Monetary and Economic Studies Vol.13, No.1 / July 1995

Bank Accounting and Market Valuation in Japan: An Overview of Accounting Issues of Financial Instruments

Marie Ogawa, Takashi Kubota

This paper considers a framework for introducing market valuation to Japanese bank accounting, focusing on practical issues to be solved.
Reflecting the growing concern over the present historical cost accounting, it is argued that market valuation should be introduced to bank accounting for disclosure purpose in Japan. Particularly, there are strong arguments for market valuation of certain types of financial instruments.
Specific considerations include: the overview of present accounting in Japan, the distinctive features of Japanese bank accounting, the accounting framework of partial market valuation, the "fair value" concept in measuring financial instruments, and its application to valuation of individual financial instruments.

Keywords: Accounting; Financial Instruments; Market Valuation; Market Value Accounting.

Views expressed in the paper are those of the authors and do not necessarily reflect those of the Bank of Japan or Institute for Monetary and Economic Studies.

Copyright © 1995 Bank of Japan All Rights Reserved.

Home Japanese Home