The Nikkei Newspaper reported on 27 January 2014 that the Ministry of Economy, Trade and Industry (METI) will recommend in its forthcoming report in March that the Accounting Standards Board of Japan (ASBJ) amend its accounting standards to allow non-amortization of goodwill.
The existing Japanese GAAP requires entities to amortize goodwill over the years within 20 years. The balance of goodwill should be written down when certain impairment recognition criteria are met.
Occasionally, amortization of goodwill is criticized because Japanese companies are not able to complete in an equal playing field with competitors that use IFRS or US GAAP, which do not allow amortization of goodwill. For example, Takeda Chemical switched its accounting standards in use to IFRS, because it wants not to amortize its goodwill.
Currently, qualified Japanese companies are allowed to use IFRS. However, the switching to IFRS is not easy because of implementation cost. Moreover, reportedly, the endorsed IFRS, which may have certain modifications to IFRS as issued, would likely to require amortization of goodwill.