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SPV settings

The SPV form is the same whether you create a new SPV or edit an existing one. It has three sections:

  • Legal: the Legal entity tab
  • Financial: the Equity, Coupon payment, Debt, Expenses, and Taxes tabs
  • Connections: the Assets tab

This page describes each tab in that order.

This tab holds the basic facts about the legal entity, which you can usually find in the company's registration documents.

Company type​

In Japan, an SPV is set up either as a Kabushiki Kaisha (KK) or, more often, as a Godo Kaisha (GK) in a GK-TK structure. The GK-TK structure is a special form of GK that separates the assets of the GK from its liabilities, and it is the most common SPV form in Japan. GK is therefore the default for a new SPV on Tensor Cloud; the other option is KK.

Enter the full legal entity name in Japanese and English. The Japanese name is required and must not already be used by another SPV; the English name is optional. The name appears in the financial statements and in the SPV list.

Financial year starting month​

In the required SPV financial year field, select the month in which the SPV's financial year starts. This is usually the month the SPV was founded. The financial statements of the SPV are built around this month.

Corporate number​

Enter the SPV's corporate number in the optional Company ID field. Every company in Japan has a unique 13-digit corporate number. Hyphens are ignored when the number is validated. To look up a company's number, search for its name on the National Tax Agency website.

Enter the date on which the SPV was registered in the required Legal entity creation date field. This is usually the date the SPV was founded.

Delete SPV​

When you edit an existing SPV, the Delete SPV button at the bottom of the Legal entity tab deletes it. You can also delete an SPV with the Delete action in the SPV list. Deleting an SPV cannot be undone, but the assets in the SPV are not deleted.

Financial settings​

The Financial section holds the SPV's equity, coupon payment settings, debt, expenses, and taxes. Tensor Cloud uses these inputs to generate the SPV's financial statements.

Equity list​

The equity list holds every equity investment in the SPV, one row per investment. It starts empty; click Add item at the top of the list to add an investment. Each investment needs an Investor, an Amount, and an Investment date. The total equity is shown below the list.

Coupon payment settings​

These settings determine the coupon payments to equity investors:

  • Payment frequency: how often investors are paid, either Once a year (default) or Twice a year.
  • Payment month: the month of the coupon payment. Required.
  • Payout percentage: the share of profit paid out to TK investors, between 0 and 100%. Required.

Debt list​

The debt list holds every loan the SPV has taken on, one row per loan. It starts empty; click Add item at the top of the list to add a loan. The total debt and the debt-to-equity ratio are shown below the list.

Loan settings​

The General tab of the loan dialog has these required fields:

  • Description, Amount, and Lender
  • Repayment frequency: Monthly, Quarterly, Quarterly (SPV-financial year), Biannually, Biannually (SPV-financial year), Yearly, or Yearly (SPV-financial year)
  • Loan received: on or before the repayment start date
  • Repayment start and Repayment end: the repayment end must be after the repayment start

The Interest rate tab sets the Interest rate type. A Fixed rate (default) is a single percentage. A Variable rate is a list of rates, each applying from a given month counted from the repayment start, with stepped interpolation between them. A variable rate needs at least one entry.

Target DSCR​

Enter the SPV's target debt service coverage ratio (DSCR). The field is optional and accepts values between 1 and 5. The target DSCR is saved with the SPV, but it does not change the generated results: the financial statements currently model every loan from the repayment schedule in the debt list.

SPV operating expenses​

The Expenses tab holds costs that belong to the SPV as a legal entity rather than to an individual asset. Typical SPV-level costs are:

  • Accounting cost: bookkeeping, financial reporting, and accounting services
  • Legal cost: legal counsel, contract reviews, and compliance services
  • Software cost: subscription and license fees for SPV management tools
  • Due diligence costs: asset acquisition and evaluation work
  • Professional fees: tax advisors, auditors, and business consultants
  • Start-up costs: initial expenses of setting up the SPV
  • Other SPV operating expenses: SPV-level expenses that fit none of the categories above

The account list contains every SPV-level expense account in the chart of accounts, so it also includes Interest expense, Administrative expenses, Loan origination fees, Other non-operating expenses, Upfront fees, Corporate tax, and Corporate tax adjustment.

Adding expenses​

Click Add item to add an expense. All of the following fields are required:

  • Payment date: when the expense is paid, between 2000-01-01 and 2065-12-31
  • Expense title: a descriptive name for the expense
  • Account: the expense account, chosen from the list above
  • Consumption tax rate: the consumption tax rate that applies to the expense. The default is 10%.
  • Amount (excl. tax): the expense amount in Japanese yen, excluding tax

Managing the expense list​

You can sort the expense list by any column; sort by account to group expenses by category. The default sort is by payment date. To delete expenses, select one or more rows. A floating action button appears at the bottom of the screen with the number of selected rows and a delete button.

Tax settings​

The Taxes tab covers electricity business tax, corporate tax, and property tax.

Electricity business tax​

The electricity business tax has two components, a revenue rate and an income rate, both applied in the SPV's financial statements.

Revenue rate​

Enter the annual tax rate, as a percentage, applied to gross electricity sales revenue. The default is 0.75%. This component is calculated from the SPV's total electricity sales revenue.

Income rate​

Enter the annual tax rate, as a percentage, applied to taxable income. The default is 1.85%. This component is calculated from the SPV's taxable income after expenses and depreciation.

Carry-forward loss cap​

Set the maximum share of each year's taxable income that past tax losses can offset. The default is 100%, which means all available past losses can be used against current profits.

Recognition mode​

Select how the yearly electricity business tax is recognized:

  • On payment (default): booked in the interim and final payment months.
  • Monthly (AETR): spread across the fiscal year using the annual effective tax rate (AETR).

Corporate tax​

Effective tax rate​

Enter the combined rate of national, local, and inhabitant corporate taxes. The default is 28%.

Loss treatment​

Choose whether losses are carried forward to offset future profits (Carry forward, default) or settled within the year they occur (Settle within the year).

Property tax​

These settings cover property tax on the assets the SPV owns.

Tax rate​

Set the annual property tax rate. It is applied to the depreciated value of eligible assets. By default the Standard rate checkbox is selected and the standard rate of 1.4% applies. Clear the checkbox to enter your own rate.

Recognition mode​

Select how the yearly property tax is recognized:

  • JP statutory (default): assessed on January 1 and booked in the selected payment months, listed from April to March.
  • Fiscal-year aligned: assessed at the start of the SPV's financial year and spread evenly over 12 months. The payment month picker then starts from the SPV's financial year starting month.
Payment frequency​

Select the months in which property tax is paid in the Payment months field. The defaults are June, September, December, and February.

Assets​

Add assets to the SPV with the Add button. To remove assets, select them and press Remove. An asset can belong to only one SPV, so assets that are already in another SPV are not offered.