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This article applies to Microsoft Dynamics AX 2012 R2 for the Japan (jp) region.


This article describes that a country-specific update is available to support reduction entry accounting treatments in Japan in Microsoft Dynamics AX 2012 R2.

More Information

A corporation receives a grant or subsidy to obtain certain assets and the grant is included in the taxable income. Meanwhile, a tax deferral benefit for government grant is provided to the corporation.

The accounting treatment is called as compressed entry or reduction entry. There are two types accounting treatments to recognize the reduction entry:

  • Direct-off: A direct reduction of the acquisition price of the asset.

  • Reserve: A separate value that is managed on the equity side of the balance sheet.

There are three features to address these business requirements:

  • Recognize and measure government grant or subsidy by supporting direct-off method.

  • Recognize and measure government grant or subsidy by supporting reserve method.

  • Support the depreciation with applied reduction entry.

Update information

This country-specific update is included in Cumulative Update 7 (CU7) for Microsoft Dynamics AX 2012 R2. To apply this country-specific update, install CU7 for Microsoft Dynamics AX 2012 R2.

For more information about CU7 for Microsoft Dynamics AX 2012 R2, click the following article number to view the article in the Microsoft Knowledge Base:

2885603 Cumulative Update 7 (CU7) for Microsoft Dynamics AX 2012 R2 Note This is a "FAST PUBLISH" article created directly from within the Microsoft support organization. The information contained herein is provided as-is in response to emerging issues. As a result of the speed in making it available, the materials may include typographical errors and may be revised at any time without notice. See Terms of Use for other considerations.

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