Japan's official language is Japanese. Every country has different accounting standards due to differences in legal systems and business customs. A recent example of the discrepancies that are possible are the financial statements for SmithKline Beecham found in their annual report for 1997. Despite what one would think would be systems of law and business custom as close as the USA and the UK, that annual report reveals that for 1997 under UK GAAP net income was 1,079 million pounds, while under US GAAP, net income was 828 million pounds. While the problem arose mostly due to handling of goodwill, the differences in the figures are astounding.
Japan is even more unique.
For example, Japan follows in many ways the German system of using reserves to increase the financial strength of the company, but in lowers official reported profits. That also explains in many ways the stratospheric level of Japanese PERs. The preparation of financial statements in Japan is covered by Ministry of Finance regulations Copies of translations of the 1997 version of those regulations can be found below. Regulations Concerning the Terminology, Forms and Methods of Preparation of Financial Statements 2. There are substantial differences in the legal rights of shareholders in each country.