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4 days ago
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Deloitte Tohmatsu to offer services for Japan lease accounting
Deloitte Tohmatsu Group has announced it will provide comprehensive services to support finance and accounting departments in adapting to new lease accounting standards set to take effect in Japan from April 2027. The services, centred at the Deloitte Tohmatsu Corporate as a Service Operate Center MAEBASHI, will combine accounting expertise with practical application and operational support to ensure compliance with the new regulations. The forthcoming Japanese lease accounting standards align with International Financial Reporting Standards, requiring lessee operating leases—previously often expensed—to be recognised as assets in most cases. This shift necessitates significant changes for companies, including managing lease contracts, collecting contract data, addressing accounting challenges, and updating business processes and internal controls, the company said. Firms will also need to review IT systems, assess impacts on business plans and budgets, adjust key performance indicators, and secure adequate human resources. To address these requirements, Deloitte Tohmatsu's service leverages AI-OCR technology to convert lease contracts into text data. Generative AI then extracts critical details, such as lease fees and contract periods, that impact accounting treatment. The extracted data is automatically linked to a lease calculation application, which computes right-of-use assets and lease liabilities and generates journal entries for accounting purposes. The company stated that this approach reduces the workload associated with manually processing large volumes of contracts, entering data into lease systems, and calculating accounting figures. The Deloitte Tohmatsu Corporate as a Service Operate Center MAEBASHI serves as a hub for addressing corporate department challenges. It draws on the group's expertise in accounting, risk management, and digital tools, as well as the experience of certified public accountants, tax accountants, and operational managers from shared service departments. The centre aims to provide integrated support for resolving issues, stabilising corporate functions, and transforming operations for Japanese companies nationwide. "Deloitte Tohmatsu to offer services for Japan lease accounting" was originally created and published by International Accounting Bulletin, a GlobalData owned brand. The information on this site has been included in good faith for general informational purposes only. It is not intended to amount to advice on which you should rely, and we give no representation, warranty or guarantee, whether express or implied as to its accuracy or completeness. You must obtain professional or specialist advice before taking, or refraining from, any action on the basis of the content on our site.
Japan Times
10-04-2025
- Automotive
- Japan Times
It makes iPhones. Now Hon Hai wants to make cars for Japanese automakers.
A Taiwan mobile phone manufacturer wants to produce electric vehicles for Japanese car companies, a seemingly unlikely proposition given the structure and history of Japan's auto industry. And it just might work for Hon Hai Precision Industry. EVs are different — they don't have engines, so it's much easier to manufacture them, allowing players not normally a part of the process to get a significant piece of the action. "It's not necessarily the case where only carmakers can manufacture EVs. Thus, I think a trend to outsource production to electronics manufacturing services companies that have a certain scale and can cut costs is possible," said Taiji Goishihara, a partner at Deloitte Tohmatsu. Japanese auto manufacturing has long relied on companies running their own plants and maintaining tight control over the process. Craftsmanship based on close coordination between carmakers and suppliers, especially with regard to engine-related systems, has also been considered essential. The industry is vital to Japan in terms of jobs, exports and contribution to gross domestic product, so its heft and scale is important for the country. Hon Hai — which does business as Foxconn and manufactures iPhones for Apple — is hoping to shake up that model a bit. The New Taipei City-headquartered company wants to build EVs for Japanese car makers on a contract basis as the economics of carmaking change and new opportunities present themselves. Some analysts said smaller carmakers and those struggling to raise funding to invest in EV production may find that it makes sense to rely on third-party manufacturers, although large automakers will likely stick to their tried-and-tested vertical integration manufacturing model. 'If you ask us whether Japan is special, we think Japan is special,' Jun Seki, chief strategy officer of Foxconn's EV business, said Wednesday at an event in Tokyo hosted by Hon Hai to explain its EV strategy in the country. He pointed out that the Taiwanese company and Japanese companies may be able to achieve synergies due to them being close geographically and culturally. Foxconn is already working with Mitsubishi Motors, according to Seki, a former Nissan executive. He declined to offer details about the partnership. Last month, some media reported that Foxconn will be producing EVs for Mitsubishi Motors for Oceania markets. For relatively small carmakers, including Mitsubishi Motors, outsourcing EV production may be a realistic decision, said Nobuhiro Shibata, a director at Deloitte Tohmatsu. "Benefits of outsourcing include hedging against risks related to in-house production, as EV demand is still volatile,' he noted. Also, smaller carmakers tend to focus on niche products to differentiate themselves from rivals, so if they want to pursue such a strategy, investing in research and development would be more of a priority rather than production, Shibata added. It is possible that even some of the larger carmakers will consider outsourcing production for certain regions, as producing vehicles locally is becoming key due to the escalating trade war driven by the U.S.' tariff policy, Goishihara said. He is skeptical as to whether outsourcing will be a mainstream production trend in Japan's auto industry in the near future. If the horizontal division of labor — where battery companies produce batteries and contract manufacturers handle assembly — accelerates, traditional carmakers would just become brand management companies, Goishihara noted. 'Therefore, I think they won't easily give it up,' he said. Two large EV companies — the U.S.' Tesla and China's BYD — have proven that their vertical integration manufacturing models work so far. A change in the production structure might trigger some issues for major Japanese automakers, including those related to employment. Toyota has repeatedly stressed the importance of maintaining annual domestic production of 3 million vehicles to protect its head count. Seki admitted that the auto industry is 'cautious' about Foxconn's move, so the Taiwanese maker is trying to win its trust. He said Foxconn does not intend to sell cars directly to consumers to compete with traditional carmakers. Its focus is only on the business-to-business segment. 'If we sell cars with our own brand to consumers, they will never trust us,' Seki said, referring to prospective automaker clients.
