Russell/Nomura Japan Equity Indexes

Research evidence excerpt

Russell/Nomura Japan Equity Indexes

Nomura | Russell/Nomura Japan Equity Indexes 27 July 2026

4.2.1 Shareholder’s equity at book value

Actual shareholders’ equity13 from the latest reporting period as of the periodic reconstitution base date is used.

Use data available in the following order by accounting standard: IFRS, J GAAP (Consolidated), US GAAP, J

GAAP (nonconsolidated).

The shareholders’ equity (BV) figure used in the calculation of adjusted P/B is the actual shareholders’ equity

figure adjusted for changes in capital structure that have occurred between the most recent fiscal year-end and the

periodic reconstitution base date.

4.2.2 Unrecognized pension liabilities14

Provisions for the unfunded portion of the pension obligation, or the pension obligation minus pension plan

assets, are recognized on the balance sheet as a general rule, but this can be done over time. This unrecognized

portion is known as unrecognized pension liabilities, a potential liability that will have to be accounted for

eventually. Recognition of the unfunded portion of the pension obligation varies by company, with some having

recorded substantial provisions on their balance sheets and others having a large amount of unrecognized pension

liabilities. To eliminate this discrepancy, P/B is adjusted for unrecognized pension liabilities.

Specifically, the total amount of the following three unrecognized pension liability items disclosed in securities

filings are deducted, taking into account the effective tax rate, from shareholders’ equity at BV. The effective tax

rate is reviewed at the time of the periodic reconstitution.

• Unrecognized benefit obligation at transition

• Actuarial assumption adjustment

• Unrecognized prior service costs