①In the case where a domestic corporation has revaluated its assets to reduce their book value, the amount of the reduction is excluded from deductible expenses, when calculating the amount of income of the domestic corporation for each business year.

②With regard to a domestic corporation's assets, when the value of the assets has fallen below their book value due to significant damages caused by a disaster or any other events specified by Cabinet Order have occurred, and when the domestic corporation has revaluated the assets and accounted for as a loss in order to reduce their book value, the portion of the amount of the reduction up to the difference between the book value of the assets as of immediately prior to the revaluation and the value of the assets as of the end of the business year containing the date of the revaluation is included in deductible expenses, when calculating the amount of income for the business year containing the date of the revaluation, notwithstanding the provisions of the preceding paragraph.

③In the case where a domestic corporation has revaluated its assets to reduce their book value pursuant to the provisions of the Corporate Reorganization Act or the Act on Special Measures for the Reorganization Proceedings of Financial Institutions as a result of an order of approval of a reorganization plan having been made, the amount of the reduction is included in deductible expenses, when calculating the amount of income for the business year containing the date of the revaluation, notwithstanding the provisions of paragraph (1).

④In the case where an order on the confirmation of a rehabilitation plan has been rendered for a domestic corporation or any equivalent event as specified by Cabinet Order has occurred, when the domestic corporation evaluates the value of its assets as specified by Cabinet Order, the amount specified by Cabinet Order as a valuation loss of the assets (excluding those specified by Cabinet Order as not being suitable for recording a valuation loss) is included in deductible expenses, when calculating the amount of income for the business year containing the date of any of such events, notwithstanding the provisions of paragraph (1).

⑤The provisions of the preceding three paragraphs do not apply to shares or capital contributions of another domestic corporation specified by Cabinet Order that has a full controlling interest with the domestic corporation referred to in the preceding three paragraphs, in the case where that domestic corporation holds them, or to shares or capital contributions of another group tax sharing corporation (excluding a corporation specified by Cabinet Order as a corporation not subject to the provisions of Article 64-5 (Aggregation of Profits and Losses), and the group tax sharing parent corporation) held by the domestic corporation referred to in those provisions in the case where it is a group tax sharing corporation.

⑥In the case where the provisions of paragraph (1) were applied, with regard to the assets whose reduced value due to revaluation was not included in deductible expenses, it is deemed that the book value of the assets was not reduced, when calculating the amount of income for each business year after the business year containing the date of the revaluation.

⑦The provisions of paragraph (4) apply only in the case where a Final Return contains a detailed statement concerning the inclusion in deductible expenses of the amount specified by Cabinet Order as the amount of valuation loss prescribed in the paragraph (referred to as a "statement of valuation loss" in the following paragraph) and is attached with the documents specified by Ministry of Finance Order (referred to as "documents related to valuation loss" in the following paragraph) (when with regard to the assets prescribed in Article 25, paragraph (3) (Valuation Gains on Assets), there is any amount specified by Cabinet Order as the amount of valuation gain prescribed in the paragraph (such case is referred to as the "case where there is a valuation gain" in the following paragraph), only in the case where a Final Return contains a statement of valuation gain prescribed in paragraph (6) of the Article (referred to as a "statement of valuation gain" in the following paragraph) and is attached with the documents related to valuation gain prescribed in paragraph (6) of the Article (referred to as "documents related to valuation gain" in the following paragraph)).

⑧Even in the case where a Final Return has been filed without a statement of valuation loss (in the case where there is a valuation gain, without a statement of valuation loss or a statement of valuation gain) or without documents related to valuation loss (in the case where there is a valuation gain, without documents related to valuation loss or documents related to valuation gain), the district director may apply the provisions of paragraph (4), when they find any unavoidable grounds for the person's failure to make entries of such a statement or to attach such documents.

⑨Beyond what is provided for in the preceding three paragraphs, necessary matters concerning the application of the provisions of paragraphs (1) through (5) are specified by Cabinet Order.