50. Valuation of Securities and Commodities for Trading in Japan 有価証券と短期売買商品の評価

有価証券と短期売買商品の評価について英語でまとめました。
The table below provides an overview of valuation of securities and commodities for trading at fiscal year-end and at the time of transfer for Japanese corporate tax purposes.

See this post for more about Japanese tax and accounting.

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Japanese Corporate Tax Law provides for the valuation of securities and commodities for trading as shown in the table below. 

		Commodities for trading	Securities
Definition		1.  Certain assets (excluding securities) acquired to get gains utilizing their short-term price fluctuations 2.  Cryptocurrencies	1. Securities under Financial Instruments and Exchange Act 2. Equivalents to 1 (excluding treasury stock or those related to derivative transactions)
Historical cost		1.  Purchased Purchase price + Costs for purchase 2.  Exchanged or gifted Value generally required to acquire the commodities at the time of acquisition	1. Purchased (excluding those related to margin trading or derivative transactions) Purchase price + Costs for purchase 2. Acquired in exchange for cash or contribution in kind (excluding 4) Sum of cash and contributed assets 3. (Shares) acquired with no consideration (excluding 4) Zero 4. Acquired at price lower than market value (excluding those acquired as shareholders) Value generally required to acquire the securities at the time of acquisition  5. Exchanged or gifted Value generally required to acquire the securities at the time of acquisition
Fiscal year end	Valuation	Revalue commodities at market value for each type.	1. Trading securities Revalue at market value for each class 2. Other securities Revalue at book value at fiscal year end
	Valuation gain or loss	1.  Fiscal year end: Include valuation gain/loss in taxable income/deductible expenses 2.  Following fiscal year: Reverse treatment 1 to value the asset at historical cost
Transfer	Book value determination	Moving average method or weighted average method
	Selection of method	A method for each type/classification
	Reporting of method	Notify the selected method(s) in writing to the tax office by the filing due date of the final tax return for the fiscal year in which the commodities/securities are acquired.
	Mandatory selection	If no method is selected or the selected method is not used, the moving average method is applied.
	Change of method	1.  File a change application before beginning of the fiscal year of change with the tax office.  2.  Approval is deemed granted at end of the fiscal year of application if no decision is notified by that date.
	Capital gain or loss	Treat capital gain/loss as follows for the fiscal year in which the contract date of transfer falls: 1. Include capital gain (A–B) in taxable income 2. Include capital loss (B–A) in deductible expenses A. Consideration that should generally be paid B. Book value	Treat capital gain/loss as follows for the fiscal year in which the contract date of transfer falls: 1. Include capital gain (A–B) in taxable income 2. Include capital loss (B–A) in deductible expenses A. Consideration that should generally be paid (excluding deemed dividends) B. Book value

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