JAPAN Law and Practice Contributed by: Hiroaki Takahashi, Kaoru Sato, Kenji Miyagawa and Koji Kawamura, Anderson Mori & Tomotsune
8.2 Dealing With Legal Issues In most cases, true sale legal opinions are ren - dered either without reference to the originator’s accounting treatment of the relevant transac - tion, or on the assumption that the originator’s accounting treatment is consistent with a legal true sale. However, where legal practitioners are specifically requested to opine on how the originator’s accounting treatment affects the legal nature of a transfer, the legal opinion will be rendered on the basis of certain assumptions and qualifications, based on the general under - standing that legal analyses of true sale should be considered separately from the question of accounting treatment.
Japanese thin-capitalisation legislation in connection with SPEs; • where the SPE is a TMK, whether that TMK is a tax-qualifying TMK; and • where TK investments are involved, the valid - ity of the TK arrangement from the Japanese tax perspective. 8. Accounting Rules and Issues 8.1 Legal Issues With Securitisation Accounting Rules Accounting opinions on the off-balance sheet treatment of securitisation transactions are usu - ally based on the true sale legal opinions on such transactions. However, in securitisation transac - tions, factors such as the originator’s account - ing treatment of the transaction and whether the transacting parties intend for the transaction to constitute a true sale are critical factors for the purposes of issuing a true sale legal opinion. Accordingly, if a transaction is treated as on- balance sheet by the originator, an issue could arise as to whether a true sale opinion could be rendered, notwithstanding any such on-balance sheet accounting treatment.
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