REGULATIONS CONCERNING TERMINOLOGY, FORMS AND METHODS OF PREPARATION OF FINANCIAL STATEMENTS, ETC. Copyright Roderick Seeman

ARTICLE 8-6. NOTATIONS CONCERNING LEASE TRANSACTIONS

Concerning finance/lease transactions (meaning, from among lease transactions, those where it is not possible, as per the terms of the lease contract, to cancel the lease during the term of the lease contract, or those corresponding to that, and the borrower of the object which is used based on the said lease contract (hereinafter the "lease object") can actually receive economic benefit from the said lease object, actually incurs expenses arising out the usage of the said lease object.Hereinafter the same) where accounting dispositions were not made based on the method related to ordinary purchase/sale transactions, where falling under the classifications listed in the items hereunder, the matter must be noted as per the said item.

i. Where the company is the borrower of the lease object.

a. The acquisition amount of the lease object at the end of the said business year, the amount corresponding to accumulated depreciation and the nondepreciated balance (divided into categories corresponding to the items to be entered in balance sheets) and the balance remaining on unexpired portion of the lease (divided into the amount related to the lease period within the year and any other amount)

b. The lease payments made during the said business year, the amount of depreciation and the amount of interest payments.

c. The method of calculation of the amount of depreciation and the amount of interest payments.

ii. Where the said company is the lender of the lease object.

a. The acquisition amount of the lease object at the end of the said business year, the amount corresponding to accumulated depreciation and the nondepreciated balance (divided into categories corresponding to the items to be entered in balance sheets) and the balance remaining on unexpired portion of the lease (divided into the amount related to the lease period within the year and any other amount)

b. The lease payments received during the said business year, the amount of depreciation and the amount of interest received.

c. The method of calculation of the amound of interest.

2. In those situations of Section 1 of the previous Paragraph, when at the end of the said business year the total of the remaining lease fee balance is only a low percentage of the total of the remaining lease fee balance related to finance/lease transactions and the balance of tangible fixed assets (in those situations where assets other than tangible fixed assets are the object of lease finance transactions, including the term end of balance figure for the accounting items for such assets. In the next paragraph the same) it is possible to calculate the acquisition cost amount and the remaining unexpired lease fees balance by using the method that does not deduct rational estimates of the amount of interest included in the total lease fee amount agreed at the outset of the lease transaction and the amount of the balance of the remaining lease fees at the end of the said business year (meaning the interest inclusive method).

3. Regardless of the provisions of the previous paragraph, where the accounting itmes of the asset which is the object of the finance/lease transaction lack significance in view of the substance of the said company's busiiness, when at the end of the said business year the total of the remaining lease fee balance is only a low percentage of the total of the remaining lease fee balance and the balance of tangible fixed assets, it is possible to calculate the acquisition cost amount and the remaining unexpired lease fees balance related to the said items using the interest inclusive methods.

4. In those situations where a company, other than a company which treats lease transactions as ordinary sections, making the notations of Paragraph 1, Item 2, where the total of the remaining lease fee balance and the estimated remaining value postlease is only a low percertage of the total of that total plus the outstanding balance of credits (claims against others), it is possible to calculate the remaining unexpired lease fees balance, using a method that does not deduct interest from the balance of the remaining unexpired lease fees balance and estimated remaining balance postlease (meaning interest received inclusive method).

5. The remaining unexpired lease fees balance as of the end of the said business year for operating lease transactions (meaning lease transactions other than finance/lease transactions) must be noted in categories for those with lease periods less than a year and all others. However, for those operating lease transactions where it is possible to cancel the lease during the term of the lease, this does not apply.

6. In those situations where the said company is the borrower of the lease object, concerning lease transaction lacking major relevance in view of the substance of the said company's business and the monetary amount for each of the lease contracts is minimal, and the term of the lease is less than one year, the notations of Paragraph 1 and the previous Paragraph are not necessary.