Japanese accounting practices JAPANSE GAAP Japan in the year 2010 had a GDP of 4. 31 trillion dollars making them the 4th largest in the world. With this being said it is important that other countries doing business in the nation have a strong knowledge of their accounting practices. Japanese accounting practices have been going through some major changes over the past 10 years. In 2001 Financial Accounting Standards Foundation (FASF) was formed as well as the Accounting Standards Board of Japan (ASBJ) was created under the FASF to create an accounting standard in Japan.
With the ASBJ and the FASF being in place this game Japan a accounting standard with in the country as well as guidance and how to do deal with practical accounting issues . IFRS Issues In 2005 Japan announced that it would work wit
...h the IFRS in order to remove the differences between Japanese GAAP and the IFRS 2. Eventually in July of the following year a plan was mapped out in which Japan would remove the 26 differences between their GAAP and the IFRS by June of 2011. This plan was eventually never carried out in which the Japanese blame on unforeseen events of the tsunami.
Many companies didn’t want to implement the new IFRS standard due to the fact that it would cost them more money because of the earthquake/tsunami disaster, also the language of the IFRS is English which many accountants would have to learn to speak the language before applying IFRS. The IFRS wouldn’t be implemented in Japan till roughly 2015-2016 Development and honesty Every nation develops their own rules and regulations when it comes to their GAAP,
this is all because every country has its own reasons of doing things weather it is to protect domestic companies or even to allow more investors into your country.
Regardless of all this Japan changed around its GAAP in order to meet the requirements of the Securities Exchange Law, Commercial Code and Corporate Income Tax Law. Currently “the financial statements that are prepared in compliance with Japan’s accounting standards are accepted in EU markets”4. But in 2002 the EU stated that Japan must eventually make the change into the IFRS otherwise some of the 250+ security exchange listed in the EU could possibly be removed. Growth and expansion
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