035 Revision of a part of the Rules of Financial Statements in Companies Act
The Ministry of Justice announced publicly on 30th July 2010 that the Ministry would revise some of the Rules of Financial Statements in Companies Act, along with the announcement of “the accounting standards on presentation of the comprehensive income” by the Accounting Standards Board of Japan. They are asking for opinions publicly before the enforcement. These Rules of Financial Statements are something provided as an ordinance proposal of the Ministry of Justice that stipulates the contents of financial statements mandated by Companies Act.
This revision allows a subheading “valuation and translation adjustments” to be presented as either “valuation and translation adjustments” or “accumulated other comprehensive income.” On the other hand, the accounting standards demand that it should be presented only as “accumulated other comprehensive income.”
So, there seems to be a widening gap between the accounting standards and the ordinance of the Ministry of Justice. We could say that the Ministry of Justice takes into consideration the SMEs (Small and Medium Enterprises) which are obliged to prepare financial statements based on the ordinance and for which it is tough to apply the new standards. However, it is expected that the difference between the accounting standards and the ordinance of the Ministry of Justice should be unified somehow and the adjustment should be made.
