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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 6-K
REPORT OF FOREIGN ISSUER
PURSUANT TO RULE 13A-16 OR 15D-16 OF THE
SECURITIES EXCHANGE ACT OF 1934
FOR THE MONTH OF NOVEMBER 1998
NIPPON TELEGRAPH AND TELEPHONE CORPORATION
(TRANSLATION OF REGISTRANT'S NAME INTO ENGLISH)
19-2, NISHI-SHINJUKU 3-CHOME
SHINJUKU-KU, TOKYO 163-19, JAPAN
(ADDRESS OF PRINCIPAL EXECUTIVE OFFICES)
Indicate by check mark whether the registrant files or will file annual
reports under cover of Form 20-F or Form 40-F.
Form 20-F X Form 40-F
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Indicate by check mark whether the registrant by furnishing the information
contained in this Form is also thereby furnishing the information to the
Commission pursuant to Rule 12g3-2(b)
Yes No F
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If "Yes" is market, indicate below the file number assigned to the registrant
in connection with Rule 12g3-2(b): 82-
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DISCONTINUANCE OF REGULATORY ACCOUNTING PRINCIPLES
In order to promote further competition in the telecommunications market in
Japan, and as part of the Japanese Government's overall policy toward
deregulation, the Telecommunications Business Law (the "Telecom Business Law")
was revised in May 1998 and became effective as of November 1, 1998. Under the
revised law, Type I Carriers generally need not obtain approval from the
Minister of Posts and Telecommunications (the "MPT") but only notify MPT of
their rates. For certain services to be provided by such carriers with
"designated telecommunications facilities" (defined as a facility providing a
percentage of telecommunications service in a region in excess of a percentage
designated by MPT) and specified in the ordinance of the Ministry of Posts and
Telecommunications which became effective as of November 1, a price-cap system
is to be introduced. The ordinance stipulates that the price-cap system is
applicable to basic telephone services, ISDN services, and leased circuit
services provided within prefectures by a Type I Carrier with such "designated
telecommunications facilities."
As a result, Nippon Telegraph and Telephone Corporation (the "Company") is
discontinuing accounting for all of its operations in accordance with the
provisions of Statement of Financial Accounting Standards No. 71, "Accounting
for the Effects of Certain Types of Regulation" ("SFAS 71"), in its financial
statements being prepared in conformity with U.S. generally accepted accounting
principles ("U.S. GAAP") as of and for the six-month period ended September 30,
1998. Pursuant to the requirements of Statement of Financial Accounting
Standards No. 101, "Regulated Enterprises--Accounting for the Discontinuation
of Application of FASB Statement No. 71" ("SFAS 101"), the Company is recording
an extraordinary non-cash charge in its U.S. GAAP financial statements of
approximately (Yen) 462 billion net of tax for the six-month period ended
September 30, 1998.
Under SFAS 71, the Company had accounted for the effects of rate-making
process by establishing certain regulatory assets, including the deferral of
certain costs based on approvals received from regulators. After assessing the
recent revision of the Telecom Business Law and proposed price-cap accounting
for regulated operations. The Company's determination that it is no longer
eligible for the continued application of SFAS 71 is based on the belief that
the convergence of competition, technological change, actual and potential
regulatory and legislative actions and other factors are creating open and
competitive markets.
In accordance with SFAS 101, the Company is eliminating approximately (Yen)
889 billion of regulatory assets from its U.S. GAAP balance sheet.
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SIGNATURE
Pursuant to the requirements of the Securities Exchange Act of 1934, the
registrant has duly caused this report to be signed on its behalf by the
undersigned, thereunto duly authorized.
NIPPON TELEGRAPH AND TELEPHONE
CORPORATION
/s/ Mototane Miyazaki
By __________________________________
NAME: MOTOTANE MIYAZAKI
TITLE:EXECUTIVE MANAGER
GENERAL AFFAIRS DEPARTMENT
Date: November 11, 1998
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