Supplementary Provisions, Article 10Transitional Measures regarding Method of Valuation of Inventory Assets

①The provisions of Article 99, paragraph (1), item (ii) (Method of Valuation of Inventory Assets) of the New Order apply to income tax for 2008 and subsequent years, and the provisions then in force continue to govern income tax for 2007 and earlier years.

②In the case where an individual who has selected the lower of cost or market method prescribed in Article 99, paragraph (1), item (ii) (Method of Valuation of Inventory Assets) of the Former Order for inventory assets held on December 31, 2007 holds, on December 31, 2008 (if that individual dies or has an Absence From Japan in the middle of the year, at the time of the death or Absence From Japan; the same applies hereinafter in this paragraph), inventory assets belonging to the same type of business and category of assets as the type of business and category of assets for which that selection was made (meaning the type of business and category of assets prescribed in Article 100, paragraph (1) (Selection of Method of Valuation of Inventory Assets) of the New Order; the same applies hereinafter in this paragraph), and that individual has not selected the cost method prescribed in Article 99, paragraph (1), item (i) of the New Order for those inventory assets (limited to those for which the price ordinarily required for their acquisition on December 31, 2008 (hereinafter in this paragraph referred to as the "replacement cost") is less than the value assessed by the cost method prescribed in item (ii) of that paragraph), the individual may apply that Article treating that replacement cost as the value on December 31 of that year prescribed in item (ii) of that paragraph.