ASBJ 27
Revised 2026
Accounting Standard for Current Income Taxes
Accounting Standard for Current Income Taxes (Revised 2026) is part of the Japan GAAP framework.
Revised Standard (2026)
ASBJ Statement No. 27 (Revised 2026) accommodates the Special Corporate Tax for Defense and tax effect adjustments. The base standard continues to provide the core historical framework.
1
Conceptual Framework Linkage
Refining the layered tax framework for a new tax measure
This revision to ASBJ Statement No. 27 (see the companion poster for the BASE standard's layered corporation/inhabitant/enterprise tax framework) was PROPOSED via exposure draft on January 9, 2026 – the SAME general period Japan's "SPECIAL CORPORATE TAX FOR DEFENSE" (see the companion Practical Solution poster) was being INTRODUCED, suggesting the revision LIKELY addresses HOW this NEW tax measure fits WITHIN the existing current income tax accounting FRAMEWORK.
2
Scope of the Proposed Revision
All companies subject to Japan's evolving corporate tax system
The PROPOSED revision applies to companies SUBJECT to Japan's current INCOME tax framework, LIKELY clarifying how the RECENTLY introduced special corporate tax for defense should be CLASSIFIED and RECOGNISED alongside the EXISTING layered corporation/inhabitant/enterprise tax structure.
3
Likely Driver – Accommodating the New Special Corporate Tax for Defense
A plausible connection between two concurrent 2026 developments
GIVEN the CLOSE timing between this exposure draft (January 2026) and the SEPARATE Practical Solution addressing the new special corporate tax for DEFENSE (issued as a TENTATIVE measure in February 2026 – see the companion poster), it is PLAUSIBLE that this revision to the CURRENT Income Taxes standard is intended to provide MORE PERMANENT, Statement-level treatment for the new defense tax – EVENTUALLY superseding or FORMALISING the tentative Practical Solution guidance issued SEPARATELY. This CONNECTION reflects the SURROUNDING timing and context RATHER than confirmed text of the FINAL revised standard.
4
The Continuing Income-Based/Size-Based Enterprise Tax Distinction
A framework this revision would most likely preserve, not replace
The EXISTING distinction between the INCOME-based portion of enterprise tax (treated as current TAX expense) and the SIZE-based "pro forma standard" portion (treated as an OPERATING expense – see the companion ASBJ Statement No. 27 poster) is a WELL-ESTABLISHED, foundational J-GAAP classification PRINCIPLE. A TARGETED revision addressing a NEW tax measure would MOST LIKELY preserve this EXISTING framework, applying its SAME underlying logic (is the new tax genuinely INCOME-based, or based on SOME other factor?) to the new defense tax MEASURE, RATHER than overhauling the framework itself.
5
Coordination With the Tax Effect Accounting Amendments
Likely paired with corresponding deferred tax guidance
CONSISTENT with the GENERAL ASBJ pattern of COORDINATING current tax (No. 27) and DEFERRED tax (No. 28) guidance TOGETHER (as seen with the October 2025 interim reporting package's No. 40 amendment – see the companion poster), this January 2026 Current Income Taxes exposure draft LIKELY has a CORRESPONDING companion amendment addressing any DEFERRED tax consequences the new defense tax measure MIGHT create.
6
Worked Example – Classifying the New Defense Tax Within Current Tax Expense
Applying the existing income-based classification logic to a new tax
Example: A company subject to the new defense tax
A company determines its special corporate tax for defense liability is calculated based on its TAXABLE income, similarly to ordinary corporation tax.
CONSISTENT with the EXISTING income-based classification LOGIC (Section 4), the company would LIKELY classify this NEW tax as CURRENT TAX EXPENSE, presented ALONGSIDE corporation tax, inhabitant tax, and the income-based portion of enterprise tax – EXTENDING the EXISTING framework to the NEW tax measure, RATHER than requiring an ENTIRELY new classification approach.
7
Disclosure Requirements
What the proposed amendments would likely require
Current tax expense recognised, including the classification of the new defense tax measure Basis for classifying the new tax as current tax expense (versus an operating expense, if applicable)
8
Critical Judgments & Estimates
Where judgement matters most
SIGNIFICANT JUDGEMENTS
Correctly classifying the new defense tax measure as income-based versus another basis, consistent with existing enterprise tax classification logic
SIGNIFICANT ESTIMATES
Estimated liability under the newly introduced, still-evolving tax measure
9
Relationship to IAS/IFRS and US GAAP
A continuing, genuinely Japan-specific tax structure
AS with the BASE standard, NEITHER IAS 12 nor ASC 740 has an EQUIVALENT concept to Japan's LAYERED national/local tax system or its SPECIFIC classification questions – this revision, LIKE its predecessor, addresses a GENUINELY Japan-SPECIFIC tax policy development RATHER than a divergence from a SPECIFIC IFRS/US GAAP treatment of the SAME transaction type.
10
Statement Mapping
Where every current tax event lands
Event Statement(s) affected Notes
Special corporate tax for defense (if income-based)BS P&LLikely classified as current tax expense
11
Related Standards
Cross-reference map
Standard Connection
ASBJ Statement No. 27 (original)The base standard this revision amends
Practical Solution on Special Corporate Tax for DefenseThe tentative interim guidance this revision may eventually formalise
ASBJ Statement No. 28Tax Effect Accounting – likely coordinated for any deferred tax consequences of the new measure
12
Quick-Reference Glossary
Special corporate tax for defense
A newly introduced Japanese corporate tax measure connected to increased national defense spending, addressed on a tentative basis by a separate Practical Solution and likely formalised through this Statement revision.
Financial statement key (Japan GAAP terminology)
BS Balance Sheet (貸借対照表)
P&L Statement of Income / Profit and Loss Statement (損益計算書)
Net Assets 純資産の部
SCNA Statement of Changes in Net Assets (株主資本等変動計算書)
SCF Statement of Cash Flows (キャッシュ・フロー計算書)