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Adoption of IFRS in Japan: challenges and consequences

Noriyuki Tsunogaya (Graduate School of Economics, Nagoya University, Nagoya, Japan)
Andreas Hellmann (Department of Accounting and Corporate Governance, Macquarie University, Sydney, Australia)
Simone Domenico Scagnelli (Department of Management, University of Torino, Turin, Italy)

Pacific Accounting Review

ISSN: 0114-0582

Article publication date: 2 February 2015




The purpose of this study is to provide a rigorous and holistic analysis of the main features of the Japanese accounting environment. It also raises issues related to the adoption of International Financial Reporting Standards (IFRS) in Japan.


For the purpose of investigating the Japanese accounting system, this study applies the accounting ecology framework developed by Gernon and Wallace (1995) and provides a content analysis of relevant meetings of the Business Accounting Council of Japan.


The findings of this study provide evidence that it would be problematic to require the adoption of IFRS for all listed companies in Japan. The main reason for this is that the Japanese policymakers and standard-setting bodies follow two objectives: enhancing the international comparability of financial reporting and maintaining institutional complementarity between financial reporting and other infrastructures such as accounting-related laws.

Research limitations/implications

This study is relevant for accounting researchers and professionals with an interest in Japanese accounting practices. It is also useful for the International Accounting Standards Board and representatives of countries planning to adopt IFRS in the future.


The findings of this study show that contextual issues such as social, organizational and professional environments cannot be ignored in the adoption of IFRS in Japan.



We would like to acknowledge the helpful comments and suggestions of the editor, anonymous reviewers, the discussant and participants of the 36th Annual Congress of European Accounting Association in Paris. This study was supported by the Grand-in-Aid for Scientific Research, KAKENHI (C)23530582, (C)26380606 and (A)24243053.


Tsunogaya, N., Hellmann, A. and Scagnelli, S.D. (2015), "Adoption of IFRS in Japan: challenges and consequences", Pacific Accounting Review, Vol. 27 No. 1, pp. 3-27.



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