The Japanese Issues and Perspective on the Convergence of International Accounting Standards

36 Pages Posted: 21 Dec 2006

See all articles by Mitsuru Misawa

Mitsuru Misawa

University of Hawaii at Manoa - Shidler College of Business

Abstract

Since the Japanese accounting method is a unique one of its own, Japanese companies trying to finance overseas are expected to be requested to disclose their performances based on the foreign countries' standards, or to disclose the tables for adjusting differences with these standards. It will be a major handicap for those Japanese companies as they will have difficulty in efficiently raising funds in the overseas markets.

In consideration of these problems, it is a correct direction to change the Japanese accounting standards to international standards. However, the Japanese accounting standards were not built overnight but rather are backed by a long history and are deeply entangled with other regulations. There are other factors such as differences of culture and sense of values. In order to adopt the International Accounting Standards, reviews of other related laws such as the Commercial Law, the Securities Exchange Law and the Tax Law would become necessary.

Consequently, a quick adoption of the International Accounting Standard is less likely to occur; it will most likely occur rather slowly. It is also a problem to be considered and solved in the overall process of total internationalization of the system of the Japanese economy. Although the Japanese effort of converging international with its domestic accounting standards is essential in the long run, Japan will have to take a position on the short term basis that each country should adopt a "mutual approval" policy as long as the accounting standards of the respective countries are equivalent. This is a realistic measure for Japan for the time being.

Keywords: Japan, Japanese Law, Convergence of International Accounting Standards, Issues on Convergence of Accounting

JEL Classification: K12, F42, F34, K22, M41, K23, K42, K33

Suggested Citation

Misawa, Mitsuru, The Japanese Issues and Perspective on the Convergence of International Accounting Standards. Northwestern Journal of International Law & Business, April 2005, Available at SSRN: https://ssrn.com/abstract=952806

Mitsuru Misawa (Contact Author)

University of Hawaii at Manoa - Shidler College of Business ( email )

2404 Maile Way
Honolulu, HI 96822
United States
808-956-9713 (Phone)
808-956-9713 (Fax)

HOME PAGE: http://www2.hawaii.edu/~misawa

Do you have negative results from your research you’d like to share?

Paper statistics

Downloads
601
Abstract Views
2,602
Rank
82,251
PlumX Metrics