accounting standards

Accounting Standards

INTRODUCTION

Accounting standards are regulations or rules (including the laws and statutes) governing the preparation of financial statements. Standard setting is the process of formulation or formulation of accounting standards. Accounting standards is the result of standard setting. But in practice differs from that specified by the standard. There are four reasons that explain, among other things:

    In most countries, the penalty for non-compliance with the provisions of accounting tends to be weak and ineffective.
    Companies may voluntarily report more information than required.
    Some states allow companies to ignore the accounting standards do so if the company's operations and financial position will tersajikan better results.
    In some countries accounting standard applies only to the financial statements themselves, and not for the consolidated report.

Accounting standard setting generally involves a combination of private and public sector groups. The relationship between accounting standards and accounting processes are very complicated and do not always move in the same direction. In the previous discussion we distinguish between fair presentation accounting orientation versus legal compliance. Accounting reasonable peyajian usually associated with common law countries, while accounting legal compliance generally found in code law countries. This difference is seen in the standard-setting process, in which the private sector is more influential in countries with a fair presentation of law, while the public sector is more influential in the country with a code law legal compliance.


2. ACCOUNTING SYSTEM IN JAPAN

Accounting and financial reporting in Japan reflects the combined influence of various domestic and international. Two separate government agency responsible for the regulation of accounting and corporate income tax law in Japan has further effect as well. In the first half of the 20th century, reflecting the influence of German accounting thought: in the second half, the ideas of U.S. influence. More recently, the influence of the body of the International Accounting Standards Board began to be felt, and in 2001 a major change occurred with the establishment of private sector organizations as a maker of accounting standards.

Japan is a traditional society with cultural and religious roots strong. Group consciousness and interdependence in personal relations and corporate against a reasonable relationship between independent individuals and groups in western countries. The Japanese company has an equity stake together with each other, and often jointly own other companies. Investment interlocking produces a gigantic industrial conglomerate known as keiretsu. Banks often become part of this great industry group.

The use of bank loans and debt capital to finance large companies expanding fairly much when viewed from the point of view of the West and especially the company's management more accountable to the banks and other financial institutions, as opposed to shareholders. The central government also imposed strict control over a wide range of business activities in Japan, which means a strong bureaucratic control in matters of business, including accounting. Knowledge of the main business activities are limited to the company and other parties such as banks and the government.

Keiretsu's capital, is in line with the changes in the Japanese structural reforms to overcome economic stagnation that began in the 1990s. The financial crisis that followed the outbreak of Japan's bubble economy is also pushing for a comprehensive evaluation of the Japanese financial reporting standards. It is apparent that many accounting practices to hide how bad the company in Japan. A change in accounting was announced at the end of the 1990s to make the economic health of Japanese companies become more transparent and bring Japan closer to international standards.

Accounting Regulation and Enforcement Rules

The national government still has the most significant influence on accounting in Japan. Accounting regulation is based on three laws: Commercial Law, Capital Market Law and Income Tax Law Company.

    Commercial law is governed by the Ministry of Justice (MOJ). The law is at the core of the accounting regulations in Japan and most have a large influence. Developed from German commercial law, the law enacted earlier in 1980, but was only implemented in 1899. Protection of creditors and shareholders is the main principle with a clear dependence on the historical cost. Disclosure of credit worthiness and availability of profits for distribution of dividends is also equally important. All companies are required to meet established accounting provisions, which are contained in the rules regarding the balance sheet, income statement, statement of operations and supporting schedules perusahaandengan limited liability.
    Public-owned company must further comply with the Capital Market Law (SEL) administered by the Ministry of Finance. SEL made under the Capital Market Law and the U.S. imposed on Japan by the U.S. during the occupation after World War II. SEL main aim is to provide information in making investment decisions. Although SEL requires the same basic financial statements such as commercial law, terminology, form and content of financial statements is defined more specifically by the SEL, some financial statement items reclassified for presentation purposes and additional details are given. However, net income and shareholders' equity remains the same according to the Commercial Law and SEL.
    Business Accounting Advisory Council (BADC) is a special adviser to the agency's finance ministry is responsible for developing accounting standards in accordance with the SEL. BADC can be said to be a major source country GAAP in Japan now. But BADC can not exclude that different standards of commercial law. The BADC members appointed by the finance ministry and work part time. They come from academia, government, business circles as well as members of the Institute of Certified Public Accountants in Japan (JICPA).

The big change in the accounting standard-setting in Japan occurred in the formation 2001dengan Accounting Standards Board of Japan (ASBJ) and the associated watchdog known as the Institute of Financial Accounting (FASF). As an independent, private sector organizations, ASBJ expected to become stronger and more transparent and less influenced by political pressures and special purpose, when compared with the BADC. ASBJ working with the IASB in developing IFRS.

Financial Reporting

The company established under commercial law required to prepare a report that shall be approved by the annual meeting of shareholders which include: balance sheet, income statement lapioran, business reports, proposals for setting use (appropriation) earnings on hold, supporting schedules.

Note the accompanying balance sheet and income statement explaining the accounting policies and provide supporting detail. The report outlines the efforts of business and information about operations, financial position and results of operations. A number of supporting schedules must also be made, apart from the notes to the financial statements, which include:

    Changes in share capital and statutory reserve
    Changes in bonds and long-term debt and short-term
    Changes in fixed assets and accumulated depreciation
    Assets in underwriting
    Debt guarantees
    Changes in provisions
    Amounts payable to and collectible from controlling shareholder
    Equity holdings in subsidiaries and the number of shares owned by the company's subsidiaries.
    Receivables from subsidiaries
    Transactions with directors, the auditor shall, controlling shareholders and third parties that pose a conflict of interest
    Remuneration paid to directors and auditors shall

This information is compiled for a single year by a parent company and shall be audited by the auditor. Commercial law does not require a cash flow statement.

The company listed its shares must prepare financial statements in accordance with the Capital Market Law (SEL), which generally requires the same basic financial statements with commercial law coupled with the cash flow statement. But according to the consolidated financial statements SEL was not primarily the parent company's financial statements. The financial statements and schedules are prepared in accordance with the SEL must be audited by an independent auditor. Forecast cash flow for the next 6 months included as additional information in the reports to the Ministry of Finance. The report forecasts have also been reported. Overall, the report forecasts the number of very large companies in Japan. But this information is only reported in the mandatory and rarely presented in the annual report to shareholders.

Accounting Measurement

Commercial law requires large companies to prepare consolidated financial statements. In addition the company listed its shares must prepare consolidated financial statements in accordance with the SEL. Account is a separate company basis for consolidated reporting danumumnya same accounting principles used for both. Subsidiaries are consolidated when the parent company directly or indirectly control the financial and operating policies. Although the pooling of interests method is allowed, the purchase method for business combinations commonly used.

Most accounting practices carried out in recent years as a result of the Great Change in Accounting. Recent changes include:

    Require the company listed its shares to make a statement of cash flows
    Expanding the number of subsidiaries are consolidated based control that and not the percentage of ownership
    Expanding the number of affiliated companies accounted for under the equity method and is not based on significant influence on the percentage of ownership
    Assessing investment in market prices of securities and not the acquisition cost
    Provision over the liabilities
    Full accrual on pension and other retirement obligations.


3. CONCLUSION

Accounting standards are regulations or rules (including the laws and statutes) governing the preparation of financial statements. Standard setting is prosesperumusan or formulation of accounting standards. The standard is the result of penetapanstandar. However, actual practice differs from the prescribed standard. Accounting standard setting involves a combination of private sector groups yangmeliputi accounting profession, users and compilers of the financial statements, dankelompok public employees which includes agencies such as tax authorities, ministries yangbertanggungjawab on commercial law and capital market commission. Yangmerupakan exchanges private or public sector (depending on the country) also affect prosestersebut. In common law countries, the private sector tends to be more influential and profesiauditing to organize themselves and to better melakukanpertimbangan above attest to the fair presentation of financial statements. In the State-negarahukum code, more influential and public sector accounting profession tend to lebihdiatur by the State. This is why accounting standards vary around the world
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