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

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 quot;mutual approvalquot; policy as long as the accounting standards of the respective countries are equivalent. This is a realistic measure for Japan for the time being