While prior research has focused on the outcomes of transnationalisation, how standard setters strategically design implementation processes through domestic standard-setting activities in the face of institutional constraints has received less attention. This study aims to investigate Japan’s revenue recognition reform as a case of how global accounting standards are locally negotiated, adapted and institutionalised over time through interactions with national interests, traditions and regulatory politics.
The authors conduct a qualitative document analysis of the Accounting Standards Board of Japan (ASBJ) records and 152 public comment letters, focusing on two core policy themes: acceptance of IFRS 15 requirements and inclusion of optional treatments to address domestic implementation issues. Stakeholder positions and rhetorical strategies are examined over time.
The ASBJ strategically delayed its adoption timeline until the IASB/FASB project matured, allowing domestic discourse to develop in parallel. The prolonged process mitigated resistance, particularly among traditionalist preparers, and habituated them to conceptual changes. Furthermore, the ASBJ incorporated flexibility through optional treatments that reflected stakeholder concerns, despite adopting IFRS 15 almost verbatim. This layered approach was adopted to preserve elements of the prior system and facilitate smoother implementation.
Empirically, this case offers a rich process-oriented account of how global standards are domesticated through local negotiations. Moreover, it makes a theoretical contribution to the extant literature on institutional change by way of providing a detailed case of gradual transformation through layering.
