①If a corporation prescribed in Article 53, paragraph (1) of the New Act holds a reserve amount deferred from inclusion in gross profit in the first business year commencing 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); referred to as the "business year of the amendment" hereinafter up to the following paragraph), with regard to the application of the provisions of Article 53, paragraph (3) of the Former Act to that reserve amount deferred from inclusion in gross profit, notwithstanding the provisions of that paragraph, in each business year from the business year of the amendment to the business year that includes the day preceding the day on which two years have elapsed from the first day of the business year of the amendment, the amount equivalent to the amount calculated by multiplying that reserve amount deferred from inclusion in gross profit by the number of months in that business year and dividing the result by 24 (or, if that amount exceeds the remaining reserve amount deferred from inclusion in gross profit (meaning the amount obtained by deducting, from the reserve amount deferred from inclusion in gross profit, the amount that has been included or is to be included in gross profit by that day pursuant to the provisions of paragraph (3), or the amount included in gross profit pursuant to the provisions of this paragraph in a business year that ended before that day; the same applies hereinafter in this paragraph and paragraph (3)) as of the end of that business year, that remaining reserve amount deferred from inclusion in gross profit) is included in gross profit in calculating the amount of income for that business year.

②The reserve amount deferred from inclusion in gross profit prescribed in the preceding paragraph means, out of the amount of the reserve for price fluctuations under Article 53, paragraph (1) of the Former Act held as of the end of the business year immediately preceding the business year of the amendment, the amount calculated as specified by Cabinet Order as the amount relating to securities prescribed in item (i), (b) of that paragraph other than shares and to securities prescribed in item (ii) of that paragraph other than shares listed on a securities exchange.

③If a corporation receiving the application of the provisions of paragraph (1) comes to fall under any of the cases listed in the following items, the amount equivalent to the amount listed in the respective item 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:

④The number of months referred to in paragraph (1) is calculated in accordance with the calendar, and any fraction of less than one month is counted as one month.

⑤The treatment of the reserve amount deferred from inclusion in gross profit prescribed in paragraph (1) in the case where a corporation prescribed in Article 53, paragraph (1) of the New Act has carried out a merger, and any other matters necessary for the application of the provisions of that paragraph, are specified by Cabinet Order.

⑥The 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 a business year 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 a business year 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 to a corporation prescribed in paragraph (1) of that Article whose amount of capital or amount of capital contributions exceeds 100 million yen at the end of a business year that commenced before the Effective Date and ends on or after the Effective Date, the phrase "the amount calculated by dividing" in that paragraph is deemed to be replaced with "the amount calculated by dividing (for a business year that commenced before the Effective Date of the 1979 Amendment Act and ends on or after that date, the amount obtained by adding, to the total of the amount equivalent to 8.5/1,000 of the amount calculated by multiplying the revenue from 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, 1979 (referred to as the "designated period for the former reserve rate" in this paragraph) and dividing the result by the number of months in that base year and the amount equivalent to 8.2/1,000 of the amount calculated by multiplying the revenue from 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 result by the number of months in that base year, the total of the amount equivalent to 11.5/1,000 of the amount calculated by multiplying the revenue from 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 result by the number of months in that base year and the amount equivalent to 11.2/1,000 of the amount calculated by multiplying the revenue from 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 result by the number of months in that base year)".

⑦The provisions of Article 56-7, paragraph (4) of the New Act apply to the inclusion in gross profit of the amount of the reserve for planned afforestation that a corporation accumulates pursuant to the provisions of paragraph (1) of that Article in a business year commencing on or after the Effective Date, and with regard to the inclusion in gross profit of the amount of the reserve for planned afforestation that a corporation accumulated pursuant to the provisions of Article 56-7, paragraph (1) of the Former Act in a business year that commenced before the Effective Date, the provisions then in force continue to govern.

⑧With regard to the inclusion in gross profit of the amount of the reserve for program guarantees that a corporation prescribed in Article 56-9, paragraph (1) of the Former Act accumulated pursuant to the provisions of that paragraph in the business year immediately preceding the first business year commencing on or after the Effective Date, the provisions of Article 56-9, paragraphs (2) through (5) and paragraph (7) of the New Act govern.