International accounting and Japan

There is an interesting story in the WSJ today concerning Japanese firms listed on European stock exchanges. The EU which has adopted international accounting standards is invetigating whether Japanes accounting standards are "equivalent". It appears that if the Japanese accounting standards are not found equivalent that 89 Japanese firms would be banned from the EU exchanges. The major differences between Japanese and international standards are as follows:


Mergers - still allow pooling and purchase methods
Goodwill - is not recognized unless the acquiring entity have already had investments in the stock issued by the acquired entity.
Leases - more latitude to treat leases as operating
Impairments - no recognition of impairment losses


Yoshinori Kawamura has created an excellent website about Japanese GAAP,
that anyone interested should check out.