Japan eyes overhauling treatment of goodwill to spur startup activity

Accounting rule change would eliminate key difference with practice overseas

Japanese companies amortize goodwill from an acquisition on a regular basis, which cuts into their reported profits. (Photo by Akira Kodaka)

HIROSHI ASAHINA

May 27, 2025 00:32 JST

TOKYO -- Japan is considering changes to accounting rules that would ease the burden associated with goodwill in acquisitions, as Tokyo aims to encourage the growth of startups.

A proposal to end the requirement for companies to regularly amortize goodwill generated when making an acquisition will be included in a report by a government advisory panel to be compiled as soon as this month.