Q11: How is the financial closing conducted for a Japanese branch office?

Japanese Certified Public Accountant ・Tax Accountant Hiroya Aihara
Ringo Tax Corporation

A: A Japanese branch office conducts accounting for both the head office abroad and the branch office itself.

Explanation

A Japanese branch office conducts accounting for both the head office abroad and the branch office itself. However, similar to a Japanese corporation, a Japanese branch office also prepares its own financial statements (balance sheet, profit and loss statement) and submits tax returns. Based on this data, the foreign head office performs consolidation. At this time, the financial statements prepared under Japanese standards may be adjusted to conform to the accounting standards of the foreign head office, to facilitate integration by the foreign head office.

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