Revision to Guidelines for Accounting Standards of SMEs

In Japan, there are “Guidelines for Accounting of Small and Medium-sized Enterprises” (the Guidelines) that non-publicly listed companies or that are not large companies under the Companies Act can rely on when preparing their financial statements. Such companies are audited by Certified Public Accountants. 

These Guidelines were recently revised on May 10, 2023.

These Guidelines are created by four organizations: Japan Federation of Certified Public Tax Accountants’ Associations, The Japanese Institute of Certified Public Accountants, The Japan Chamber of Commerce and Industry, and The Accounting Standards Board of Japan, in cooperation with the Ministry of Justice, the Financial Services Agency, and the Small and Medium Enterprise Agency.

Compared to the corporate accounting standards that listed companies rely on in preparing their financial statements, the standards in these Guidelines are simplified and easier for SMEs to deal with.

For example, these Guidelines allow the use of the “Last Purchase Price” method inventory valuation.

In addition, certain tax accounting treatment is also permitted, resulting in fewer adjustments required for corporate tax returns. For example, the calculation of the allowance for doubtful accounts can be based on the criteria specified in the Corporate Tax Law under certain conditions.

Furthermore, companies that prepare their financial statements in accordance with these Guidelines may enjoy certain benefits such as discounted guarantee rates from credit guarantee associations and relaxed loan conditions.

While the abovementioned information pertains to the “Guidelines for Accounting of Small and Medium Enterprises,” there is also document on the “Code for Accounting of SMEs” (the Code) specifically designed for smaller companies. The Code does not cover topics such as “tax effect accounting” and “accounting for organizational restructuring”. The descriptions in this Code are more concise, providing even simpler accounting rules.

It is recommended to apply the appropriate set of guidelines based on the size of your company.

Disclaimer: All views expressed in this article are solely for informational purposes and should not be construed as legal advice. This information is for reference only and is bound to change in case of any amendments or changes to applicable laws. We do not assume any responsibility or liability for any errors or omissions in the content of this article, and do not make any warranties about the completeness, reliability and accuracy of the information expressed in this article.

HLS Global Group and HWS GmbH & Co. KG Form International Strategic Joint Venture

July 30, 2020

Shunsuke Saito
Hotta Liesenberg Saito LLP


HLS Global Group and HWS GmbH & Co. KG Form International Strategic Joint Venture
Creating New Opportunities for Japanese Companies in Europe through a Partnership Founded on Trust

Los Angeles, CA, U.S. / Stuttgart, Germany: Today, Hotta Liesenberg Saito LLP, a leading international accounting, taxation, and business advisory firm, announced a new joint venture with HWS GmbH & Co. KG, a German full-service accounting, taxation, and business advisory firm with a rich history spanning nearly a century. This partnership will empower existing and new clients by creating new business opportunities for Japanese companies in Germany and for German companies globally.


International Tax Accountants – How they can support your Market Expansion in Japan

If your business is operating across borders, competing in the Japanese market as well as in your home jurisdiction, complying with local tax laws, meeting the necessary reporting requirements, and generally staying on top of your tax activities can be challenging. And it is often more than what the internal finance department is equipped for.

As well as needing a whole new knowledge base when navigating Japan’s increasingly complex tax landscape, many companies simply require additional resources to handle intensified accounting and tax activities in multiple countries.

As you will know already if you have been involved in medium-sized or large corporate entities, one of the keys to success is operational alignment. Without the right approach and skills to completely align your accounting and tax activities to minimize your global tax accountability, you will not be giving your corporate strategy and Japan market entry activities the best chance of success.

In this article, we explore the various benefits for your business by hiring the right international tax accountant in Japan.


Individual Income Tax withheld from monthly salary

Monthly salary

The income tax amount withheld from monthly salary and bonus is calculated according to the withholding tax amount table issued by National Tax Agency. The withholding tax amount table has 3 kinds of categories; Kou-ran, Otsu-ran, Hei-ran. (more…)