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

Inter domainalization of Accounting Standards for Consolidation - Japan A lawsuitStudyThe purpose of this paper will be to examine problems with internationalisationof be regulations for consolidations on methods from an internationalperspective - specifically, in the US and Japan. This is an in particular timelytopic as standardization of financial markets is a necessary to internationalfree trade. Given the trends toward greater world-wideization, the motivations ofcompanies for seeking a alike bill system ar strong. If companies guardto prep ar their accounts according to some(prenominal) variant sets of rules, in orderto communicate with investors in the various capital letter markets in which theyoperate or for other national purposes, they incur a considerable cost penaltyand feel that money is wasted. This significantly limits global opportunitiesfor multinational businesses. Thus, it is important to understand what thedifferences are between accounting standard s, wherefore they exist, and what problemsthey pose.It is worth noting that no one nation has a set of accounting rules whichappears to have such clear merits that they deserve adoption by the social unit world.No one country can claim to have a uniquely correct set of rules. The uniteStates has the longest history of standard setting. 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 discussion memorandum on consolidation outlines three different methodswhich are GAAP 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 de al more subject field is needed by accountants from different countries beforewe can reach the orchestrate of having a well founded basis for uniformity.People who study differences among systems of accounting rules are inclined togroup 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 dominated by revenue considerations and where legalsystems customarily arrest 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 allowing freehanded measurement of expenses and modest measurement of revenues on conditionthat these measurements are employ for general reporting purposes. Companies havestrong incentives to take advantage of these taxation concessions as real cash