The first accounting standard for SMEs in Japan was established in 1949. This is called �gBook Keeping Guidance for SMEs�h. It was established soon after World War II by the request of the Shoup Mission of the US. Since that time, the accounting standard for SMEs, which was appropriate for current situations, was not established. After the burst of the bubble economy in Japan in early 1990,s, SMEs could no more borrow funds from financial institutions on real-estate mortgage or collateral. Financial institutions began to focus on the profitability of SMEs, and an appropriate accounting standard became necessary. For these reasons, The Guideline of Accounting for SMEs was published on August 1, 2005. However, this Guideline is not used widely as was originally expected. Because the idea of single standard narrows the range of choice for accounting treatments, it is a bourdon for many SMEs to make full use of �gThe Guideline�h. Therefore �gThe Basic Guidance of Accounting for SMEs�h was published by the Small and Medium Enterprise Agency and Financial Services Agency on February 1, 2012. Accounting treatment is simplified more in �gThe Basic Guidance �g than in �gThe Guideline�h. However, the current situation where two accounting standards exist together brings new confusion to accounting practice in Japan. In this presentation, the reason for the co-existing of two accounting standards, their characteristics, and the future movement of accounting standards for SMEs in Japan are discussed.
Sachiko Kushibe, University of Kwansei Gakuin, Japan
Stream: Business Administration and Business Economics
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