①The provisions of Article 54 of the New Act apply to the amount of the reserve for overseas market development by small and medium sized enterprises, etc. accumulated in business years of a corporation ending on or after the Effective Date, and with regard to the amount of the reserve for overseas market development by small and medium sized enterprises, etc. accumulated in business years of a corporation that ended before the Effective Date, the provisions then in force continue to govern. In this case, with regard to the application of the provisions of that Article for a business year of a corporation prescribed in paragraph (1) of that Article that began before the Effective Date and ends on or after the Effective Date, the phrase "amount calculated by dividing" in that paragraph is deemed to be replaced with "amount calculated by dividing (for a business year that began before the Effective Date of the 1985 Amendment Act and ends on or after that date, the amount obtained by adding, to the total of the amount equivalent to 5.6/1,000 (or 12.2/1,000 for a corporation whose amount of capital or amount of contributions is 100 million yen or less at the end of that business year, or a corporation that has no capital or contributions (referred to as a "small or medium-sized corporation" in this paragraph)) of the amount calculated by multiplying the revenue pertaining to the transactions listed in item (i) of the following paragraph by the number of months in the period from the first day of that business year to March 31, 1985 (referred to as the "designated period for the former reserve rate" in this paragraph) and dividing the product by the number of months in that base year and the amount equivalent to 4.2/1,000 (or 10.4/1,000 for a small or medium-sized corporation) of the amount calculated by multiplying the revenue pertaining to those transactions by the number of months obtained by deducting the number of months in the designated period for the former reserve rate from the number of months in that business year and dividing the product by the number of months in that base year, the total of the amount equivalent to 7.7/1,000 (or 16.6/1,000 for a small or medium-sized corporation) of the amount calculated by multiplying the revenue pertaining to the transactions listed in items (ii) through (viii) of the following paragraph by the number of months in the designated period for the former reserve rate and dividing the product by the number of months in that base year and the amount equivalent to 5.8/1,000 (or 14.1/1,000 for a small or medium-sized corporation) of the amount calculated by multiplying the revenue pertaining to those transactions by the number of months obtained by deducting the number of months in the designated period for the former reserve rate from the number of months in that business year and dividing the product by the number of months in that base year)".

②If a corporation prescribed in Article 56-10, paragraph (1) of the Former Act holds, in the first business year beginning on or after the Effective Date (excluding the case where that business year is a business year that includes the day of dissolution (excluding dissolution due to a merger); hereinafter referred to as the "business year of the amendment" through paragraph (7)), the amount of the reserve for losses on share trading prescribed in paragraph (2) of that Article as of the end of the business year immediately preceding the business year of the amendment (meaning the amount obtained by deducting the amount included in gross profit pursuant to the provisions of that paragraph or paragraph (3) of that Article in that immediately preceding business year and adding the amount included in deductible expenses pursuant to the provisions of paragraph (1) of that Article in that immediately preceding business year), an amount equivalent to the amount calculated, for each business year from the business year of the amendment to the business year that includes the day before the day on which 10 years have elapsed from the first day of the business year of the amendment, by multiplying that amount of the reserve for losses on share trading by the number of months in each such business year and dividing the product by 120 (or, if that amount exceeds the remaining balance of the reserve for losses on share trading as of the end of each such business year (meaning the amount obtained by deducting, from that amount of the reserve for losses on share trading, the amount that has been, or is to be, included in gross profit pursuant to the provisions of the following paragraph by that day, or the amount included in gross profit pursuant to the provisions of this paragraph in business years that ended before that day; the same applies hereinafter through paragraph (7)), that remaining balance of the reserve for losses on share trading), out of that amount of the reserve for losses on share trading, is included in gross profit in calculating the amount of income for each such business year.

③If a corporation that receives the application of the provisions of the preceding paragraph comes to fall under any of the cases listed in the following items, an amount equivalent to the amount specified in the respective items is included in gross profit in calculating the amount of income for the business year that includes the day on which it comes to fall under that case:

④With regard to the remaining balance of the reserve for losses on share trading in the case where a corporation that receives the application of the provisions of paragraph (2) has had its approval for filing blue returns revoked or has submitted a written notification to the effect that it will discontinue filing returns by blue return, the provisions of Article 56-10, paragraph (5) of the Former Act are to govern. In this case, the phrase "accumulates the reserve for losses on share trading referred to in paragraph (1)" in that paragraph is deemed to be replaced with "has the remaining balance of the reserve for losses on share trading prescribed in Article 17, paragraph (2) of the Supplementary Provisions of the 1985 Amendment Act (referred to as the "remaining balance of the reserve for losses on share trading" in this paragraph)", the phrase "the amount of the reserve for losses on share trading as of" is deemed to be replaced with "the remaining balance of the reserve for losses on share trading as of", the phrase "that amount of the reserve for losses on share trading" is deemed to be replaced with "that remaining balance of the reserve for losses on share trading", and the phrase "the preceding three paragraphs and paragraph (7)" is deemed to be replaced with "Article 17, paragraphs (2), (3) and (6) of the Supplementary Provisions of the 1985 Amendment Act".

⑤The number of months referred to in paragraph (2) is calculated in accordance with the calendar, and any fraction of less than one month is counted as one month.

⑥The treatment of the remaining balance of the reserve for losses on share trading in the case where a corporation prescribed in paragraph (2) carries out a merger in any business year on or after the business year of the amendment, and other necessary matters concerning the application of the provisions of that paragraph and paragraph (3), are specified by Cabinet Order.

⑦The provisions of Article 53, paragraph (1) of the New Act do not apply to shares that a corporation prescribed in paragraph (2) holds at the end of each business year on or after the business year of the amendment (limited to business years in which it has the remaining balance of the reserve for losses on share trading).

⑧With regard to the calculation of the amount of income for business years up to and including the business year that includes March 16, 1986 of a corporation that holds the reserve for exhibiting at the International Science and Technology Exposition prescribed in Article 56-11, paragraph (1) of the Former Act, the provisions of that Article remain in force. In this case, the phrase "a corporation" in paragraph (4) of that Article is deemed to be replaced with "a corporation, by the end of the business year that includes March 16, 1985,".