ASBJ 41
Accounting Standard for Subsequent Events
Accounting Standard for Subsequent Events is part of the Japan GAAP framework.
Exposure Draft (January 2026)
STATUS NOTE: This Statement was released as an EXPOSURE DRAFT on January 9, 2026, with a proposed effective date for fiscal years beginning on or after April 1, 2027. Confirmation against ASBJ's final published standard is recommended upon formal adoption.
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Conceptual Framework Linkage
A single, dedicated standard replacing scattered auditing-committee-report guidance
ASBJ Statement No. 41 addresses events OCCURRING AFTER the balance sheet date but BEFORE the financial statements are APPROVED for issue – determining WHETHER such events should trigger an ADJUSTMENT to the financial statements THEMSELVES, or merely a DISCLOSURE. Previously, Japan's subsequent events guidance was SCATTERED across Auditing Standards Committee Reports and general accounting principles, WITHOUT a single, dedicated ACCOUNTING standard – this Statement CONSOLIDATES and SYSTEMATISES that guidance while ALIGNING it with IAS 10 internationally.
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Scope – Consolidating Previously Scattered Guidance
All companies preparing financial statements under J-GAAP
This Statement applies to ALL companies preparing financial statements, addressing events between the BALANCE SHEET date and the date financial statements are APPROVED for issue.
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Adjusting vs Non-Adjusting Events
Evidence of conditions at the balance sheet date, versus new conditions arising after
Event type Treatment
Adjusting event Provides EVIDENCE of conditions that EXISTED at the balance sheet date – the financial statements are ADJUSTED to reflect this evidence
Non-adjusting event Indicative of conditions that AROSE AFTER the balance sheet date – DISCLOSED only, with NO adjustment to recognised amounts
This TWO-CATEGORY framework directly MIRRORS IAS 10's own adjusting/non-adjusting event distinction internationally.
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The Approval Date – the Key Reference Point
Defining precisely when the subsequent events window closes
The subsequent events REVIEW period runs from the balance sheet date UNTIL the date the financial statements are APPROVED for issue (typically board approval, 承認日) – a PRECISE reference point this Statement seeks to CLARIFY and make CONSISTENT across preparers, addressing PRACTICAL questions such as HOW to treat information arriving from SUBSIDIARIES close to the parent's OWN approval deadline.
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Going Concern Reassessment
A subsequent event can fundamentally change the basis of preparation
Where a subsequent event INDICATES that the GOING CONCERN basis of preparation is NO LONGER appropriate (e.g. a decision to LIQUIDATE, or cease TRADING, arising AFTER the balance sheet date), this represents the MOST SIGNIFICANT possible category of adjusting-type consequence – REQUIRING a FUNDAMENTAL change to the basis on which the ENTIRE financial statements are prepared, RATHER than a narrow, isolated adjustment.
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Why This Standard Was Needed – Systematising Previously Dispersed Rules
Clarifying the basis for existing practice, not overhauling it
Commentary on this exposure draft has NOTED that the NEW standard is NOT expected to SUBSTANTIALLY change existing PRACTICE – Japanese companies have ALREADY been applying broadly SIMILAR principles through auditing-standards-committee guidance and general accounting PRINCIPLES. Rather, this Statement's PRIMARY value lies in providing a CLEAR, SYSTEMATIC, dedicated ACCOUNTING basis for treatment that was PREVIOUSLY scattered and less FORMALLY codified – REDUCING the risk of INCONSISTENT judgement across preparers.
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Worked Example – an Adjusting Event
Reflecting evidence of a condition that already existed
Example: A major customer's bankruptcy confirming an existing receivable's impairment
A company's fiscal year ends March 31. On April 20 (before board approval), a major customer with an outstanding receivable at March 31 files for bankruptcy, confirming the customer had already been in serious financial distress AT the balance sheet date.
This is an ADJUSTING EVENT – the bankruptcy filing PROVIDES EVIDENCE of a condition (the customer's financial distress) that ALREADY EXISTED at March 31. The company ADJUSTS its financial statements, recognising an IMPAIRMENT of the receivable AS AT the balance sheet date.
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Worked Example – a Non-Adjusting Event
Disclosure only, no adjustment to recognised amounts
Example: A fire destroying a warehouse after year end
The SAME company's warehouse is destroyed by a fire on April 25 – an event with NO connection to conditions existing at the March 31 balance sheet date.
This is a NON-ADJUSTING EVENT – the fire is INDICATIVE of a condition ARISING AFTER the balance sheet date. The company DISCLOSES the nature of the event and, WHERE practicable, an estimate of its FINANCIAL effect, WITHOUT adjusting the RECOGNISED amounts in the March 31 financial statements themselves.
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Disclosure Requirements
What ASBJ Statement No. 41 (as proposed) requires
The date financial statements were approved for issue Nature of material non-adjusting events, and an estimate of their financial effect (or a statement that such an estimate cannot be made)
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Critical Judgments & Estimates
Where judgement matters most
SIGNIFICANT JUDGEMENTS
Distinguishing adjusting from non-adjusting events Whether a subsequent event undermines the going concern basis of preparation
SIGNIFICANT ESTIMATES
Estimated financial effect of a material non-adjusting event, where practicable to determine
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Relationship to IAS/IFRS
Comparison – J-GAAP (as proposed) vs IAS 10
Feature J-GAAP (ASBJ Statement No. 41, proposed) IFRS (IAS 10)
Adjusting/non-adjusting distinction YES YES – converged
Going concern reassessment YES YES – converged
This Statement is a DELIBERATE, EXPLICIT convergence project – ASBJ's OWN commentary on the exposure draft specifically CITES alignment with IAS 10 as a core OBJECTIVE, alongside the domestic goal of CONSOLIDATING previously scattered rules.
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Statement Mapping
Where every subsequent event lands
Event Statement(s) affected Notes
Adjusting event BS P&L Recognised amounts adjusted
Non-adjusting event Notes only Disclosed, no adjustment to recognised amounts
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Related Standards
Cross-reference map
Standard Connection
ASBJ Statement No. 22 Consolidated Financial Statements – relevant for subsidiary reporting flow considerations near the approval date
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Quick-Reference Glossary
Adjusting event
A subsequent event providing evidence of conditions existing at the balance sheet date, requiring adjustment to the financial statements.
Approval date (承認日)
The date financial statements are approved for issue, marking the end of the subsequent events review period.
Financial statement key (Japan GAAP terminology)
BS Balance Sheet (貸借対照表)
P&L Statement of Income / Profit and Loss Statement (損益計算書)
Net Assets 純資産の部
SCNA Statement of Changes in Net Assets (株主資本等変動計算書)
SCF Statement of Cash Flows (キャッシュ・フロー計算書)