Global Unification of Accounting Standards

This chapter examines the development of accounting standards in Japan in recent decades from the perspective of performative institutional change. It reveals that recent accounting standard-setting in Japan has been significantly driven by globalization. In other words, the globalization of business activities against the backdrop of radical financial deregulation aimed at free, fair, and global markets has led Japanese accounting standards to eliminate the differences between domestic accounting standards and U.S. GAAP and global IFRS in order to achieve international convergence. Overall, accounting standard setters and key actors in Japan have emphasized global standards rather than maintaining traditional Japanese accounting practices. This illustrates an aspect of performative globalization that has normatively shaped the decisions of standard setters (operative members). However, the use of the IFRS is not yet mandatory but optional in Japan, and there is currently a unique set of IFRS-based accounting standards (JMIS) that exceptionally allows some accounting treatments long embraced in Japan, which can be conceived as a case of counterperformative action to the strong wave of globalization.