A Japanese subsidiary must handle both processing that follows Japanese accounting and tax rules and the reporting headquarters requires. When these two demands become separate tasks, the burden on accounting staff grows and the numbers easily fall out of alignment.
- Separate data is being prepared for the Japanese closing and for headquarters reporting
- Headquarters' reporting deadline is early and overlaps with the Japanese closing work
- Account codes and accounting policies do not match between headquarters and Japan
- The numbers for headquarters and the Japanese tax return cannot be explained side by side
This article explains how to balance headquarters reporting with Japanese accounting and tax requirements.
Where the Two Demands Overlap
Japanese accounting and tax must be processed under Japan's rules. Headquarters, meanwhile, may ask for figures under its own accounting standards and reporting format, and differences arise between the two.
Continuing to report without understanding these differences makes the numbers slow to explain and delays the monthly closing.
What to Put in Place to Balance Both
To meet both demands efficiently, it helps to organize the following in advance.
| Item | What to Organize |
|---|---|
| Account mapping | Map Japanese account codes to headquarters' account codes so both share a common framework |
| Accounting standard differences | Identify the main differences between Japanese and headquarters standards and decide how to adjust for them |
| Monthly closing schedule | Work back from headquarters' reporting deadline to set dates for closing and review in Japan |
| Division of roles | Make clear who handles processing under Japanese standards and who handles adjustments for headquarters |
Keep Aligning With Headquarters
Reporting formats and deadlines can change as the business grows. Staying in regular contact with headquarters' accounting staff and picking up changes in their requests early is important.
Differences in accounting standards and tax treatment can be hard to judge. It helps to have advisers who know Japanese practice and also understand headquarters' requirements.
Summary
- Japanese accounting and tax work and headquarters reporting make different demands, so balancing them takes some care
- Organize account mapping and differences between standards to share a common framework
- Set the monthly closing schedule by working back from headquarters' reporting deadline
- Keep aligning with headquarters' accounting staff and pick up changes in requirements early
Contact
JBN supports foreign companies' Japanese subsidiaries in building the structure for accounting, tax, and headquarters reporting.
To discuss balancing headquarters reporting with Japanese accounting and tax, please contact us.