During periods of economic transition, such as the introduction of new accounting standards, companies' financial statements do not necessarily reflect their actual financial soundness. Balance sheets, income statements and other financial reports, therefore, should be analyzed from multiple viewpoints.
Recently, two major changes were made to Japanese accounting standards. The first involves the disclosure of retirement-allowance payments, while the second deals with the valuation of financial assets based on market prices. The changes were made to facilitate the establishment of international accounting standards.
In the past, Japanese companies did not have to report total retirement-allowance payments or unrealized losses on assets caused by discrepancy between their book and market values.
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