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ACCT 3510 International Accounting KOKUSAI KAIKEIGAKU. Bringing International Accounting Issues into the Classroom: The Case of Japan. Hassan A. Said, PhD School of Business Austin Peay State University. "Land of the Rising Sun". 日本国 Nihon-koku Japan. Bamboo Forest, Kyoto. - PowerPoint PPT Presentation

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  • Bringing International Accounting Issues into the Classroom: The Case of Japan

  • "Land of the Rising Sun". Nihon-koku Japan

  • Bamboo Forest, Kyoto

  • Tokyo From Above

  • Environmental Influences

  • Key to Understanding International Accounting

  • Accounting Topics

  • Topics-Environment Matrix

    External

    Accounting

    Internal

    Accounting

    Political

    Regulatory Structure

    Market Entry /tax impacts

    Economic

    Cost of Capital

    Risk Management

    Cultural

    Secrecy-disclosure

    Budgeting

    Infrastructure

    Availability of Auditors

    Cost Drivers

  • ABOUT JAPAN (NIHON NI TSUITE )

  • U.S.-Japan ComparisonComparison between U.S. and Japanese GAAP is the most frequently asked question. Many of the differences have been eliminated, yet many differences still present, especially in rules implementation and interpretations of similar literature

  • The Accounting Standards Board of Japan (ASBJ)

    Established in July 2001 as aprivate-sector organizationAccounting standards developed by the ASBJ are to be authorized by the Financial Services Agency

  • In 2001, the Financial Accounting Standards Foundation (FASF) was established through ten leading private-sector entities including the JICPA. The ASBJ was organized under the auspices of the FASF as an independent and private-sector entity to develop accounting standards in Japan. ASBJ Continued

  • External Accounting-EnvironmentStandard Setting ProcessU.S. -- FASB Private- http://www.fasb.org/China, Korea & Japan varying levels of govt. controlhttp://en.casc.gov.cn/internet/internet/en/newsreview/2006nzhrhkjzhzzhdjghyhdbg.htmlInternational Accounting Standards Board/http://www.iasb.org/Home.htm Use of comment letters for current projectsUsers of Statementslegal/cultural drivenCompliance - Culture drivenhttp://www.geert-hofstede.com/

  • External Accounting-TopicsExternal Reporting DifferencesU.S., U.K. -- Tax FinancialJapan, Germany -- Tax = FinancialDifferences in Debt and Equity ClassificationsKorea vs. U.S. (short vs. long term)Differences in goodwill treatment U.S. vs. JapanDifferences in asset revaluation US. vs. Brazil or Mexico (or IFRS)

  • Internal Accounting Decision Rights AssignmentNegotiating Joint Ventures China and IndiaPlanning and ControlComplications of Global Operations-foreign exchange issuesCo-location of Knowledge and Rights=Joint ventures vs. wholly owned subsidiariesPerformance EvaluationMultiple Currency Issues- operating risk managementCross-border Decision Rights Issues-FCPATransfer Pricing in International Settings

  • Internal Accounting-EnvironmentEconomic/Political-Planning and ControlInternational Taxes and TreatiesNAFTA (http://www.dfait-maeci.gc.ca/nafta-alena/menu-en.asp/)Foreign Trade Zones (http://ia.ita.doc.gov/ftzpage/)Transfer PricingDecision Rights Issues- APA agreements: (www.irs.gov/businesses/international/)Political/economic- treaties (www.state.gov/)https://www.cia.gov/library/publications/the-world-factbook

  • Internal Accounting-EnvironmentEconomic/Political ContinuedRisk Management- e.g. threat of nationalizationFinancial -- http://www.eiuresources.com/ras/help_about.aspOperational http://www.irmba.com/Corruption Foreign Corrupt Practices Act ethics issues http://www.usdoj.gov/criminal/fraud/fcpa/Corruption index--http://www.transparency.org/

  • Internal Accounting-TopicsPerformance Evaluation (Inter.J. of Acct., 34, #1, pp.49-70)Japan ROA < U.S. ROAlow margins, focus on market share, emphasize target costJapan ROE > U.S. ROEhigh debt levelskeiretsu organization or chaebol (korea)

  • The Solution to Minimize Differences!The ASBJ and the International Accounting Standard Board (IASB) announce Tokyo Agreement on achieving convergence of accounting standards by 2011

  • Where to get more informationJournals - InternationalInternational Journal of Accounting Journal of International Accounting ResearchAdvances in International AccountingJournal of International Business StudiesJournals - AAAAccounting HorizonsIssues in Accounting EducationOtherManagement AccountingJournal of AccountancyEconomist

  • For more information about the ASBJ, visitwww.asb.or.jp/index_e.html

    For more information about the FASB, visitwww.fasb.org.

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