Accounting in Japan has gone through many changes, the most recent major adjustments were made after 1997. This was when the Prime Minister at that time decided that accounting in Japan had to meet international standards and plug weaknesses in the system. He did this in response to the financial crisis from bad loans.
Choosing an accountant in Japan for your real estate needs is not difficult. There are many companies offering accounting service, some of which are foreign-run. You can choose to work with local businessmen or seek the counsel and service from a company run by an American or foreign group.
Be guided by these principles in Japanese accounting. For instance, transparency is of utmost importance. The Japanese government is the entity that controls accounting standards. This is unlike in places such as the US, Germany or Great Britain where independent organizations control the accounting standards.
In Japan, the Ministry of Finance (MOF) administers and enforces accounting regulations; and controls the Business Accounting Deliberation Council or BADC. It may happen then that some decisions made by MOF may be more political than improvement of accounting procedures. In fact, it happened in 1999 with approval to revalue land holdings to increase capital ratios.
If you have zero accounting experience, instead of relying on information from one accountant in Japan, make an effort to always get a second opinion. The Japanese accounting system still has loopholes and can be used to hide gains or losses, among others. However, if caught, the penalty is severe.
Also, unlike in the US, Japanese accounting does not require privately-owned companies or businessmen from disclosing information voluntarily. In the US, a company’s performance in the market is cause for celebration and marketing to boost even further their position in their respective industry. It’s an effective campaign that is not used in Japan. On a positive note, accountants in Japan have a tendency to feel a close affinity with their clients, and honor this relationship immensely.
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