loans, etc.

Delivery Date
Accounts Receivable(Exercise price - final price of stock certificates) < 0
Date of exercise
Losses on Futures
Accounts Payable
Transactions, etc.
(Settlement Amount(Settlement Amount
Payable When Below
Payable When Below the
the Minimum Unit)
Minimum Unit)

Accounts Payable

Delivery Date
Call Loans, etc.

Category(4) Exercise of Rights(1) Exercising Call Rights(a) Futures Options(Securities, interest,
currency, etc.)

Calculations, etc.
Number of contracted
unitsBook value of portion
to be exercised
Transfer amount fortransaction gains

Accounts Journal
Date of exercise
Call Option (Sell)
Gains on Futures(Book Value)
Transactions, etc.
(Transfer amount fortransaction gains)

Exercise Quantity
Exercise quantity x book unit price x set multiple
Book value of portion to be exercised

Date of exercise
Accounts Receivable for Futures Sale
Futures Transactions(Sell Contract Net(Sell Contract Net Price) Price)

A. Sell Contracts

B. Resale(b) Futures Options(Index)Quantity of sellcontracts
Sell contract unit priceSell Contract Price
Fees
Sell Contract Net Price
Customers’ margindeposits

Exercise Quantity
Exercise Price
Exercise quantity x exercise price x set multiple

Deposit Date
Customers’ Margin
Call Loans, etc.
Deposits
Customers’ Margin
Deposits
Substitute Securities

Sell Contract Net Price - Fees

Equivalent to futures transactions accounting
Date of exercise
Call Option (Sell)
Accounts Payable(Book Value)(Settlement amount
Losses on Futurespayable)Transactions, etc.
Gains on Futures(Difference < 0)Transactions, etc.
(Difference ≥ 0)(c) Spot Options

Settlement amountpayableAccounts Payable(Index value - exercise price) x exercise quantity x set multiple

Delivery Date
Call Loans, etc.

+ FeesDate of exercise
Call Option (Sell)
Gains on Futures(Book Value)
Transactions, etc.
Accounts Receivable(Transfer amount for(Net Sales)transaction gains)
Loss on Securities
Stock Certificates,
Transactions
Bonds, or Deposits(Items sold)Gain on Securities
Transactions

Call Loans, etc.

Delivery Date
Accounts Receivable

Category- When there are shares
below the minimum trade
unit when exercising stock
options

Calculations, etc.
Settlement amountwhen below theminimum unit

(Exercise price - final price of stock certificates)
x quantity of stock options below minimum trade unit

(Exercise price - final price of stock certificates) < 0

Accounts Journal
Date of exercise
Losses on Futures
Accounts Payable
Transactions, etc.
(Settlement Amount(Settlement Amount
Payable When Below the
Payable When Below the
Minimum Unit)
Minimum Unit)

Accounts Payable

Delivery Date
Call Loans, etc.

(Exercise price - final price of stock certificates) > 0
Date of exercise
Accounts Receivable
Gains on Futures(Settlement AmountTransactions, etc.
Receivable When Below(Settlement Amountthe Minimum Unit)
Receivable When Below
the Minimum Unit)

Call Loans, etc.

Delivery Date
Accounts Receivable

Category(2) Exercise of put rights(a) Futures Options(Securities, interest,
currency, etc.)

Calculations, etc.
Number of contracted
unitsBook value of portion
to be exercised
Transfer amount fortransaction gains

Accounts Journal
Date of exercise
Put Option (Sell)
Gains on Futures(Book Value)
Transactions, etc.
(Transfer amount fortransaction gains)

Exercise Quantity
Exercise quantity x book unit price x set multiple
Book value of portion to be exercised

Date of exercise
Futures Purchases
Accounts Payable for(Buy Contract Net Price) Futures Transactions(Buy Contract Net Price)

A. Buy Contracts

B. Sell Contracts(b) Futures Options(Index)Quantity of buy
contracts
Buy contract unit price
Buy Contract PriceFees
Buy contract net price
Customers’ margindeposits

Exercise Quantity
Exercise Price
Exercise quantity x exercise price x set multiple

Deposit Date
Customers’ Margin
Call Loans, etc.
Deposits
Customers’ Margin
Deposits
Substitute Securities

Buy Contract Net Price + Fees

Equivalent to futures transactions accounting
Date of exercise
Put Option (Sell)
Accounts Payable(Book Value)(Settlement Amount
Losses on Futures
Payable)Transactions, etc.
Gains on Futures(Difference < 0)Transactions, etc.
(Difference ≥ 0)(c) Spot Options

Settlement amountpayableAccounts Payable(Exercise price - index value) x exercise quantity x set multiple

Delivery Date
Call Loans, etc.

+ FeesDate of exercise
Put Option (Sell)
Gains on Futures(Book Value)
Transactions, etc.
Stock Certificates,(Transfer amount for
Bonds, or Deposits
transaction gains)(Items purchased)
Accounts Payable(Net Purchase Price)

Accounts Payable

Delivery Date
Call Loans, etc.

Category- When there are shares
below the minimum trade
unit when exercising stock
options

Calculations, etc.
Settlement amountwhen below theminimum unit

(Final price of stock certificates - exercise price)
x quantity of stock options below minimum trade unit

(Final price of stock certificates - exercise price) < 0

Accounts Journal
Date of exercise
Losses on Futures
Accounts Payable
Transactions, etc.
(Settlement Amount(Settlement Amount
Payable When Below
Payable When Below the
the Minimum Unit)
Minimum Unit)

Accounts Payable

Delivery Date
Call Loans, etc.

(Final price of stock certificates - exercise price) > 0
Date of exercise
Accounts Receivable
Gains on Futures(Settlement AmountTransactions, etc.
Receivable When Below(Settlement Amountthe Minimum Unit)
Receivable When Below
the Minimum Unit)

Call Loans, etc.

Delivery Date
Accounts Receivable

Category(5) Waiver of Rights(Applies to both call and put)

Calculations, etc.
Number of contracted
unitsBook value of portion
waivedTransfer amount fortransaction losses

Waiver Quantity
Quantity waived x book unit value x set multiple
Book value of portion waived

Accounts Journal(1) Call
Waiver Date
Losses on Futures
Call Option (Buy)Transactions, etc.
(Book Value)(Transfer amount forsales/purchase losses)(2) Put(6) Expiration of Obligations(Applies to both call and put)Number of contracted
unitsBook value of expired
obligations
Transfer amount fortransaction gains

Number of expired obligations

Waiver Date
Losses on Futures
Put Option (Buy)Transactions, etc.
(Book Value)(Transfer amount forsales/purchase losses)

Quantity of expired obligations x book unit value x set multiple(1) CallBook value of expired obligations

Obligation Expiration Date
Call Option (Sell)
Gains on Futures(Book Value)
Transactions, etc.
(Transfer Amount for
Sales/Purchase gains)

Withdrawal Date
Call Loans, etc.
Customers’ Margin
Customers’ Margin
Deposits
Deposits
Substitute Securities(2) Put
Obligation Expiration Date
Put Option (Sell)
After-tax Gains on(Book Value)
Futures Transactions(Transfer Amount for
Sales/Purchase gains)

Withdrawal Date
Call Loans, etc.
Customers’ Margin
Customers’ Margin
Deposits
Deposits
Substitute Securities

Category
3. Valuation

Calculations, etc.
Buy
contracts
Sell
contract

4. Valuation Conversion

Call
Put
Call
Put

Appraised value - Book Value
Appraised value - Book ValueBook Value - Appraised value
Book Value - Appraised value

In the case of open type investment trusts, revaluation shall be made to the market value on the fundsettlement date.
Valuation gains shall be recorded as futures transaction, etc. gains,
Buy contracts
and valuation losses shall be recorded as futures transaction, etc.
Same between call/put
losses.
Sell contract
Same as above
Same between call/put

Accounts Journal
Every day
Valuation Gain or Losson Futures Transactions,etc.

[Buy Contracts](1) CallFund Settlement Date
Call Option (Buy)
Gains on Futures(Valuation Margin)
Transactions, etc.
(Valuation Margin)
Losses on Futures
Transactions, etc.
Call Option (Buy)(Valuation Loss)(Valuation Loss)(2) Put
Fund Settlement Date
Put Option (Buy)
Gains on Futures(Valuation Margin)
Transactions, etc.
(Valuation Margin)
Losses on Futures
Transactions, etc.
Put Option (Buy)(Valuation Loss)(Valuation Loss)CategoryCalculations, etc.

Accounts Journal[Sell Contracts](1) CallFund Settlement Date
Call Option (Sell)
Gains on Futures(Valuation Margin)
Transactions, etc.
(Valuation Margin)
Losses on Futures
Transactions, etc.
Call Option (Sell)(Valuation Loss)(Valuation Loss)(2) Put
Fund Settlement Date
Put Option (Sell)
Gains on Futures(Valuation Margin)
Transactions, etc.
(Valuation Margin)
Losses on Futures
Transactions, etc.
Put Option (Sell)(Valuation Loss)(Valuation Loss)
5. Change in Number of
Shares(Applies to both call and put)

- Open interest will be adjusted when the number of unit shares (not accompanying a change in face value)of stock options changes.
No entry to the Account Journals(E.g.) Changing trade unit from 1,000 shares to 100 shares- Option contract unit number 1 -> 10

6. Ex-Rights Accounting(Applies to both call and put)

- When a stock split, reverse stock split, or paid capital increase for the stock options occurs, the ex-rights
price will be adjusted on the ex-rights date, etc., based on the stock split/reverse stock split ratio.

No entry to the Account Journals

CategoryCalculations, etc.

Accounts Journal- The number of stock certificates subject to options for one unit of stock options shall be adjusted basedon the relevant stock split ratio, etc., when the exercise price is adjusted.
However, when the adjusted quantity is an integer multiple of the trading unit of the stock subject tooptions, the quantity shall not be adjusted, and the open interest shall be adjusted based on the relevant
stock split ratio, etc.

(Example 1) Stock Split of 1:1.1- The trading unit of subjected stock certificates per option (set multiple).
- Adjustment of exercise price- 1,000 shares -> 1,100 shares- Exercise price after split= Exercise price before split ÷ 1.1(Example 2) Stock Split of 1:2- The trading unit of subjected stock certificates per option (set multiple).
- Number of option contract units- Adjustment of exercise price- No change- Change from 1 -> 2
- Exercise price after split= Exercise price before split ÷ 2

15. Accounting for Corporate Bonds with Detachable Stock Subscription Warrants

Category
1. Corporate Bonds with Stock

Accounting Method

Accounts Journal When cum warrants are acquired, the amount required for acquisition

Subscription Warrants(excluding existing accrued interest) shall be separated into corporate

Processing For Cum Warrants

bond certificates (ex-warrants) and tock subscription warrant securities

Upon Acquisition(warrants) on the contract date for accounting purposes.

- Calculation of Book Value <When Not Listed>(1) Ex-Warrants(i)- Contract Date -Contract unit price = Latest standard indicative price(Corporate Bond Certificates) xxx(Note) The standard indicative price issued by the Japan(Accounts payable) xxx

Securities Dealers Association every Thursday shall apply from

(Stock subscription warrant securities) xxx

Friday to Thursday of the following week.
(ii) Contract price = Purchase face value x contract unit price÷100(iii) Book value = Contract priceCorporate bonds = (1)-(iii)
Stock subscription warrant securities = (2)-(iii)
Accounts payable = Cum warrants contract price(2) Warrants(i)- Delivery Date -Contract unit price =(Accounts payable) xxx (Call loans) xxx(contract unit price of cum warrants) - (contract unit price of ex-(Prepaid Expenses) xxx or money trust

warrant)(ii) Contract price =Number of warrants x (value of corporate bonds per warrant) x
unit contract price ÷ 100(iii) Book value = Contract pricePrepaid expenses= Existing accrued interest when cum warrants are acquired(= contract price of cum warrants - contract price of ex-warrant)
Call Loan = Amount received when cum warrants are acquired`Category<When Listed>

Accounts Journal(1) Ex-Warrants(i)Contract Unit Price(Closing price of cum warrants on the day before the contractdate) - (Closing price of warrants on the day before the contract
date)(Note) If there is no closing price available for either, use
the closing price on the closest date where closing prices
are available for both. (Value used to calculate securities
transaction taxes)(ii) Contract Price...Same as when not listed(iii) Brokerage Commission = (Brokerage commission at the time cum
warrants are acquired)(Rounded down to the nearest yen) x (Contract unit price forwarrants) /(Contract unit price for cum warrants)(iv) Book value = contract price + brokerage commission(2) Warrants(i)Contract unit price = (contract unit price for cum warrants) (contract unit price for ex-warrants)(ii) Contract Price...Same as when not listed(iii) Brokerage Commission = (brokerage commission at the time cum
warrants are acquired) - (brokerage commission at the time exwarrants are acquired)(iv) Book value = contract price + brokerage commission
2. Method For Managing
Balances Ex-warrants shall be individually managed in the same way as
conventional public and corporate bonds. Under certain conditions,stocks of the same issue can be merged. Warrants of a single issue aremanaged together by taking the average book value of each purchase, as
is done for stocks.

- Contract Date, Delivery Date The same account journal as when not listed.

Category

Accounting Method

Accounts Journal

Unit book value of warrants =Book value of warrants ÷ (number of warrants x face value ofcorporate bonds per warrant) x 100

3. Accounting When Warrants
Are Sold When only warrants are sold, a securities transaction tax equivalent tothose levied on stocks shall be collected.
(i)- Contract Date (Accounts receivable) xxx (Stock subscription warrant securities) xxx

Contract Price... Same as 1-(2)-(ii).

(Gain on securities transactions) xxx(ii) Brokerage commissions .... Calculated the same as for stocks(iii) Securities transaction tax = Contract price x 55/10,000(Rounded down to the nearest yen)(iv) Delivery amount = Contract price - brokerage commission securities transaction tax(v)

Accounts receivable= (iv)

Stock subscription warrant securities = (v)Gain (or loss) on securities transactions) = (vi)Book value of portion sold = Number of warrants x (amount ofcorporate bonds per warrant)(amounts under one yen rounded down) x unit book value ÷ 100(vi) Profit or loss on trade = Delivery amount - book value of portionsold- Delivery Date (Call loans) xxx(Accounts receivable) xxx
Or money trust

4. Accounting When Rights Are  The book value of shares acquired through the exercise of rights shall
Exercisedbe the payment amount plus the book value of the warrants. As such,the book value of the warrants will be transferred to the book value of- Date of Exercise (Stock certificates) xxx(Stock subscription warrant securities) xxx

the shares.

(Call loans) xxx(i)

Or money trust

Acquired shares = (Number of warrants x face value of bonds per
warrant) x grant ratio(Amounts less than one share rounded down) x Exercise ratio ÷
Exercise price(ii)

Payment amount = Acquired shares x exercise price(iii) Book value = Payment amount + warrant book value

Stock certificates = (iii)
Stock subscription warrant securities = Book value of warrant
Call Loan = (ii)Category

Accounting Method

Accounts Journal

5. Accounting for Warrants

 When the exercise period expires, warrants will cease to have any rights- Expiration Date of Exercise Period -when the Rights Exercise Period

or asset value. As such, the book value of the warrant shall be zero, and(Loss on securities transactions) xxx

Ends

the total value shall be recorded as a loss.

(Stock subscription warrant securities) xxx

6. Accounting When Cum
Warrants Are Sold The sales proceeds from cum warrants (excluding existing accrued
interest) shall be separated into ex-warrants and warrants on thecontract date, and the trading profit/loss shall be calculated individually.
(1) Ex-Warrants(i)Contract unit price ............... Same as market listing when
acquired- Contract Date (Accounts receivable) xxx(Corporate bonds) xxx(ii) Contract price ................... Same as 1-(1)-(ii)(Stock subscription warrant securities) xxx(iii) Brokerage commission: Same as market listing when acquired(Gain on securities transactions) xxx(iv) Securities transaction tax = Contract price x 4.5/10,000(Rounded down to the nearest yen)(v) Sales proceeds = Contract price - trade commission - securities
transaction tax(vi) Book value of portion sold: Calculated according to the current
method for public and corporate bonds(vii) Trading profit or loss = Sales proceeds - book value of sale

Accounts receivable = (1)-(v) + (2)-(v)Corporate bonds = (1)-(vi)Stock subscription warrant securities = (2)-(vi)Gain (or loss) on securities transaction = (1)-(vii) + (2)-(vii)
However, in situations other than when both ex-warrants and warrants
experience trade gains or losses, journal entries are to be madeseparately.

(2) Warrants(i)Contract unit price = (contract unit price for cum warrants) -- Delivery Date -(contract unit price for ex-warrants)(Call loan) xxx(Accounts receivable)

×××(ii) Contract Price... Same as 1-(2)-(ii).

(Prepaid Expenses)

×××(iii) Brokerage commissions..... Same as pro rata method used during(Accrued Interest Income)×××(Interest Income)×××

acquisition(iv) Securities transaction tax...... Same as 3-(iii)(Rounded down to the nearest yen)(v) Sales price...........Same as 3-(iv)(vi) Book value at the time of sale.........Same as 3-(v)(vii) Trading profit or loss ............. Same as 3-(vi)Category

Accounting Method

7. Daily Valuation and Closing  Listed warrants are valued daily at the market closing price.
Revaluation

When closing the accounts at the end of the term, perform revaluationfor open type trusts.

8. About Cum Warrants Bonds

 The transaction amount is to be separated into ex-warrants and warrants

Denominated in Foreignon the execution date.

Currencies

This shall be done according to Japanese separation methods.
(1) Ex-Warrants
Contract unit price = the OTC indicative bid price quote on thedate of purchase
Corresponds to warrants issued in Japan hereinafter.
(2) Warrants
Contract price = contract unit price of cum warrant) - (contract
unit price of ex-warrant)
Corresponds to warrants issued in Japan hereinafter.

Accounts Journal

16. Accounting for Euroyen Bonds(1) Accounting for Euroyen Bonds (excluding Euroyen Dual Currency Bonds; the same shall apply
hereinafter ) shall be as follows:(a) Euroyen bonds shall be accounted for in the daily trial balance sheet for Japanese currency.
(b) The bond account shall be classified according to domestic bond classification.
(c) Accounting for deposits and withdrawals related to sales and interest payments, etc. shall be donein the deposit account.
(d) In the event that the amount of deposited in (c) is used in Japan or appropriated for payment
within Japan, the destination of the deposit shall be changed (that is, an account transfer).
(2) Accounting for Euroyen Dual Currency Bonds shall be as follows:(a) Euroyen Dual Currency Bonds shall be accounted for in the daily trial balance sheet for foreign
currency displayed in yen.
(b) When bonds are redeemed, payment shall be accounted for in the daily trial balance sheet of theforeign currency received.
(i)Gains or losses on bond redemption shall be calculated in Japanese yen and accounted for in theforeign currency daily trial balance sheet displayed in yen. In this case, the amount of foreign
currency received is converted into Japanese yen at the customer rate on the same day.

(ii) After the accounting in (i) above, yen shall be transferred from the daily trial balance sheet for
the foreign currency displayed in yen to the daily trial balance sheet in Japanese yen. When
doing so, the same procedures for selling foreign currency shall apply.
(iii) Account for the purchase of foreign currency equivalent to the amount of foreign currency
received in redemption of bonds in the daily trial balance sheet in Japanese yen.
(c) Remittances of foreign currency assets displayed in yen shall be accounted for in the same way astransfers accompanying sale of foreign currency.
(3) Journal entry examples for Euroyen Bonds and Euroyen Dual Currency Bonds are as follows:(1) Journal Entry Example for Euroyen Bonds

Category

Account Journal (Assets Denominated in Japanese Currency)

1. Purchase Contract Date

(Bonds)×××(Accounts Payable)

2. Date of Deposit Destination Change(D e p o s i t)

×××

(Call Loans)
Or money trust

3. Purchase Delivery Date

(Accounts Payable)

×××(D e p o s i t)

4. Sales Contract Date

(Prepaid Expenses)

×××

5. Sale Delivery Date

(Accounts Receivable)

×××(D e p o s i t)

×××

(B o n d s)(Gains on Securities Transactions)(Accounts Receivable)

6. Date of Deposit Destination Change(Call Loans)
Or money trust

×××(D e p o s i t)

7. Recording of Accrued Interest Income(Accrued Interest Income)×××(Interest Income)8. Interest Deposit(D e p o s i t)

×××

(Accrued Interest Income)(Prepaid Expenses)(Interest Income)Remarks* Journal entry examples on delivery dates and payment dates, etc., should bemade on the date the respective notification was made.

(2) Journal Entry Example for Euroyen Dual Currency Bonds
Accounts Journal
Category

Remarks
Assets Denominated in Japanese Currency (Yen)

Assets Denominated in Foreign Currency (Yen)

1. Purchase Contract Date

No treatment(Bonds)xxx(Accounts Payable)

×××

2. Date of Yen Remittance(Foreign Investment a/c) xxx(Call loans) xxx
Or money trust(Deposit)

xxx(Foreign Currency Fund)×××

3. Purchase Delivery Date

No treatment(Accounts Payable)(Prepaid Expenses)

4. Recording of Accrued
Interest Income

No treatment(Accrued Interest Income) xxx (Interest Income)

5. Interest Deposit Date

No treatment(Deposit)

6. Sales Contract Date

No treatment(Accounts Receivable)
××× (Bonds) ×××(Losses on Securities Transaction) xxx(Gain on securities transactions) xxx

7. Sale Delivery Date

No treatment(Deposit)

×××

xxx (Deposit) ×××
xxx- Process once delivery is complete

×××(Accrued Interest Income) ×××(Prepaid Expenses)
×××(Interest Income)×××

×××(Accounts Receivable)(Accrued Interest Income)(Prepaid Expenses)(Interest Income)- Bond account is a temporary category(The same shall apply hereinafter)- If the contract is made on the Tokyo
OTC market, journal entries shall bemade at the date of purchasedelivery.

×××
×××
×××
×××

- Process when interest is deposited- Process once delivery is complete

Accounts Journal
Category

Remarks
Assets Denominated in Japanese Currency (Yen)

8. Closing Date
Revaluation(For Open Type Trusts)(Foreign Investment Accounts)
×××(Gain on securities transactions)(Losses on Securities Transaction) xxx(Foreign Investment Accounts)

9. Accounting for Bond
Redemption

10. Yen Transfer Day(Deposit) ×××(Foreign Investment Accounts)(Gains on Securities Transactions)(Foreign Investment Accounts)(Deposit)(Deposit) ×××

xxx

×××

×××
×××

×××

(Foreign Investment Accounts)(Gains on Securities Transactions)

×××

×××
×××

Assets Denominated in Foreign Currency (Yen)(Bonds) ×××(Gains on Securities Transactions)(Gains on Securities Transactions)
×××(Foreign Currency Funds)(Loss on Securities Transaction)
×××(Bonds)(Foreign Currency Funds)×××(Loss on Securities Transaction)- Valuation Gains×××- Valuation Losses
×××

×××
×××

- Yen (Deposit)
×××(Bonds) ×××(Loss on Securities Transaction)
×××(Gain on securities transactions)xxx(Foreign Currency Funds) ×××(Deposit)
×××(Gains on Securities Transactions)
×××- Daily Trial Balance Sheet for Currency Received as
Redemption (Deposit)×××(Foreign Currency Funds)
×××(Foreign Currency Funds) ×××(Deposit)
×××(Gains on Securities Transactions)

×××- Deposit = Amount of foreign
currency received asredemption x averagerate- Gain or Loss on Securities
Transaction= Deposits - Bond Book Value- Same as accounting for sales offoreign currency- Redemption proceeds received inforeign currency

17. Accounting for Domestic Negotiable Certificates of Deposit (CD)Category
1. Accounting for Purchase
Date (Delivery Date)

Account Journal
Deposit ×××

2. Recording of Accrued
Interest Income

Accrued Interest Income

×××

Remarks

Call Loans
×××(or money trusts)

Account Category: Deposits
Amount Recorded: Purchase priceInterest Income

Accounting Period: Calculated daily starting the day following the date ofpurchase until the date of sales (delivery date)Amount recorded: Daily rate of interest including tax

×××<Formula>
Per day: Maturity principal and interest (or sales amount) - purchase price=Accrued interest income
No. of days
(Rounded down to the nearest yen)
Maturity principal and interest = face value x (1 + rate on certificate x
number of days/365)(Rounded down to the nearest yen)
No. of days: From the purchase date to the date of maturity (or date ofsales), excluding the first or last day
3. Accounting for Maturity
Date or Date of Sales(Delivery Date)

Call Loans
×××(or money trusts)
Accounts Receivable

×××

Deposit ×××
Accrued Interest Income
Interest Income ×××

×××

Call Loan: Maturity principal and interest or sales amount. However, if apurchase is made midway through the period and held until thematurity date, withholding tax (20%) will be applied to theinterest for the non-holding period.
Accounts receivable: Withholding taxes at maturity date
Deposits: Purchase priceAccrued interest income: The deducted amount of accrued interest income
recordedInterest income: Difference occurred on the maturity date or date of sales<Formula>Interest income = Maturity principal and interest (or sales amount) (purchase price + accrued interest income per day x no. of
days)
Maturity principal and interest: Amount including tax
No. of days: From the purchase date to the date of maturity or sales,
excluding the first or last day

18. Accounting for Commercial Paper (Including Short-Term Bonds, etc.)
Commercial Paper (including short-term bonds, etc.) shall be calculated at the acquisition value in the Other
Securities account, and discount charges shall be recorded daily as interest income and accrued interest income.

19. Accounting Accompanying Conversion of Shareholder Benefits
The amount of shareholder benefits converted shall be recorded in Other Revenue without delay upon receipt.

20. Accounting of Borrowed Funds
Category
I. Account Processing for Loans

Accounting Method
1. Calculate the amount of the loan (repayment amount). Interest
expenses are not included.

II. Creating New Accounts

1. Interest Expense Accounts(Liability Account).... Accrued Interest Expense(Loss Account).... Interest Expense(1) The interest expense for loans shall be recorded.
(2) Interest expense shall be treated as negative income gain.

III. Calculating Interest Expense

1. To be recorded collectively on the borrowing date.

IV. Loan Amounts Denominated

1. This shall be the Foreign Exchange Accounts Receivable pertaining toin Foreign Currencyinternal transfers of accounts receivable denominated in foreign
currency.

Transaction

Account Journal

Description

1. Date of Loan

Call Loans: ×××

Loans: ×××

Interest Expense: ×××
Call Loans:×××

Loans: ×××

Interest Expense: ×××

Accrued Interest Expenses:

When interest is paidin advance
When interest is paid
afterward

×××
2. Reimbursement
Date

Loans: ×××
Accrued Interest Expenses: ×××

Call Loans: ×××

When interest is paid
afterward

21. Accounting for Loaned Stock Certificates
Category

Accounting Method

I. Accounting for Loaned Stock Certificates

1. No new account titles prescribed in the ministry orders shall be created, and as such there is no
separation of book values.
2. Loaned stock certificates are managed in the “Securities Loaned” and “Loan Transaction Securities”
accounts.
3. Loaned stock certificates are managed separately for each share issue.

II. Collateral(Acceptance of Collateral Money for Lending
Shares)1. Lending shares are accepted as trust property.

III. Creating New Accounts

1. Loaned Stock Certificates
Asset Account.................Securities Loaned
Liability Account............Loan Transaction Securities(1) The market value of the loan on the day before the loan closing date shall be recorded.
(2) To be recorded on the date the loan was made and to be withdrawn on the return date.
(3) Offset through an account transfer on the closing date and transfer back at the beginning of thefollowing fiscal term.
2. Account for Collateral Received
Asset Account.................Securities Received as Customers’ Deposits for Cash Collateral Received
Liability Account............Cash Collateral Received(1) The received amount of cash collateral for loaned shares sold shall be recorded. When securities
are accepted instead, the collateral value shall be recorded.
(2) To be recorded on the date the loan was made and to be withdrawn on the return date.
3. Interest Expense AccountLiability Account............Accrued Interest Expenses
Loss Account..................Interest expense(1) The interest expense on cash collateral for loaned shares sold shall be recorded daily.
(2) To be recorded on the date of the loan and to be withdrawn on the payment date.
(3) Interest expense shall be treated as negative income gain.

IV. Share-Lending Commission

1. Accounts to Be Recorded
Asset Account.................Other Accrued Revenue(Share-Lending Commission)
Profit Account ................Other Revenue(1) To be recorded daily starting on the date of the loan and to be withdrawn on the payment date.
(2) Share-lending commission shall be treated as income gain.

Category

Accounting Method

V. Overdue of Relevant Ex-Rights Stocks

1. Cancellation of Dividends
Cancelled on the last business day of the month.
2. An amount equivalent to dividends shall be recorded.
3. Accounts to Be Recorded
Asset Accounts............... Other Accrued Revenue
Profit Account ................ Other Revenue
To be recorded on the last business day of the month and withdrawn on the date of payment ofdividends.

VI. Overdue Capital Increase/Split/Ex-Rights
of Stock (For Stock Subscription Warrants
and Rights to Receive Stock ThroughStock Splits)

1. Accept certificates of deposits for various rights.
2. Accept new shares in exchange for certificates of deposit on the date new shares are issued andonward.
3. Processing on the date of ex-rights shall not be revoked.
4. Shares less than one unit shall be liquidated in cash. (Sale of Fractional Shares)(The commodity portion and the loan portion are processed separately in processing sales of sharesless than one unit)

VII. Settlement of Accounts

1. Accounting(1) The Securities Loaned Account and the Loan Transaction Securities Account shall be offset
through transfers.
(2) At the start of the period, these will be returned through retransfer.
2. Account Settlement Report(1) The number of loaned shares per issue shall be written in the remarks column of the securities
statement.
(2) For transactions with interested parties, state the total market value at the time of the loan.

Transaction
1. Time of Loan

2. Time of Loan Agreement
Execution
10/23/95 (Mon)

Account Journal(Balance)
Stock Certificates 150,000,000

No account processing

Description
100,000 shares of Issue A, holds book value of 150,000,000@ 1,500 Yen

Lend 30,000 shares of Stock A.
(Loan Date: 10/25/94 (Wed), Repayment date: 10/26 (Thu), Daily borrowing
rate: 60 sen)

Transaction

Account Journal

3. Business Day Before Dateof Loan
10/24 (Tue)Description
Current price of Issue A: 2000 yen

10/25
4. Date of Loan
(1) Securities Loaned
60,000,000

Loan Transaction Securities
60,000,000(2) Call Loans

Cash Collateral Received
60,000,000

60,000,000(3) Securities Received as
Cash Collateral Received
Customers’ Deposits for Cash
Collateral Received
×××
×××(1) Record loan amount for loaned stock certificates‐
The amount to be recorded is the market value on the day before the date ofloan.
(2) Record collateral‐The received amount of cash collateral for loaned shares sold shall berecorded.
(3) When accepting substitute securities‐
The collateral price shall be recorded.

5. Recording of Interest
10/26
Expense on Share-lending
Commission and Cash
(1) Other Accrued Revenue
Other Revenue(1) Record share-lending commission
Collateral for Loaned Shares
18,00018,000 ‐Number of lending shares x lending rate
Sold(2) Interest Expense
Accrued Interest Expenses
30,000 × 0.60 = 18,000
2,794
2,794 (2) Recording of interest expense on cash collateral for loaned shares sold
60,000,000 × 0.0170 ÷ 365 = 2,794

6. Reimbursement Date

10/26
(1)
(1) Loan Transaction
Securities Loaned(2)
Securities
60,000,000
60,000,000 (3)(2) Cash Collateral Received Call Loans
60,000,000
60,000,000(3) Cash Collateral Received Securities Received as
Customers’ Deposits for Cash
Collateral Received
×××
×××

Repayment of loaned share certificates
Repayment of cash collateral
Repayment when accepting substitute securities

Transaction
7. When Participating in the
Share Lending Market theFollowing Day Onward

Account Journal
Repeat 2 to 6 above

i. Loaned Share Issues
ii. Number of Loaned Sharesiii. Market Value of Loaned Share Issues
iv. Share Lending Rate
v. The amount in the account journal varies daily based on interest rate on cash
collateral for loaned shares sold

8. Date of Share-Lending
10/31
Commission Settlement(The clearing day falls on the (1) Call Loans
Other Accrued Revenue
last business day of a month.)
18,00018,000(2) Accrued Interest Expenses Call Loans
2,794
2,794

9. Overdue Lending Contracts[For Overdue Lending of
Settled Share Issues (October
Ex-Dividends)]
Date of loan: 10/31
Repayment date: 11/1
Correction of Dividends

Description

(1)
(2)

Receipt of share-lending commission
Payment of interest on cash collateral for loaned shares sold

10/31
(1) Dividend Income

Accrued Dividends
150,000 Receivable(2) Other Accrued Revenue
150,000
Other Revenue
150,000
150,000(1) Cancellation of accrued dividends receivable(30000 shares, estimated unit price 5 yen)
30,000 × 5 = 150,000(2) An amount equivalent to dividends shall be recorded.
30,000 × 5 = 150,000

Transaction
10. When the Amount
Equivalent to Dividends is
Deposited as Expected
Late January, 1996

Account Journal

Description

1/XX/96(1) Call Loans
150,000(2) Other Accrued Revenue
150,000

11. When Exceeding theLending Period (For Stock
Subscription Warrants andRights to Receive Stock
Through Stock Splits)

No account processing

12. Date of New Share Issue

No accounting (merge old and new)(1) Deposit Amount
30,000 × 5 = 150,000(2) In (9)-(2) of the above: 150,000

Receive deposit receipts for various rights from lending counterpart (JSF) on
10/31.

i. Receive new shares in exchange for certificates of deposit.
ii. Shares less than one unit shall be liquidated in cash.
(The trust bank portion and the loaned share portion are processed separately inprocessing sales of shares less than one unit)

13. Fund Closing Date

14. Beginning of theFollowing Fiscal Term

Loan Transaction Securities
×××

Securities Loaned

Securities Loaned

Loan Transaction Securities
×××

×××

×××

* Transfers between the Securities Loaned Account and the Loan Transaction
Securities Account are conducted and offset at the end of the fiscal term, thenreturned at the start of the following term.

22. Accounting for Loaned Bonds
Category

Accounting Method

I. Accounting for Loaned Bonds

1. No new account titles prescribed in the ministry orders shall be created, and as such there is no
separation of book values.
2. Loan bonds are managed in the “Securities Loaned” and “Loan Transaction Securities” accounts.
3. Loaned bonds are managed separately for each issue.

II. Acceptance of Real Property Collateral

1. Not accepted as trust property, but may be accepted.
2. Substitute securities are not valuated.

III. Creating New Accounts

1. Loaned Bonds Account
Asset Account.................Securities Loaned
Liability Account............Loan Transaction Securities(1) The face value amount of the loan shall be recorded.
(2) To be recorded on the date the loan was made and to be withdrawn on the return date.
(3) Offset through an account transfer on the closing date and transfer back at the beginning of thefollowing fiscal term.
2. Account for Collateral Received
Asset Account.................Securities Received as Customers’ Deposits for Cash Collateral Received
Liability Account............Cash Collateral Received(1) The collateral price shall be recorded.
(2) To be recorded on the date the loan was made and to be withdrawn on the return date.
3. Interest Expense AccountLiability Account............Accrued Interest Expenses
Loss Account..................Interest expense(1) The interest expense for cash collateral shall be recorded daily.
(2) To be recorded on the date of the loan and to be withdrawn on the payment date.
(3) Interest expense shall be treated as negative income gain.

IV. Share-Lending Commission

1. Accounts to Be Recorded
Asset Account.................Other Accrued Revenue
Profit Account ................Other Revenue
2. To be recorded daily starting on the date of the loan and to be withdrawn on the payment date.
3. Bond-lending commission shall be treated as income gain.

Category

Accounting Method

V. Recording of Accrued Interest Income

1. Loaned portions and non-loaned portions shall not be recorded separately.
2. When an amount equivalent to interest after taxes is deposited in a loan that has an interest payment
date during the loan period, the amount equivalent to the tax shall be cancelled from interest income.
1. Accounting

VI. Settlement of Accounts(1)

The Securities Loaned Account and the Loan Transaction Securities Account shall be offset
through transfers.

(2)

At the start of the period, these will be returned through retransfer.

2. Account Settlement Report(1)

The face value of the loan per issue shall be written in the remarks column of the securities
statement.

(2)

For transactions with interested parties, the total lending amount shall be stated.

(Monthly Report to Investment Trust Association)
Transaction
1. Time of Loan

Account Journal(Balance)#156 Face value of Japanese Government Bond Securities: 10,000,000,000, book

National Government Bondvalue of 101.50 held

Securities(Date of interest payment: 3/9/20, Rate of interest: 4.2%)

10,150,000,000

Loan of 3 billion yen at face value.

2. Time of Loan Agreement

No account processing

Execution

3. Date of Loan

Description(Date of loan: 1/18/94, Repayment date: 1/25, Bond-lending commission: 0.
0025)(Transfer)

1/18(1) Securities Loaned (Assets)

Loan Transaction Securities(1) Recording of Loan Bonds‐
The amount to be recorded shall be the face value of the loan.

(Liabilities)

4. Acceptance of Collateral

3,000,000,000

3,000,000,000

×××

Cash Collateral Received(Liabilities)
×××(1) Call Loans(2) Securities Received as
Customers’ Deposits for
Cash Collateral Received(Assets)
×××

Cash Collateral Received(Liabilities)
×××

(1)

Acceptance of cash collateral(2)

Acceptance of substitute securities

Transaction
5. During the Loan Period

Account Journal(Transfer)

Description

1/19 - 1/24

(1) Recording of the amount equivalent to interest on loaned bonds(1) Accrued Interest Income Interest Income‐ Loaned portions and non-loaned portions shall not be recorded separately.
1,150,684
1,150,684 10,000,000,000 × 0.042 ÷ 365 = 1,150,684(2) Other Accrued Revenue
Other Revenue(2) Recording of bond-lending commission
20,547
20,547‐ Face value of loan x bond-lending commission rate x loan period(3) Interest Expense
Accrued Interest Expenses‐ Bond-lending commission shall be recorded daily.
×××
××× 3,000,000,000 × 0.25 ÷ 365 = 20,547(Transfer)

1/25

6. Reimbursement Date
(1) Loan Transaction
Securities Loaned
Securities
3,000,000,000
3,000,000,000(2) Call Loans
Other Accrued Revenue
143,835
123,282
Other Revenue
20,553(3) Recording of interest expenses for cash collateral‐ Interest expense shall be recorded daily.
(1) Repayment of Loaned Bonds(2) Acceptance of bond-lending commission (deposit date)
3,000,000,000 × 0.0025 × 7 ÷ 365= 143,835... Amount received
20,547 x 6 = 123,282... Amount deducted from accounts receivable
143,835 - 123,282 = 20,553 ...Amount recorded on final date

7. Repayment of Collateral(1) Cash Collateral Received Call Loans×××××× Securities Received as(2) Accrued Interest
Customers’ Deposits for CashExpenses
××× Collateral Received
×××
Interest expense
×××
Call Loans
×××

8. Closing Date

Loan Transaction Securities Securities Loaned
3,000,000,000
3,000,000,000

9. Beginning of the Following
Securities Loaned
Loan Transaction Securities
3,000,000,000
3,000,000,000(1)

Repayment of Collateral(2)

Payment of Accrued Interest Expenses (Payment Date)* Transfers between the Securities Loaned Account and the Loan Transaction
Securities Account are conducted and offset at the end of the fiscal term, thenreturned at the start of the following term.

23. Accounting for Borrowed Bonds
Category

Accounting Method

I. Accounting for Borrowed Bonds

1. Borrowed Bond Account
Asset Account.................Borrowing Trade Securities
Liability Account............Securities Borrowed
The loan amount shall be recorded.
2. Corporate bonds shall be managed separately for each issue.

II. Recording of Income Related to Cash
Collateral

1. Accounts to Be Recorded
Asset Account.................Other Accrued Revenue
Profit Account ................Other Revenue
Revenue related to cash collateral shall be recorded.

III. Recording Bond-Borrowing Commission

IV. Recording of Accrued Interest Income on
Borrowed Bonds

Accounts to Be Recorded
Liability Account............Other Accrued Expenses
Loss Account ..................Other Expenses

1. Accrued interest income on borrowed bonds shall not be recorded.
2. When interest is deposited for borrowing that has an interest payment date during the loan period, it
shall be paid to the lender.

Account Journal for Borrowed Bonds
Transaction
1. Date of Conclusion ofLoan Agreement

Account Journal

Description

No account processing

2. Loan Issue Date

Loan date: August 24, Repayment date: August 30
Loan face value: 100 million yen
Loan unit price: 93.75 yen
Loan amount: 93,750,000 yen
Loan rate: 0.18% per annum
Interest rate on security deposit: 0.50% per annum
8/24

Borrowing Trade Securities
Securities Borrowed
93,750,000
93,750,000
Guarantee Deposits
Call Loans
93,750,000
93,750,000

3. Bond-Borrowing
Commission During Loan
Period8/25 - 8/30
Other Expenses

Other Accrued Expenses
493

Interest accrued on cash
collateral

Other Accrued Revenue
Other Revenue
1,284

493

100,000,000 yen x 0.18% x 1 ÷ 365

1,284

93,750,000 yen x 0.50% x 1 ÷ 365

Transaction

Account Journal

4. Reimbursement Date

8/30
Securities Borrowed
Borrowing Trade
93,750,000 Securities
93,750,000
Other Accrued Expenses Call Loans
2,958
2,958
Call Loans
Guarantee Deposits
93,757,704
93,750,000
Other Accrued Revenue
7,704

5. Closing Date

Securities Borrowed
93,750,000

Description

Borrowing Trade
Securities
93,750,000* Transfers between securities borrowed and borrowing trade securities are
performed and offset at the end of the fiscal term, then returned at the start of
the following term.

6. Start of Following Fiscal
Year

Borrowing Trade
Securities
93,750,000

Securities Borrowed
93,750,000

24. Accounting for Swap Transactions
Category

Accounting Method

I. Account Processing for Swap Transactions

1.
2.

No new account titles prescribed in the ministry orders shall be created.
The notional amount of the principal related to the swap contract shall be included in the accounts of“Notional Principal Receivable Assets / Corresponding Account of Notional Principal Receivable Assets” and“Notional Principal Payable Liability / Corresponding Account of Notional Principal Payable Liability.”
However, accounting for credit default swap transactions is as per the journal entry example.
(1) To be recorded on the date of execution of the contract.
(2) Swap transactions shall, in principle, be valued at market value.
(3) For open type investment trusts, revaluation shall be made on the closing date.

II. Creating New Account Titles

1.

Accounts for Swap Transactions
Asset Account …… Notional Principal Receivable Assets ……Principal for receipt of interest
Corresponding Account of Notional Principal Payable Liability …… Corresponding
account of principal for payment of interest
Liability Account ……Corresponding Account of Notional Principal Receivable Assets …… Corresponding
account of principal for receipt of interest
Notional Principal Payable Liability …… Principal for payment of interest
Accrued Interest Expenses ……Amount of account payable for payable swap interest
Loss Account …… Interest Expenses ……Payable swap interest

III. Receivable Swap Interest

IV. Payable Swap Interest[Use of Current Accounts](1) Receivable Swap Interest ……Accrued Interest Income, Interest Income(2) The amount of accrued interest income and expenses on interim settlement ……Account Receivable,
Account Payable(3) Amount of Gain or Loss on Interim Settlement …… Gains on Futures Transactions, etc., Losses on
Futures Transactions, etc.
(4) Gain or Loss on Valuation ……Valuation Gain or Loss on Futures Transactions, etc.
1.
2.

1.
2.

3.

Receivable Swap Interest shall be recorded on a daily basis. Additionally, it will not be set off against the
Payable Swap Interest.
Accounts to be Recorded(Assets) Accrued interest income(Profits)
Interest Income
The Payable Swap Interest shall be recorded on a daily basis. Additionally, it will not be offset against theReceivable Swap Interest.
Accounts to be Recorded(Losses) Interest Expenses(Liabilities)
Accrued Interest Expenses
The Payable Swap Interest shall be treated as negative income gain.

Category

Accounting Method

V. Valuation

1.
2.

VI. Settlement of Accounts

1.

Valuation shall in principle be conducted on a daily basis.
The “Notional Principal Receivable Assets” and the “Notional Principal Payable Liability” shall be valued
respectively, and the total amount of gain or loss on valuation thereof shall be added to the Net Assets as the“Gain or Loss on Valuation of Futures Transactions etc.”
However, if the market value obtained at the time of valuation is based on the difference between thepresent value of the Receivable Swap Interest and the Payable Swap Interest, the amount obtained bydeducting the Recorded Accrued Interest Income on the Receivable Swap Interest and the Recorded Accrued
Interest Expenses on the Payable Swap Interest shall be used as the market value, and either the “The Notional
Principal Receivable Assets” or the “Notional Principal Payable Liability” shall be added to or deducted fromsuch market value.

For open type investment trusts, revaluation shall be made on the closing date.
The accounts for the “Notional Principal Receivable Assets” and “Notional Principal Payable Liability” shallbe revalued respectively, and the amount of gain on valuation shall be transferred to “Profit on Futures
Transactions” and the amount of loss on valuation shall be transferred to “Loss on Futures Transactions.”
2. Account Settlement Report(1) Preparation of Balance Sheets
The Corresponding Account of Notional Principal Receivable Assets is subtracted from the notional
principal received asset account, and the Notional Principal Payable Liability Account is subtracted fromthe Corresponding Account of Notional Principal Payable Liability, and the difference is added to the
Account Receivable if it is a positive number, or to the Accounts Payable if it is a negative number.
(2) Attached Documents
The detailed statement showing the contents of each contract for the balance of swap transactions at theend of the fiscal period is attached.

[Journal Entry Example]
Transaction[Interest Rate Swap]
1. Date of Conclusion ofTransaction

Account Journal

Description(Yen - Yen)
(1) Notional Principal Receivable Corresponding Account of
Assets
Notional Principal Receivable(2) Corresponding Account of
Assets
Notional Principal Payable
Notional Principal Payable
Liability
Liability* Recording of the notional principal amount to be used for the interest rate swap
(1) Notional Principal Amount for Receipt of Interest(2) Notional Principal Amount for Payment of Interest

2. During Interest-recording
Period(1) Accrued Interest Income(2) Interest Expense

Interest Income
Accrued Interest Expenses

(1)
(2)

Recording of Interest Income on swap transactions
Recording of interest expenses on swap transactions

3. Interest Settlement Date
(Interest Payment Date)(1) Call Loans(2) Accrued Interest Expenses

Accrued Interest Income
Call Loans

(1)
(2)

Receipt of interest rate swap fees
Payment of interest rate swap fees

4. Maturity Date

(1) Corresponding Account of
Notional Principal Receivable
Assets(2) Notional Principal Payable
Liability(3) Call Loans

Notional Principal Receivable
AssetsCorresponding Account of
Notional Principal Payable
Liability
Accrued Interest Income
Interest Income
Call Loans(1)

Transfer of notional principal for interest receivable

(2)
(3)

Transfer of notional principal for interest payable
Receipt of interest rate swap fees

(4)

Payment of interest rate swap fees

(5)

When any revaluation, etc. is implemented(4) Accrued Interest Expenses
Interest Expenses(5) Losses on Futures
Transactions, etc.
5. Interim Settlement(1) Contract Date

Gains on Futures Transactions,etc.

Corresponding Account of Notional Notional Principal Receivable
Principal Receivable Assets
AssetsCorresponding Account of
Notional Principal Payable
Notional Principal Payable
Liability
Liability
Accounts Receivable
Or Losses on Futures
Gains on Futures Transactions,
Transactions, etc.
etc.
Accounts PayableTransaction(2) Delivery Date

Account Journal

Call Loans
Or Accounts Payable
Call Loans
Accrued Interest Expenses
Interest Expenses

6. Valuation

Accounts Receivable
Call Loans
Accrued Interest Income
Interest Income
Call Loans

Gain or Loss on Valuation of Futures Transactions (off-bookaccount)

7. Revaluation of Accounts for Notional Principal Receivable
AssetsSettlement
Or Losses on Futures(Open Type)Transactions, etc.
Notional Principal Payable
Liability
Or Losses on Futures
Transactions, etc.

Description

Gains on Futures Transactions,etc.
Notional Principal Receivable
AssetsGains on Futures Transactions,etc.
Notional Principal Payable
Liability‐

The “Corresponding Account of Notional Principal Receivable Assets” and the“Account of the Notional Principal Payable Liability” shall be valued
respectively, and the total amount of the valuation gains or losses thereof shall be
added to the total amount of Net Assets as the “Gain or Loss on Valuation of
Futures Transactions etc.”
However, if the market value obtained at the time of valuation is based on
the difference between the present value of the Receivable Swap Interest and the
Payable Swap Interest, the amount obtained by deducting the Recorded Accrued
Interest Income on the Receivable Swap Interest and the Recorded Accrued
Interest Expenses on the Payable Swap Interest shall be used as the market value,and either the “The Notional Principal Receivable Assets” or the “Notional
Principal Payable Liability” shall be added to or deducted from such market
value.

[Currency Swap] Without Principal Exchange
Swap Interest: Receipt in Yen, Payment in Foreign Currency
Transaction

Japanese Yen Denominated Account Journals

Foreign Currency Denominated Account Journals

1. Date of Conclusion ofTransaction

2. During Interest-recording
Period3. Interest Settlement Date
(Interest Payment Date)

4. Maturity Date

5. Interim Settlement(1) Agreement(2) Delivery Date

Notional Principal Receivable
AssetsCorresponding Account of Notional Corresponding Account of Notional
Principal Receivable Assets
Principal Payable Liability

Notional Principal Payable Liability

Accrued Interest Income

Interest Income

Interest Expenses

Accrued interest expenses

Call Loans

Accrued Interest Income

Accrued interest expenses

Deposit

Notional Principal Payable Liability
Accrued interest expenses
Losses on Futures Transactions, etc.

Corresponding Account of Notional
Principal Payable Liability
DepositGains on Futures Transactions, etc.

Corresponding Account of Notional Notional Principal Receivable
Principal Receivable Assets
AssetsCall Loans
Accrued Interest Income
Losses on Futures Transactions, etc. Gains on Futures Transactions, etc.
Interest Income

Interest expenses

Corresponding Account of Notional Notional Principal Receivable Assets Notional Principal Payable Liability
Principal Receivable Assets
Gains on Futures Transactions, etc. Accounts Receivable
Accounts Receivable
Accounts Payable
Or Losses on Futures Transactions,
Or Losses on Futures Transactions,
etc.
etc.

Corresponding Account of Notional
Principal Payable Liability
Gains on Futures Transactions, etc.
Accounts Payable

Call Loans
Or Accounts Payable
Call Loans

Accounts Receivable
DepositDepositAccounts Receivable
Call Loans
Accrued Interest Income
Interest Income

DepositOr Accounts Payable
Accrued interest expenses
Interest Expenses

Transaction

Japanese Yen Denominated Account Journals

Gain or Loss on Valuation of Futures Transactions (off-book account)

Foreign Currency Denominated Account Journals

Gain or Loss on Valuation of Futures Transactions etc. (off-book account)

6. Valuation
Notional Principal Receivable
Gains on Futures Transactions, etc. Notional Principal Payable Liability
Gains on Futures Transactions, etc.
7. Revaluation on the Settlement Assets
Notional Principal Receivable
Or Losses on Futures Transactions, etc. Notional Principal Payable Liability(Open Type)Or Losses on Futures Transactions, Assets
etc.

[Currency Swap] In case of exchange of principle (exchange at the start and re-exchange at the end)
Swap Interest: Receipt in Yen, Payment in Foreign Currency
Transaction
1. Date of Conclusion ofTransaction

2. Principal Exchange Date
Payment in Yen, Receipt inForeign Currency

Japanese Yen Denominated Account Journals

Notional Principal Receivable
AssetsForeign Currency Denominated Account Journals

Corresponding Account of Notional Corresponding Account of Notional
Principal Receivable Assets
Principal Payable Liability

Notional Principal Payable Liability

Corresponding Account of Notional Call Loans
Principal Receivable Assets

DepositCorresponding Account of Notional
Principal Payable Liability

Call Loans
Call Loans

Notional Principal Payable Liability
Accrued interest expenses

DepositDeposit

3. Maturity Date
Payment in Foreign Currency Receipt in Yen
Notional Principal Receivable
Assets
Accrued Interest Income

4. Recording of Interest, Settlement of Interest, Interim Settlement, Valuation, Maturity Termination Date, etc. shall be handled in the same manner as when the principal is not exchanged.

[Currency swap] In case of exchange of principal (exchange at the start or at the end)
Swap Interest: Receipt in Yen, Payment in Foreign Currency
Transaction

Japanese Yen Denominated Account Journals

1. Date of Conclusion ofTransaction
Notional Principal Receivable
2. Principal Exchange Date
Assets(1) Payment in Yen - Receipt inForeign Currency(2) Payment in Foreign
Currency - Receipt in Yen

Foreign Currency Denominated Account Journals

Corresponding Account of Notional Corresponding Account of Notional
Principal Receivable Assets
Principal Payable Liability

Notional Principal Payable Liability

Foreign Investment Accounts

Call Loans
Deposit∴Equivalent to current remittanceprocessing.
The remittance rate shall be theexchange.

Foreign Currency Funds

Call Loans
Loss accountForeign Investment Accounts
Profit accountDeposit
Loss accountForeign Currency Funds
Profit account∴Equivalent to current collection treatment (Remittance rate shall be the exchange rate.)
3. Recording of Interest, Settlement of Interest, Interim Settlement, Valuation, Maturity Termination Date, etc. shall be handled in the same manner as when the principal is not exchanged.
Swap Interest.... Receipt in the currency in which the base value is displayed (hereinafter referred to as “the relevant currency”) and payment in a currency other than the currency in which the base value isdisplayed (hereinafter referred to as “foreign currency”)
Transaction
1. Date of Conclusion ofTransaction

Relevant Currency-denominated AccountNotional Principal Receivable
Assets

2. Principal Exchange Date
(1) Payment in Relevant
Foreign Investment Accounts
Currency- Receipt in Foreign Currency(2) Payment in foreign currency-Receipt in Relevant Currency

Deposit
Loss accountForeign Currency Denominated Account Journals

Corresponding Account of Notional Corresponding Account of Notional
Principal Receivable Assets
Principal Payable Liability

Notional Principal Payable Liability

DepositDeposit or Call Loan
∴ Equivalent to current remittanceprocessing.
(The remittance rate shall be theexchange rate.)

Foreign Currency Funds

Foreign Investment Accounts
Profit accountDeposit or Call Loan
Loss accountForeign Currency Funds
Profit account∴Equivalent to current collection treatment (Remittance rate shall be the exchange rate.)
3. Recording of Interest, Settlement of Interest, Interim Settlement, Valuation, Maturity Termination Date, etc. shall be handled in the same manner as when the principal is not exchanged.

[Credit Default Swap]
Transaction

Account Journal

1. Date of Conclusionof Contract

2006/7/10

Formula(Buyer)Corresponding Account of Notional
Principal Payable Liability
2,000,000,000

Notional Principal Payable
Liability
2,000,000,000(Seller)
Notional Principal Receivable
Assets2,000,000,000

2. Valuation

3. Commencement
Date of Transaction(Commencement
Date)(Delivery Date)

Corresponding Account of
Notional Principal Receivable
Assets2,000,000,000

Gain or Loss on Valuation of Futures Transactions (off-book account)Remarks* CDS Transaction on July 10 (Commencement Date: July 11)‐ Notional principal: 2,000,000,000 yen (term: 5 years)‐ Premium: 30 bps (4 times of interest payment per year)‐ Interest Calculation Section: ACT/360 (and ACT/365)‐ Collection rate at the time of credit event: 40%(in case of cash settlement)‐ Maturity Date 10 July, 2011
* The principal for receipt of interest shall be the Notional Principal
Receivable Assets and the principal for payment of interest shallbe the Notional Principal Payable Liability* In the event of an up-front payment, the amount received and paid
for price shall be added to or deducted from the book value, andthe amount received and paid for the accrued interest shall berecorded in the account for advances received and prepaid
expenses on the date of execution of each transaction contract.

(1) Valuation Gain or Loss (Seller)= Market value of assets received- Notional principal receivable assets(Book Value Received)(2) Valuation Gain or Loss (Buyer)= Notional Liability for Payment (Book
Value for Payment)- Market Value of Liabilities Payable* Market value may be provided for net worth including interest.
In such a case, only the amount equivalent to the principal shallbe valued at the market value obtained by deducting the amountequivalent to accrued interest from the market value.
(Preparation of Example where Market Value is Provided in
Amount Including Interest)* The amount equivalent to accrued interest shall not be includedin the market value, but only the amount equivalent to theprincipal shall be valued. Separately recorded as Accrued
Interest Income and Accrued Interest Expenses.

2006/7/11(Buyer)
Securities Received as Customers’
Deposits for Cash Collateral
Received
2,000,000,000

Cash Collateral Received
2,000,000,000(Seller)
Customers’ Margin Deposits
2,000,000,000* Acceptance or non-acceptance of collateral from Seller shall be
determined by agreement.

Securities received as customers’
deposits for customers’ margin:
2,000,000,000* Government bonds are deposited as customer margin.
* Necessity, unnecessity and frequency of mark-to-market
revaluation shall be determined by agreement.
* Interest is paid to the trust property from the other party.

4. Recording ofinterest

From 2006/7/11(Buyer)Interest Expenses

Accrued interest expenses
16,666

16,666(Seller)
Accrued Interest Income* The time and period for recording shall be in accordance withthe agreement, etc.

Interest Income
16,666

5. Interest Payment
Date(Interest Receipt andPayment Date)
If the encashment ison the Interest
Payment Date:(1) Unit price for accrued interest andaccrued interest expenses= Premium (%) ÷ 360(Rounded down to seven decimal places)= 0.3 ÷ 360 ≒ 0.0008333(2) Accrued Interest Expenses Per Day= Accrued interest expenses unit price x
Corresponding account of notional principal
payable liability ÷ 100= 0.0008333 x 2,000,000,000 ÷ 100=16,666

16,666(3) Accrued Interest Income Per Day= Accrued interest income unit price x
Corresponding Account of Notional
Principal Receivable Assets ÷ 100

2006/10/11(Buyer)(Recorded) Accrued Interest
Expenses
1,516,606
Interest Expenses
16,726

Money Trust
1,533,332(Seller)Money Trust
1,533,332(Recorded) Accrued Interest
Income1,516,606
Interest Income
16,726(1) Ratio of elapsed days (assuming fixed* In principle, the number of days elapsed shall be calculated on one
interest rate)end from the previous interest payment date to the current= Premium (%) ÷ Number of times ofinterest payment date, and whether the calculation is based on thepayment of interest
actual number of days or on 30 days depends on the “calculation(Rounded down to seven decimal places)
category” of each transaction (specified in the instructions at the= 0.3 x 92 days (elapsed days) ÷ 360 days
time of execution).
≒ 0.0766666* “Number of days per year” for calculating the ratio of elapsed(2) Interest Expenses
days of interest shall be in accordance with “calculation= Ratio of elapsed days x Corresponding
category” (specified in the instructions at the time of execution)account of notional principal payable liability
for 365 days, 360 days, etc.
÷ 100
= 0.0766666 x 2,000,000,000 ÷ 100= 1,533,332(3) Adjusted Amount = 1,533,332 - 16,666 x
91 days = 16,726(4) Interest Income= Ratio of elapsed days x Corresponding
account of notional principal receivable
assets ÷ 100

6. Partial Cancellation(Contract Date)
When the amount ofassets and liabilities
before cancellation is
the same(No settlement ofaccounts during theperiod)2006/11/8(Buyer)(Withdrawal upon cancellation)
Notional Principal Payable
Liability
1,000,000,000

Corresponding Account of
Notional Principal Payable
Liability
1,000,000,000

Accounts Receivable
5,000,000

Gains on Futures Transactions, etc.
5,000,000

Corresponding Account of
Notional Principal Receivable
Assets1,000,000,000(Withdrawal upon cancellation)
Notional Principal Receivable
Assets1,000,000,000(Seller)

Losses on Futures Transactions,etc.
5,000,000

Accounts Payable
5,000,000(1) (Withdrawal upon cancellation) Notional
Principal Payable Liability = Notional
Principal Payable Liability Before
Cancellation x Notional Principal
Equivalent to Payment Liability on
Cancellation (Principal Portion) ÷Corresponding Account of Notional
Principal Payable Liability Before
Cancellation= 2,000,000,000 x 1,000,000,000 ÷
2,000,000,000 = 1,000,000,000(Realized in one formula. Amounts less thanYen to be rounded down (The same shallapply to the notional principle receivable
assets))(2) Gains on Futures Transactions= Net Amount Received + Amount ofInterest Expenses(3) (Withdrawal upon cancellation) The
Notional Principal Receivable Assets =The Notional Principal Receivable Assets
before cancellation x Notional Principal
equivalent to Receivable Assets on
Cancellation (principal portion) ÷ The
Corresponding Account of Notional
Principal Receivable Assets before
cancellation(4) Losses on Futures Transactions, etc.
= Amount of Net Payment + Amount ofInterest Income* Status at the time of cancellation‐ Cancellation of the amount equivalent to 1,000,000,000 yen
out of the notional principal of 2,000,000,000 yen.
‐ The cancellation amount is the amount equivalent to theprincipal and the Seller’s net payment amount is 4,750,000
yen‐ The receivable amount equivalent to accrued interest is
250,000 yen (date of delivery: November 10).
* Accrued interest income and expenses shall be recorded in thebalance of the principal before cancellation until the day before
the delivery date of partial cancellation.

7. Partial Cancellation(Delivery Date)
When the amount ofassets and liabilities
before cancellation is
the same(No settlement ofaccounts during theperiod)2006/11/10(Buyer)Principal Equivalent
Money Trust

Accounts Receivable
5,000,000

5,000,000

The amount equivalent to accrued interest (interest expenses)(Withdrawal) Accrued Interest
Expenses
241,657(Adjusted) Interest expenses
8,343

Money Trust

Cash Collateral Received
1,000,000,000

Securities Received as Customers’
Deposits for Cash Collateral
Received
1,000,000,000

250,000(1) Accrued Interest Expenses Paid
Money Trust = Accrued Interest Expenses
Paid
Withdrawn Accrued Interest Expenses =Recorded Accrued Interest Expenses
Adjusted Interest Expenses = Accrued
Interest Expenses Paid
- Withdrawn Accrued Interest Expenses* The method of receiving and paying the equivalent amount to
accrued interest shall be in principle the same as the current
bond method (partial sale).
* Accrued interest income and expenses on the principal balance
after cancellation is recorded as usual.
* The principal amount and interest rate related accounts journals
are shown separately, but in fact they are settled for funds
collectively.

* Return of government bonds as received cash collateral.

(Seller)
Principal Equivalent
Accounts Payable

Money Trust
5,000,000

5,000,000

The amount equivalent to accrued interest (interest expenses)
Money Trust
250,000

Securities Received as Customers’
Deposits for Customers’ Margin
1,000,000,000(Withdrawn) Accrued interest
income241,657(Adjusted) Interest income
8,343

Customers’ Margin Deposits
1,000,000,000(2) Accrued interest income received
Money Trust = Accrued Interest Income
Received
Withdrawn Accrued Interest Income =Recorded Accrued Interest Income
Adjusted Interest Income = Accrued
Interest Income Received- Withdrawn Accrued Interest Income* Return of government bonds as customers’ margin deposits.

8. Occurrence ofCredit Event(Settlement in Kind)
Settlement with
Deliverable Liabilityof Reference
Company
No Settlement of
Accounts for the
Period(same amount ofprincipal)

2007/1/9(Buyer)Notional Principal Payable
Liability
2,000,000,000

Corresponding Account of
Notional Principal Payable
Liability
2,000,000,000

Money Trust (Accounts
Receivable)
2,000,000,000
Loss on Securities Transactions
1,800,000,000

General Bonds

Cash Collateral Received

Securities Received as Customers’
Deposits for Cash Collateral
Received
2,000,000,000

2,000,000,000

1,900,000,000
Gains on Futures Transactions, etc.
1,900,000,000

Equivalent to Accrued Interest (Interest Expenses) 90 days
(Withdrawal) Accrued Interest
Expenses
1,483,274(Adjusted) Interest expenses
16,726

Money Trust
1,500,000(Seller)
Corresponding Account of
Notional Principal Receivable
Assets2,000,000,000

Notional Principal Receivable
Assets2,000,000,000

General Bonds

Money Trust (Accounts Payable)
2,000,000,000

100,000,000
Losses on Futures Transactions,etc.
1,900,000,000
Securities Received as Customers’
Deposits for Customers’ Margin
2,000,000,000

Customers’ Margin Deposits
2,000,000,000

Accrued Interest (Interest Received) 90 days
Money Trust
1,500,000(Withdrawn) Accrued interest
income1,483,274(Adjusted) Interest income
16,726(1) Loss on securities transactions(1,800,000,000)= book value (1,900,000,000)- Actual market price (100,000,000)(2) Accrued Interest Expenses paid
Money Trust = Accrued Interest Expenses
Paid
Withdrawn Accrued Interest Expenses =Recorded Accrued Interest Expenses
Adjusted Interest Expenses = Accrued
Interest Expenses Paid
- Withdrawn Accrued Interest Expenses(3) Accrued interest income received
Money Trust = Accrued Interest Income
Received
Withdrawn Accrued Interest Income = Recorded
Accrued Interest Income
Adjusted Interest Income = Accrued Interest
Income Received- Withdrawn Accrued Interest Income* At the time of a credit event (CE), a journal entry for thereversal of general bonds will be made.
* When the principal amount of assets and liabilities is not thesame amount as a result of revaluation of settlement ofaccounts, “Profit and Loss on Futures Transactions, etc.” will
be incurred.
* Loss on securities transactions at reasonable prices such as bookvalue and market price.
* If physical delivery is not possible at the time of CE, it isrecorded as receivable. Journal entries for Money
Trust/Account receivable and received cash collateral shall bemade on the date of delivery.

* When the principal amount of assets and liabilities is not thesame amount as a result of revaluation of settlement ofaccounts, “Profit and Loss on Futures Transactions, etc.” will
be incurred.
* Make journal entries for the recording of general bonds at thetime of CE.
* The book value of general bonds is calculated based onreasonable prices such as actual market prices. Start mark-tomarket valuation from the date of recording.
* If physical delivery is not possible at the time of CE, it isrecorded as account payable. Journal entries for Accounts
Payable / Money Trust and Customers’ Margin shall be madeon the date of delivery.

9. Occurrence ofCredit Event(Cash Settlement)Collection rate: 40%
No Settlement of
Accounts for the
Period(same amount ofprincipal)

2007/1/9(Buyer)Notional Principal Payable
Liability
2,000,000,000

Corresponding Account of
Notional Principal Payable
Liability
2,000,000,000

Cash Collateral Received
2,000,000,000

Securities Received as Customers’
Deposits for Cash Collateral
Received
2,000,000,000

Money Trust (accounts receivable)
1,200,000,000

Gains on Futures Transactions, etc.
1,200,000,000(1) Gains on Futures Transactions, etc.
= (1 - collection rate) x Notional Principal
Payable Liability (principal portion)

Equivalent to Accrued Interest (Interest Expenses) 90 days
(Withdrawal) Accrued Interest
Expenses
1,483,274(Adjusted) Interest expenses
16,726

Money Trust
1,500,000(Seller)
Corresponding Account of
Notional Principal Receivable
Assets2,000,000,000

Notional Principal Receivable
Assets2,000,000,000

Securities Received as Customers’
Deposits for Customers’ Margin
2,000,000,000

Customers’ Margin Deposits

Losses on Futures Transactions,etc.
1,200,000,000

Money Trust (Accounts Payable)
1,200,000,000

2,000,000,000

Equivalent amount to accrued interest (Interest income)Money Trust
1,500,000(2) Accrued Interest Expenses paid
Money Trust = Accrued Interest Expenses
Paid
Withdrawn Accrued Interest Expenses =Recorded Accrued Interest Expenses
Adjusted Interest Expenses = Accrued
Interest Expenses Paid
- Withdrawn Accrued Interest Expenses(Withdrawn) Accrued interest
income1,483,274(Adjusted) Interest income
16,726(3) Losses on Futures Transactions, etc.
= (1 - collection rate) x Notional Principal
Receivable Assets (principal portion)(4) Accrued interest income received
Money Trust = Accrued Interest Income
Received
Withdrawn Accrued Interest Income = Recorded
Accrued Interest Income
Adjusted Interest Income = Accrued Interest
Income Received- Withdrawn Accrued Interest Income

10. In the event thatthe principal of thepayable liabilities(receivable assets) at
the maturity date is thesame amount:

2011/7/9(Buyer)Notional Principal Payable
Liability
2,000,000,000

Corresponding Account of
Notional Principal Payable
Liability
2,000,000,000

Cash Collateral Received
2,000,000,000

Securities Received as Customers’
Deposits for Cash Collateral
Received
2,000,000,000

Corresponding Account of
Notional Principal Receivable
Assets2,000,000,000

Notional Principal Receivable
Assets2,000,000,000

Securities Received as Customers’
Deposits for Customers’ Margin
2,000,000,000

Customers’ Margin Deposits* When the principal amount of assets and liabilities is not thesame amount as a result of revaluation of settlement ofaccounts, “Profit and Loss on Futures Transactions, etc.” will
be incurred.
* Interest receipt and payment processing is the same as interest
payment date processing.

(Seller)

11. Revaluation of
Accounts for
Settlement
No partial cancellation
during the period

2,000,000,000

2006/12/10(Buyer)(Transfer) Notional Principal
Payable Liability
10,000,000

Gains on Futures Transactions, etc.
10,000,000(1) (Transfer) Notional Principal Payable
Liability= Market Value (- for Buyer’s receipt, + for
Payment) Amount - Accrued interest= -9,000,000 -1,000,000 =-10,000,000yen* In case of 0 or positive values: Loss on
Futures Transactions (absolute value)* If negative: Gain on Futures Transaction(absolute value)(Seller)
Losses on Futures Transactions,
etc.
10,000,000(Transfer) Notional Principal
Receivable Assets
10,000,000(2) (Transfer) Notional Principal Receivable
Assets= Market Value (+ for Seller’s receipt, - forPayment) Amount - Accrued interest= -9,000,000 -1,000,000 =-10,000,000yen* In case of 0 or positive value, Gain on
Futures Transaction (absolute value)* If negative, Loss on Futures Transactions(absolute value)* Status at the time of settlement of accounts‐ The balance on the previous day was 2,000,000,000 yen forboth receipt and payment, and there was no change in theprincipal amount.
‐ Market value on the day of closing date = Seller’s net
payment amount is 9,000,000 yen‐ Amount equivalent to accrued interest = 1 million yen to bereceived* Notional Principal Payable Liability after Revaluation (Book
Value)= Notional Principal Payable Liability before revaluation+ (Transfer) Notional Principal Payable Liability* Notional principal receivable assets after revaluation (bookvalue)= Notional Principal Receivable Assets before revaluation+ (Transfer) Notional Principal Receivable Assets* The equivalent amount to accrued interest income is recorded by
dividing Recorded Accrued Interest Income by
Accrued Interest Income Per Day = 0.0008333 x 2,000,000,000 ÷100= 16,666 Adjusted Amount = 1,000,000 - 16,666 x 60 days = 40
accrued but the adjusted accrued interest income and expenses arenote recorded.

12. Partial
Cancellation after
Settlement(Revaluation)
When the principal of
assets and liabilities
before cancellation is
not the same amount2007/1/15(Buyer)(Withdrawal upon cancellation)
Notional Principal Payable
Liability
995,000,000
Losses on Futures Transactions,etc.
5,000,000

Corresponding Account of
Notional Principal Payable
Liability
1,000,000,000

Losses on Futures Transactions,
etc.
10,000,000

Accounts Payable
10,000,000(Seller)
Corresponding Account of
Notional Principal Receivable
Assets1,000,000,000

Notional Principal Receivable
Assets995,000,000
Gains on Futures Transactions, etc.
5,000,000

Accounts Receivable

Gains on Futures Transactions, etc.
10,000,000

10,000,000(1) (Withdrawal upon cancellation) Notional
Principal Payable Liability = Notional
Principal Payable Liability Before
Cancellation x Notional Principal
Equivalent to Payment Liability on
Cancellation (Principal Portion) ÷Corresponding Account of Notional
Principal Payable Liability Before
Cancellation = 1,990,000,000 x
1,000,000,000 ÷ 2,000,000,000 =995,000,000(Realized in one formula. Amounts lessthan 1 Yen to be rounded down (same as
for Notional Principal Receivable
Assets))(2) Profit and Loss on Futures Transactions,etc.
= Market Value (+ For Buyer Payment, For Receipt) Amount - Accrued Interest= 10,050,000 - 50,000 = 10,000,000* In case of 0 or positive values: Loss on
Futures Transactions (absolute value)* If negative: Gain on Futures Transaction(absolute value)(3) (Withdrawal upon cancellation) The
Notional Principal Receivable Assets =The Notional Principal Receivable Assets
before cancellation x Notional Principal
equivalent to Receivable Assets on
Cancellation (principal portion) ÷ The
Corresponding Account of Notional
Principal Receivable Assets before
cancellation(4) Profit and Loss on Futures Transactions,etc.
= Market Value (+ for Seller’s receipt, - forPayment) Amount - Accrued interest= 10,050,000 - 50,000 = 10,000,000* In case of 0 or positive value, Gain on
Futures Transaction (absolute value)* If negative, Loss on Futures Transactions(absolute value)* Status at the time of cancellation (the first partial cancellation
after the revaluation of settlement of accounts in 11 above)‐ Cancellation of 1,000,000,000 yen out of the notional
principal of 2,000,000,000 yen‐ The cancellation amount is the amount equivalent to theprincipal and the Seller’s receiving net amount is 10,050,000
yen‐ The amount equivalent to accrued interest income is 50,000
yen (Delivery date: January 17).

* Accrued interest income and expenses shall be recorded in thebalance of the principal before cancellation until the day before
the delivery date of partial cancellation.
* Handling of partial cancellation delivery date is the same as 7.
(The same shall apply to the handling of the customers’ margin
or the cash collateral received.)* Treatment of accrued interest is the same as 6.

25. Accounting for Forward Rate Agreement (FRA)
Category
I. Account titles for Forward Rate Agreements

Accounting Method
1.
2.

II. Accounts

III. Forward Rate Purchase
Forward Rate Sale
IV. Valuation
V. Settlement of Accounts

1.

1.
2.
1.
2.
1.

No new account titles prescribed in the ministry orders shall be created.
The Notional Principal Amount relating to the forward rate contract shall be recorded in the accounts of “Notional Principal Receivable
Assets / Corresponding Account of Notional Principal Receivable Assets” and “Notional Principal Payable Liability/Corresponding
Account of Notional Principal Payable Liability.”(1) To be recorded on the date of conclusion of the contract.
(2) Forward Rate Agreements shall, in principle, be evaluated at the market value.
(3) For open type investment trusts, revaluation shall be made at the closing date.
Account Titles for Forward Rate Agreement
Asset Account....
Notional Principal Receivable Assets.... Principal on forward rate purchase
Corresponding Account of Notional Principal Payable Liability.... Corresponding Account of principal on forward rate
sale
Liability Account....
Corresponding Account of Notional Principal Receivable Assets... Corresponding Account of principal on forward rate
purchase
Notional Principal Payable Liability.... Corresponding Account of commensurate principal on forward rate purchase
Loss Account......Interest Expenses.................. Interest paid on forward rate transactions
Gain Account......Interest Income.................. Interest received on forward interest transactions(1) Amount for account receivable and payable in settlement... Accrued Revenue, Accounts Payable(2) Valuation Gain and Loss.... Gain or Loss on Valuation of Futures Transactions etc.
Interest on forward rate purchase shall not be recorded as interest income on a daily basis.
Interest on forward rate sale shall not be recorded as interest income on a daily basis.
Valuation shall in principle be conducted on a daily basis.
The “Notional Principal Receivable Assets” and the “Notional Principal Payable Liability” shall be valued respectively, and the gain orloss on valuation thereof shall be added to the total amount of net assets as the “Gain or Loss on Valuation of Futures Transactions etc.”
In the case of an open type investment trust, revaluation shall be made on the closing date.
The accounts for “Notional Principal Receivable Assets” and “Notional Principal Payable Liability” shall be revalued respectively, and thegain
on valuation
shall be transferred
to “Gain on Transaction of Futures Transactions” and the loss on valuation shall be transferred to(1)
Preparationof Balance
SheetsThe Corresponding Account of Notional Principal Receivable Assets is subtracted from the notional principal receivable asset
account, and the Notional Principal Payable Liability Account is subtracted from the Corresponding Account of Notional Principal
Payable Liability, and the difference is added to the accounts receivable if it is a positive number, or to the accounts payable if it is anegative number.
(2) Attached Documents
A detailed statement showing the contents of each contract for the balance of forward rate agreements at the end of the fiscal period is
attached.

[Journal Entry Example]
Transaction

Account Journal[Forward Rate Agreements]
1. Date of Conclusion of Transaction (1) Notional Principal Receivable[Purchase]
Assets[Sale]

2. Interest Determination Date
[Purchase]

Corresponding Account of
Notional Principal Receivable
Assets(1) Corresponding Account of
Notional Principal Payable
Notional Principal Payable Liability Liability(1) Corresponding Account of
Notional Principal Receivable
Notional Principal Receivable
AssetsAssetsInterest Income(2) Account Receivable
Accounts Payable
Interest Expenses
Gains on Futures Transactions, etc.
(3) Losses on Futures Transactions,etc.

Description(1) Nominal principal amount to be used for calculation of settlement amount(1) Transfer of Nominal Principal Amount(2) When the settlement amount is receiving:
When the settlement amount is payment:(3) When any revaluation, etc. is implemented[Sale]

3. Transaction Termination Date
(Settlement Date)[Purchase]/[Sale]

4. Valuation

5. Revaluation of Accounts for
Settlement(Open Type)[Purchase][Sale](1) Notional Principal Payable
Corresponding Account of Notional
Liability
Principal Payable Liability(2) Account Receivable
Interest Income
Interest Expenses
Accounts Payable(3) Losses on Futures Transactions, Gains on Futures Transactions, etc.
etc.
(1) Call Loans
Accounts Receivable
Accounts Payable
Call Loans
Gain or Loss on Valuation of Futures Transactions (off-bookaccount)(1) Notional Principal Receivable Gains on Futures Transactions, etc.
Assets
Notional Principal Receivable(2) Losses on Futures Transactions, Assets
etc.
(1) Notional Principal Payable
Gains on Futures Transactions, etc.
Liability
Notional Principal Payable Liability(2) Losses on Futures Transactions,
etc.

(1) Receiving of settlement amountPayment of Settlement Amount- The position of Notional Principal Receivable Assets or Notional Principal Payable
Liability shall be valued, and the total amount of valuation gain or loss shall be
added to the total amount of net assets as Valuation Gain or Loss on Futures
Transactions.

(1) In case of valuation gain:(2) In case of valuation loss:

26. Accounting for Forward Exchange Agreement (FXA)
Category

Accounting Method

I. Account Titles for Forward Exchange Agreement 1.
2.
II. Accounts

III. Forward Exchange Purchase
Forward Exchange Sale
IV. Valuation
V. Settlement of Accounts

1.

1.
2.
1.
2.
1.

2.

No new account titles prescribed in the ministry orders shall be created.
The notional amount of the principal relating to the forward exchange agreement shall be recorded in the accounts of “Notional Principal
Receivable Assets and Corresponding Account of Notional Principal Receivable Assets” and “Notional Principal Payable Liability andCorresponding Account of Notional Principal Payable Liability.”(1) To be recorded on the date of conclusion of the contract.
(2) Forward exchange agreements shall, in principle, be market value.
(3) For open type investment trusts, revaluation shall be made at the closing date.
Accounts for Forward Exchange Agreements
Asset Account....
Notional Principal Receivable Assets.... Principal on forward exchange purchase
Corresponding Account of Notional Principal Payable Liability... Corresponding Account of Principal on forward
exchange sale
Liability Account...
Corresponding Account of Notional Principal Receivable Assets.... Corresponding Account of Principal on forward
exchange purchase
Notional Principal Payable Liability... Principal on forward exchange sale
Loss Account......Interest Expenses................ The amount of interest paid on forward exchange transactions
Profit Account......Interest Income.................. The amount of interest received on forward exchange transactions(1) Amount of receivable and payable in settlement... Accounts Receivable, Accounts Payable(2) Valuation Gain and Loss.... Gain or Loss on Valuation of Futures Transactions etc.
Interest on forward exchange purchase shall not be recorded as interest income on a daily basis.
Interest on forward exchange sale shall not be recorded as interest income on a daily basis.
Valuation shall in principle be conducted on a daily basis.
The “Notional Principal Receivable Assets” and the “Notional Principal Payable Liability” shall be valued respectively, and the gain orloss on valuation thereof shall be added to the total amount of net assets as the “Gain or Loss on Valuation of Futures Transactions etc.”
In the case of an open type investment trust, revaluation shall be made on the closing date.
The accounts for “Notional Principal Receivable Assets” and “Notional Principal Payable Liability” shall be revalued respectively, and thegain on valuation shall be transferred to “Gain on Transaction of Futures Transactions” and the loss on valuation shall be transferred to“Loss on Transaction of Futures Transactions.”
Account Settlement Report(1) Preparation of Balance Sheets
The Corresponding Account of Notional Principal Receivable Assets is subtracted from the notional principal receivable asset
account, and the Notional Principal Payable Liability Account is subtracted from the Corresponding Account of Notional Principal
Payable Liability, and the difference is added to the accounts receivable if it is a positive number, or to the accounts payable if it is anegative number.
(2) Attached Documents
The detailed statement showing the contents of each contract for the balance of forward exchange transactions at the end of thecalculation period shall be attached.

[Journal Entry Example]
Transaction

Account Journal[Forward exchange agreement]
1. Date of Conclusion of Transaction (1) Notional Principal Receivable[Purchase]
Assets[Sale]
2. Interest Determination Date
[Purchase]

Description

Corresponding Account of Notional
Principal Receivable Assets(1) Nominal principal amount to be used for calculation of settlement amount(1) Corresponding Account of
Notional Principal Payable Liability
Notional Principal Payable Liability(1) Corresponding Account of
Notional Principal Receivable
Notional Principal Receivable
AssetsAssetsInterest Income(2) Account Receivable
Accounts Payable
Interest Expenses
Gains on Futures Transactions, etc.
(3) Losses on Futures Transactions,etc.

(1) Transfer of Nominal Principal Amount(2) When the settlement amount is receiving:
When the settlement amount is payment:(3) When any revaluation, etc. is implemented[Sale]

3. Transaction Termination Date
(Settlement Date)[Purchase]/[Sale](1) Notional Principal Payable
Corresponding Account of Notional
Liability
Principal Payable Liability(2) Account Receivable
Interest Income
Interest Expenses
Accounts Payable(3) Losses on Futures Transactions, Gains on Futures Transactions, etc.
etc.
(1) Call Loans
Accounts Payable

Accounts Receivable
Call Loans

4. Valuation
Gain or Loss on Valuation of Futures Transactions (off-book account)
5. Revaluation of Accounts for
Settlement(Open Type)[Purchase][Sale](1) Notional Principal Receivable Gains on Futures Transactions, etc.
Assets
Notional Principal Receivable(2) Losses on Futures Transactions, Assets
etc.
(1) Notional Principal Payable
Gains on Futures Transactions, etc.
Liability
Notional Principal Payable Liability(2) Losses on Futures Transactions,
etc.

(1) Receiving of settlement amountPayment of Settlement Amount- Value the position of the Notional Principal Receivable Assets or the Notional
Principal Payable Liability and add the total amount of the valuation gains orlosses to the total amount of net assets as the Valuation Gain or Loss on Exchange.
(1) In case of valuation gain:(2) In case of valuation loss:

27. Accounting for a Non-Deliverable Forward (NDF)
Summary- Settlement and transaction on balance shall be made through over-the-counter trading.
Account titles for a Non-Deliverable Forward
The notional amount of the principal for a non-deliverable forward shall be included in the accounts of “Notional Principal
Receivable Assets / Corresponding Account of Notional Principal Receivable Assets” and “Notional Principal Payable Liability/ Corresponding Account of Notional Principal Payable Liability.”(1) Recorded on the date of conclusion of the contract(2) In principle, valued at market value(3) For open type investment trusts, revaluation shall be made at the closing date.
Others- Recorded in the currency of settlement.
- Contract for difference- Valuation of individual balance at market value[Journal Entry Example]
Transaction

Account Journal

1. Date of Conclusion of Transaction[Purchase](1) Notional Principal Receivable
Assets[Sale](1) Corresponding Account of
Notional Principal Payable Liability
2. Valuation

3. Closing Date
[Purchase][Sale]

Corresponding Account of
Notional Principal Receivable
AssetsDescription(1) Nominal principal amount to be used for calculation of settlement amount

Notional Principal Payable
Liability(2) Gain or Loss on Valuation of Futures Transactions etc. (off-bookaccount)- Value the position of “Notional Principal Receivable Assets” or “Notional
Principal Payable Liability,” and add the total amount of the valuation gain orloss to the total amount of net assets as Gain or Loss on Valuation of Futures
Transactions etc.
(3) Corresponding Account of
Notional Principal Receivable(3) Transfer of Nominal Principal Amount
Notional Principal Receivable Assets Assets(4) When the settlement amount is profit:(4) Account Receivable
Gains on Futures Transactions, etc.
When the settlement amount is loss:(4) Losses on Futures Transactions, Accounts Payableetc.
(5) When any revaluation, etc. is implemented
Gains on Futures Transactions, etc.
(5) Losses on Futures Transactions,etc.
(3) Notional Principal Payable
Liability(4) Account Receivable(4) Losses on Futures Transactions,etc.

Corresponding Account of
Notional Principal Payable
Liability
Gains on Futures Transactions, etc.
Accounts Payable(5) Losses on Futures Transactions,etc.

Gains on Futures Transactions, etc.

4. Closing Date
[Purchase]/[Sale](6) Call Loan (if settlement is in yen) or
Deposit (if settlement is in foreign
currency)(6) Accounts Payable
Revaluation of Accounts for
Settlement (Open Type)[Purchase][Sale](7) Notional Principal Receivable
Assets(8) Losses on Futures Transactions,etc.
(7) Notional Principal Payable
Liability(8) Losses on Futures Transactions,etc.

Accounts Receivable
Call Loan (if settlement in yen) or Deposit(if settlement in foreign currency)(7) In case of valuation gain:
Gains on Futures Transactions, etc. (8) In case of valuation loss:
Notional Principal Receivable
AssetsGains on Futures Transactions, etc.
Notional Principal Payable
Liability28. Accounting for Mortgage Securities

Category

Account Journal

Description

1. Purchase Contract Date

* Mortgage Securities...... New Accounts
Mortgage Securities

×××

Accounts Payable

×××

Accounts Payable

×××

Call Loans

×××

2. Purchase Delivery Date

- Interest income for mortgage securities transactions shall be recorded on a perdiem basis.
- Compensation for early cancellation will be charged at around 1.2%.
*Other expenses...... Early cancellation compensation fee (commission)

3. Recording of Accrued Interest
IncomeAccrued Interest Income

×××

Interest Income

×××

Call Loans×××

Accrued Interest Income
Interest Income

×××
×××

Accounts Receivable
Other Expenses

×××
×××

Mortgage Securities

×××
×××

Call Loans

×××

Mortgage Securities
Accrued Interest Income
Interest Income

×××
×××
×××

Call Loans

×××

Mortgage Securities
Accrued Interest Income
Interest Income

×××
×××
×××

4. Interest Deposit Date

5. Early Cancellation Date

6. Delivery Date for Early
Cancellation

7. Maturity Date

29. Accounting for Investment Trust Beneficiary Certificates and Investment Securities
Category

1. Purchase Contract Date

Account Journal

Investment Trust Beneficiary
Certificates

×××

2. Purchase Delivery Date

Accounts Payable

×××

3. Ex-dividend Date

Description

Accounts Payable
×××

Call Loans×××

Accrued Dividends Receivable ×××

Dividend income

×××

4. Dividend Deposit Date

Call Loans

Accrued Dividends Receivable ×××

5. Sale Contract Date

Accounts Receivable
×××
Loss on Securities Transactions ×××

Investment Trust Beneficiary
Certificates

×××

6. Sale Delivery Date

Call Loans

Accounts Receivable

×××

7. Reimbursement Date

Accounts Receivable
×××
Loss on Securities Transactions
×××

Investment Trust Beneficiary
Certificates
Gain on Securities Transactions

×××
×××

Call Loans

Accounts Receivable

×××

×××

×××

8. Reimbursement Delivery Date

9. Valuation

10. Revaluation of Accounts for
Settlement(Open Type)

Loss or Gain on Valuation of
Securities
×××
Investment trust beneficiary
certificates (valuation gain)
Loss on securities transactions(valuation loss)

×××

Gains on securities
transactions (valuation gain)
Investment trust beneficiary
certificates (valuation loss)- In the case of investment securities, investment securities shall be deemed to
be investment trust beneficiary certificates.

30. Accounting, etc., for Foreign Income Tax Deductions for Investment Trusts(1) At the time of settlement of accounts at the end of the period, investment trusts that have paid foreign
income taxes abroad during the calculation period shall calculate information on any deduction forforeign income taxes necessary for the withholding agent, etc. to properly calculate taxes in thefollowing manner, whether through private placement, public offering, stock investment trusts, bondinvestment trusts (excluding baby bond investment trusts in the form of family funds, MMFs and funds
for a comprehensive securities account):(a) Accounting on the closing date(i)

Ratio of assets denominated in foreign currencies
The amount obtained by dividing the amount of net assets denominated in foreign currencies atthe end of the period by the total amount of net assets of trust property at the end of the period.
The upper limit shall be 1 and the integer value shall have a maximum of 1 digit and after thedecimal point shall be up to 4 digits and the remainder shall be rounded down. The lower limit
shall be 0.

(ii) Foreign Income Tax per 1 yen of revenue
The amount obtained by dividing the amount of dividends from profit (excluding the dividends
from the account for revenue adjustment, hereinafter the same shall apply) by the amountavailable for dividends from profit at the end of calculating period (excluding the dividends
from the account for revenue adjustment, hereinafter the same shall apply), multiplying theamount of foreign income tax during the period, and dividing this amount by the dividends fromprofit. The upper limit shall be 1 and the integer value shall have a maximum of 1 digit and after
the decimal point shall be up to 10 digits and the remainder shall be rounded down. The lower
limit shall be 0.
However, when the ratio of assets denominated in foreign currencies is 0, the amount of foreign
income tax per 1 yen of revenue shall also be 0.
(iii) Domestic Income Tax per 1 yen of revenue
The amount obtained by dividing the amount of domestic income taxes at the end of the periodby the amount available for dividends from profit at the end of the period. The integer values
shall be up to 1 digit, 10 digits to the right of the decimal point, and remainder shall be rounded
down.
(b) Special Treatment for Baby Fund of Family Fund(i)

Amount of net assets denominated in foreign currencies at the end of the period
The amount of net assets of foreign currency-denominated assets in a baby fund of a family fundat the end of the period shall be the sum of the amount of net assets of foreign
currency-denominated assets at the end of the period directly invested by such baby fund and theamount of net assets of foreign currency-denominated assets at the end of the period (the amountobtained by multiplying the amount of net assets of foreign currency-denominated assets heldby the mother fund at the end of the period, in which such baby fund invest, by the number
obtained by dividing the number of units of beneficial interest of the mother fund held by suchbaby fund at the end of the period by the total number of units of beneficial interest of themother fund at the end of the period) indirectly invested by such baby fund through each motherfund.
(ii) Amount of foreign income taxes during the period
The amount of foreign income taxes during the period on a baby fund of a family fund shall beobtained by adding the total amount of foreign income taxes calculated at the end of each monthfor each mother fund in which such baby fund invests, using the method in accordance with the
Attached Form 1 (2), Statement of Dividend Income for Mother Fund, prescribed in the Article
11 of the By-law of the rules on Valuation and Accounting of Investment Trust Properties, to theamount of foreign income taxes directly paid by such child fund during the period.

(2) With respect to the information for deduction of foreign income tax calculated under (1) above, thecommunication shall be as follows:(a) Unlisted Investment Trust
The data calculated in accordance with (1) shall be communicated to the sales company together
with other closing data on the closing date.
(b) Listed Investment Trust
The data calculated in accordance with (1) shall be converted into a csv file and communicated tothe sales company along with other closing data on the closing date. In this case, the starting date
for payment of dividends shall be the day after the expiration of 15 business days from the closing
date.

(3) The csv file pertaining to the listed investment trust calculated under (2) (b) above and transmitted tothe sales company shall be posted on its website at the closing date.

31. Accounting for Pre-tender Transactions (Pre-issuance Date Transactions) of Government Bonds[Transaction Terms]
Issue

Tender Announcement
Issue Date

200X, March 28
April 20

Date of Tender
Redemption Period

Japanese Government Bonds with Interest Rateof 10 Years Issued in April 200X
April 5
201X, April 20

Date of Original Purchase Contract
Face Value of Transaction
Yield on purchases of Pre-tender Transactions

200X, March 28
10,000,000 yen
0.89% (Same Purchase Price @ 100.095)

Delivery Date (= Issue Date)
Provisional Coupon
Pre-Tender Transaction Closing
Quotation

200X, April 20
0.9% (with previous bond coupon)
0.85% (Unit Price @ 100.478)

Pre-Tender Transaction Closing Quotation on the End of Fiscal Period(March 31)

0.85% (Unit Price @ 100.478)

Date of Sale Agreement
Face Value of Transaction
Yield on Sales of Pre-Tender Transactions

200X, March 28
10,000,000 yen
0.89% (Same Sales Price @ 100.67)

Delivery Date (= Issue Date)
Provisional Coupon

200X, April 20
0.9% (with previous bond coupon)

Conditions for Determination of Date of Tender

Issue: YYY Issue Bond Coupon: 0.8%

* The contract method for pre-tender transaction is not based on the unit price but the semi-annual compounded yield and the spread α against the base interest rate.
For this purpose, the purchase and sale unit price and the valuation unit price on the materials are calculated in accordance with the formula shown in the (Appendix).

(1) Handling of Purchase Agreement
Transaction
1. Purchase Contract Date

Account Journal
March 28
National Government Bond
Accounts Payable
Certificates
10,009,500
10,009,500

2. Valuation

4. Tender Date

March 31
National Government Bond
Certificates
38,300April 5
Accounts Payable
10,009,500

Gain on Securities
Transactions
38,300National Government Bond
Certificates
10,047,800

Loss on Securities
Transactions
38,300National Government Bond
Certificates
9,914,000
5. Delivery Date

April 20
Accounts Payable

Accounts Payable
9,914,000

Call Loans
9,914,000

1. Purchase unit price is calculated using provisional coupon of 0.9% and purchase yieldof 0.89%.
Shall be dealt with in the same manner as ordinary interest-bearing debt acquisitions.
(Appendix) Calculation formula -> = 100.095(Contract Price) 10,000,000 x 100.095/100 = 10,009,500
2. Valuation shall in principle be made on a daily basis.
The valuation unit price was calculated using provisional coupons of 0.9% and theclosing quotation of 0.85% on the same day.
(Appendix) Calculation formula -> = 100.478(Valuation loss or gain) 10,000,000 x 100.478/100 - 10,009,500 = 38,300

Loss or Gain on Valuation of
Securities
38,3003. Revaluation of Accounts for
Settlement

Description

9,914,000

3. Valuation unit price is calculated using provisional coupon of 0.9% and the closing
quotation of 0.85%.
(Appendix) Calculation formula -> = 100.478(Valuation loss or gain) 10,000,000 x 100.478/100 - 10,009,500 = 38,300
4. On the date of tender, the pre-tender transaction position on the initial purchase
contract date (March 28) is offset by the initial purchase price.
The purchase unit price is calculated from the coupon of 0.8% announced on the dateof the tender and the initial yield on purchase of 0.89% and recorded again.
(Appendix) Calculation formula -> = 99.14(Contract Price) 10,000,000 x 99.14/100 = 9,914,000

(2) Handling of Sales Agreement
Transaction
1. Purchase Contract Date

Account Journal
March 28
National Government Bond
Accounts Payable
Certificates
10,009,500
10,009,500

2. Valuation

3. Revaluation of Accounts for
Settlement

4. Sale Agreement Date

April 2
Accounts Receivable
10,067,000

5. Tender Date

April 5
Accounts Payable

6. Delivery Date

Gain on Securities
Transactions
38,300National Government Bond
Certificates
10,047,800
Gain on Securities
Transactions
19,200Accounts Payable

10,009,500
Accounts Receivable
9,971,000
Loss on Securities
Transactions
500
April 20
Accounts Payable

9,914,000
Accounts Receivable
10,067,000

Call Loans, etc.
9,914,000

Call Loans, etc.
9,971,000

1. Purchase unit price is calculated using provisional coupon of 0.9% and purchase yieldof 0.89%.
Shall be dealt with in the same manner as ordinary interest-bearing debt acquisitions.
(Appendix) Calculation formula -> = 100.095(Contract price)10,000,000 × 100.095/100 = 10,009,500
2. Valuation shall in principle be made on a daily basis.
The valuation unit price was calculated using provisional coupons of 0.9% and theclosing quotation of 0.85% on the same day.
(Appendix) Calculation formula -> = 100.478(Valuation Gain or Loss)10,000,000 × 100.478/100 - 10,009,500 = 38,300

Loss or Gain on Valuation of
Securities
38,300March 31
National Government Bond
Certificates
38,300Description

9,914,000
Accounts Receivable
9,971,000

3. Valuation unit price is calculated using provisional coupon of 0.9% and the closing
quotation of 0.85%.
(Appendix) Calculation formula -> = 100.478(Valuation Gain or Loss)10,000,000 × 100.478/100 - 10,009,500 = 38,300
4. Unit selling price is calculated using provisional coupon of 0.9% and yield on sales of
0.83%.
Shall be treated in the same manner as an ordinary sale of interest-bearing
government securities.
(Appendix) Calculation formula -> = 100.670(Contract price)10,000,000 × 100.670/100 = 10,67,000(Trading profit or loss) 10,067,000 - 10,047,800 (after revaluation) = 19,200
5. Based on the coupon of 0.8% announced on the date of the tender, the unit
purchasing price shall be calculated from the initial yield on purchases of 0.89%, andthe unit selling price shall be calculated from the yield on sales of 0.83% for revision.
[Purchase](Appendix) Calculation formula -> = 99.14(Contract price)10,000,000 × 99.14/100 = 9,914,000[Sale](Appendix) Calculation formula -> = 99.71(Contract price)10,000,000 × 99.71/100 = 9,971,000
Based on such revised unit prices (Purchase Unit Price 99.14, Sale Unit Price 99.71),
the trading profit or loss recorded on the sale contract date shall be revised.

(3) Handling When the Suspension of Tendering and Issuance is Announced by the Date of Tender
Transaction
1. Purchase Contract Date

Account Journal
March 28
National Government Bond
Accounts Payable
Certificates
10,009,500
10,009,500

2. Valuation

3. Revaluation of Accounts for
Settlement

4. Announcement Date ofSuspension of Issuance

1. Purchase unit price is calculated using provisional coupon of 0.9% and purchase yieldof 0.89%.
Shall be dealt with in the same manner as ordinary interest-bearing debt acquisitions.
(Appendix) Calculation formula -> = 100.095(Contract price)10,000,000 × 100.095/100 = 10,009,500
2. Valuation shall in principle be made on a daily basis.
The valuation unit price was calculated using provisional coupons of 0.9% and theclosing quotation of 0.85% on the same day.
(Appendix) Calculation formula -> = 100.478(Valuation Gain or Loss)10,000,000 × 100.478/100 - 10,009,500 = 38,300

Loss or Gain on Valuation of
Securities
38,300March 31
National Government Bond
Certificates
38,300Description

Gain on Securities
Transactions
38,3003. Valuation unit price is calculated using provisional coupon of 0.9% and the closing
quotation of 0.85%.
(Appendix) Calculation formula -> = 100.478(Valuation Gain or Loss)10,000,000 × 100.478/100 - 10,009,500 = 38,300
4. Cancellation of pre-tender transaction position and revaluation.

April 2
Loss on Securities
Transactions
38,300Accounts Payable
10,009,500

National Government Bond
Certificates
38,300National Government Bond
Certificates
10,009,500

(Appendix)(1) Interest-Bearing Government Bonds

P: Price

C: Base rate of the previous bond (% per annum)

A: Unissued period (days)

r: compounded yield (%)

N: Number of times of payment of interest

F: 182.5 - A(Published by JSDA)(1) In the course of calculation, rounded off to the nearest 10 decimal places.
(2) P is rounded down to the nearest three decimal places.

(2) Floating Rate Government Bonds

P: Price

K: 10-year government bond base rate (%)αf: α (%) decided on tender

αt: α (%) agreed in WI transactions

A: Unissued period

N: Number of times of payment of interest

F: 182.5 - A(1) In the course of calculation, rounded off to the nearest ten decimal places.
(2) P shall be rounded down to the nearest three decimal places.
However, when αf = αt, P = 100.

32. Accounting for Inflation-Indexed Bonds
Category
1. Interlock Factor

Accounting Method“Applicable index as of month ‘m’ and day ‘n’ ÷ the applicable index as of the date of issue” (rounded off to the three decimal places)* Applicable index is the national consumer price index (general index excluding fresh food; Hereinafter referred to as “CPI”) shall be used.
(1) Applicable index for month ‘m’ day ‘n’ (if n = 10) = (m - 3) month CPI(2) Applicable index for month ‘m’ day ‘n’ (if n <10)=(m - 4) Month CPI +The number of days from Month (m 1) on the 11th to Month m Day n
Number of Days in Month (m - 1)

x {(m - 3) Month CPI - (m - 4) Month CPI}

(3) Applicable index for month ‘m’ day ‘n’ (if n> 10)=(m - 3) Month CPI +Number of Days in (n - 10)
Number of Days in month ‘m’

x {(m - 2) Month CPI - (m - 3) Month CPI}

(Example) In the case of June, the CPI for March shall be the applicable index for June 10.
2. Notional Principal

Face Value at Issue x Interlock Factor

3. Accrued Interest Income

Accrued Interest Income @ = (Coupon rate ÷ 365) x Notional principal on the date of recording of interest* To clear off and re-enter on a day-to-day basis (Amount of accrued interest income up to the previous day shall be canceled, and the amount of accrued interest
income from the next day of the previous interest payment or the date of delivery to the day shall be recorded).

4. Redemption Amount

Notional Principal at Redemption Date

5. Appraised Value

Notional Principal on Valuation Date x Valuation Unit Price (without considering interlock factor)

6. Face Value Unification

When the face value is unified on the interest payment date, the weighted average purchase interlock factor and the unit book value are calculated using thefollowing formula:
Weighted average purchase interlock factor = Total notional principal amount at the time of purchase ÷ Total face value
Unit Book Value = Total Book Value ÷ Total Notional Principal Amount at the Time of Purchase[Journal Entry Example]
Transaction
1. Purchase Agreement

Account Journal
September 1 (Contract Date)
National Government Bond
Certificates
99,407,330
September 6 (delivery date)
Accounts Payable
99,407,330
Prepaid Expenses
290,183

2. Recording of Accrued
Interest Income

September 7
Accrued Interest Income
3,297
September 8
Accrued Interest Income-3,297(09/07)
Accrued Interest Income
6,594(09/07 to 09/08)

Description

Accounts Payable
99,407,330
Call Loans
99,697,513- Contract date: September 1
Delivery Date: September 6- Face value 100,000,000
Contract unit price 99.110- Interest rate 1.2%
Interest Payment Date 06/10, 12/10 twice ayear- Redemption Date 06/10/2013 (Issue Date 06/10/2003)- Applicable Index 98.1129 (09/06) 97.80 (06/10) - - - Issue Index[Interlock Factor]98.1129 ÷ 97.8 = 1.003[Notional Principal]100,000,000 × 1.003 = 100,300,000[Contract Amount]100,300,000 × 99.11/100 = 99,407,330[Accrued Interest]100,300,000 × 1.2 × 88/365 = 290,183

Interest Income
3,297Interest Income-3,297
Interest Income
6,594- Applicable index 98.1097(09/07) 98.1065 (09/08)[Interlock Factor]98.1097 ÷ 97.8 = 1.003[Notional Principal]100,000,000 × 1.003 = 100,300,000[Accrued Interest Income @](1.2 ÷ 365) × 100,300,000 = 3,297[Interlock Factor]98.1065 ÷ 97.8 = 1.003[Notional Principal]100,000,000 × 1.003 = 100,300,000[Accrued Interest Income @](1.2 ÷ 365) × 100,300,000 = 3,297

Transaction
3. Upon Redemption

Account Journal
June 10 (2013)
Call Loans
100,400,000

4. Valuation
September 1

Loss or Gain on Valuation of
Securities
10,030
September 2
Loss or Gain on Valuation of
Securities-20,060

National Government Bond
Certificates
99,407,330
Gain on Securities
Transactions
992,670

Description- Applicable Index 98.20 (06/10/2013)[Interlock Factor]98.2 ÷ 97.8 = 1.004[Notional Principal]100,000,000 × 1.004 = 100,400,000- Valuation unit price to be valued (without considering interlock factor)99.120(09/01) 99.09 (09/02)- Applicable index 98.1290(09/01) 98.1258 (09/02)[Interlock Factor]98.1290 ÷ 97.8 = 1.003[Notional Principal]100,000,000 × 1.003 = 100,300,000[Appraised Value]100,300,000 × 99.12/100 = 99,417,360[Valuation gain or loss]99,417,360 - 99,407,330 = 10,030[Interlock Factor]98.1258 ÷ 97.8 = 1.003[Notional Principal]100,000,000 × 1.003 = 100,300,000[Appraised Value]100,300,000 × 99.09/100 = 99,387,270[Valuation gain or loss]99,387,270 - 99,407,330 = -20,060

33. Accounting for Establishment of Exchange Traded Funds When There Is Debt Guarantee by the Japan
Securities Clearing Corporation(In-Kind Type)‐The Day of Establishment
Stock certificatesPrincipal

Accounts Receivable(Loss on Additional Subscriptions)‐(Gain on Additional Subscriptions)

The Day the Establishment Amount is Deposited
Money Trust

Accounts Receivable(Money Trust Type)‐‐The Day of Establishment
Accounts Receivable

Principal(Loss on Additional Subscriptions)(Gain on Additional Subscriptions)

The Day the Establishment Amount is Deposited
Money Trust

Accounts ReceivableSupplementary ProvisionThis Sub-Committee resolution shall come into effect on April 1, 2004.

Supplementary ProvisionThis amendment shall come into effect on July 16, 2004.

Supplementary ProvisionThis amendment shall come into effect on November 19, 2004.

Supplementary ProvisionThis amendment shall come into effect on March 18, 2005.

Supplementary ProvisionThis amendment shall come into effect on November 18, 2005.

Supplementary ProvisionThis amendment shall take effect on May 31, 2006 and shall apply to share splits with a record dateon or after that date.

Supplementary ProvisionThis amendment shall come into effect on May 24, 2006.

Supplementary ProvisionThis amendment shall come into effect on June 19, 2006.

Supplementary ProvisionThis amendment shall come into effect on November 1, 2006.

Supplementary ProvisionThis amendment shall come into effect on October 12, 2006.

Supplementary Provisions
This amendment shall be implemented from the newly recorded accrued dividend receivable from
July 1, 2007.
Accrued dividends already recorded on the effective date shall be applied from those renewed on
and after the effective date.

Supplementary ProvisionThis amendment shall come into effect on January 19, 2007.

Supplementary ProvisionThis amendment shall come into effect on March 9, 2007.

Supplementary ProvisionThis amendment shall come into effect on June 14, 2007.

Supplementary ProvisionThis amendment shall come into effect on September 30, 2007.

Supplementary ProvisionThis amendment shall come into effect on October 1, 2008.

Supplementary ProvisionThis amendment shall come into effect on March 19, 2009.

Supplementary ProvisionThis amendment shall come into effect on January 21, 2010.

Supplementary ProvisionThis amendment shall come into effect on April 14, 2011.

Supplementary ProvisionThis amendment shall come into effect on January 1, 2020 and shall apply to investment trusts
from which beneficiaries receive dividends on or after such date.
* Deleted items 5 30 (1) - (2) and newly added items (1) - (3).

Supplementary ProvisionThis amendment shall come into effect on April 5, 2021.
* Amended items 3 and 4.

Supplementary ProvisionThis amendment shall come into effect on January 1, 2021.
* Newly added 5 33.