Internationalization Of Accounting Standards For Consolidation - Japan :: essays research papers fc

internationalization of Accounting Standards for Consolidation - Japan A CaseStudyThe place of this paper will be to examine problems with internationalizationof accounting standards for consolidations on methods from an internationalperspective - specifically, in the US and Japan. This is an especially timely proposition as standardization of financial markets is a prerequisite to international throw overboard trade. Given the trends toward greater globalization, the motivations ofcompanies for seeking a uniform accounting remains are strong. If companies haveto prepare their accounts according to several different sets of rules, in orderto communicate with investors in the various capital markets in which they lam or for other national purposes, they incur a considerable bell penaltyand feel that m superstary is wasted. This significantly limits global opportunitiesfor multinational businesses. Thus, it is definitive to understand what thedifferences are mingled with accounti ng standards, why they exist, and what problemsthey pose.It is worth noting that no one nation has a set of accounting rules whichappears to have such(prenominal) clear(p) merits that they deserve adoption by the whole world.No one country can claim to have a uniquely place set of rules. The UnitedStates has the longest history of standard mountain. It has the largest standardsetting organization which is characterized by high standards of professionalism.But, even the rules of the United States exhibit compromises between differentinterests of a kind which could have reasonably been decided otherwise.Furthermore, no unanimity exists among U.S. accountants about the merits of theprecise details of the compromises that have been struck. For example, therecent interchange memorandum on consolidation outlines three different methodswhich are generally accepted accounting principles in the US (Beckman, 1995). No one nation has a clear right, onthe basis of existing achievements, to be regarded as predominant in accounting.A great deal more work is needed by accountants from different countries beforewe can reach the point of having a fountainhead founded basis for uniformity.People who study differences among systems of accounting rules are inclined to crowd countries into two categories. On the one hand, there are countries wherebusiness finance is provided more by loans than by equity capital, whereaccounting rules are dominate by taxation considerations and where legalsystems customarily incorporate codes with detailed rules for matters such asaccounting. The effect of taxation systems can be particularly pervasive. Often,the taxation system effectively offers tax breaks for businesses by allowinggenerous measurement of expenses and humiliated measurement of revenues on conditionthat these measurements are used for general describe purposes. Companies havestrong incentives to take advantage of these taxation concessions as in truth cash