📖 Approx. 5 minutes ／ Updated May 5, 2026
1. Basics of Goodwill Amortization
According to the Medical Corporation Accounting Standards, amortization is over 5 years on a straight-line basis. This is also the case for tax purposes.
2. Goodwill Impairment Test
Impairment is assessed if there are signs of impairment due to post-acquisition business deterioration, decrease in patient numbers, etc.
3. Financial Closing with Related Companies
Consolidated financial statements (if part of a corporate group) and reports on related businesses.
4. Treatment of M&A Special Accounts
Includes acquisition-related expenses, deferred taxes, and settlement of retirement benefit obligations.
5. Public Notice of Financial Statements & Reporting to Authorities
The first financial closing after an M&A will have increased notes. Preparation of reporting documents for the authorities.
6. Management in Subsequent Periods
Goodwill amortization schedule, performance monitoring, and response to additional representations and warranties claims.
Start with a Free Consultation
For consultations regarding medical business succession and M&A, please contact M&A Medical, specialists in the medical industry. Please take the first step by contacting us through our contact form or our 60-second free preliminary assessment. We are an M&A support institution certified by the Small and Medium Enterprise Agency, operate on a success fee basis (no upfront fees), and offer services nationwide with strict confidentiality.
Key Takeaways of the Article
Post-M&A accounting treatment requires long-term follow-up, including 5-year straight-line amortization of goodwill, impairment testing, consolidated financial statements with related companies, treatment of acquisition-related expenses, and preparation of public notices and reports to authorities.
Latest Trends in the Medical M&A Industry
Since 2020, the number of succession M&A deals in Japan’s medical industry has rapidly increased. According to a survey by the Japan Medical Association, the average age of practitioners is over 60, with an estimated successor vacancy rate of about 40%. On the other hand, demand for succession by medical corporations and corporate groups is also expanding, leading to a record number of matching opportunities for both sellers and buyers.
- Demand for Clinic Succession: Over 1,000 M&A and business succession deals occur annually (estimated).
- Trend Towards Medical Corporationization: Increasing cases of succession after transitioning from individual practice to a medical corporation.
- Diversification of Potential Buyers: Medical corporation groups, businesses, independent physicians, and fund-related entities.
- Impact of Regulatory Changes: Revisions to the Medical Care Act, extension of the certified medical corporation system, and medical fee revisions affect succession strategies.
Considering these industry trends, early information gathering, consultation with experts, and timing are key to success.
Practical Checklist (For Tax Accountants & CPAs)
When supporting your clients’ medical M&A transactions, please systematically review the following items:
- ☑ Accuracy of financial statements and tax returns for the last 3 fiscal years
- ☑ Compliance with Medical Corporation Accounting Standards (for entities of a certain size)
- ☑ Comprehensiveness of reports on related businesses
- ☑ Appropriateness of executive compensation and status of pre-determined bonus payments
- ☑ Recording status of provisions for retirement benefits and bonuses
- ☑ Existence of off-balance sheet liabilities (unpaid overtime, social insurance non-enrollment, lawsuits)
- ☑ Valuation of equity stakes (net asset method, income capitalization method)
- ☑ Potential utilization of the certified medical corporation system
- ☑ Optimal allocation of capital gains, retirement income, and dividend income
- ☑ Schedule for reporting to the authorities
Actual Support Cases
Examples of business succession and M&A cases supported by M&A Medical (partial, details omitted due to confidentiality agreements):
- Case A: Urban Clinic: A clinic in a metropolitan area, with the director aged 70 and no successor, was transferred to a medical corporation group. All staff were retained, and patient care continued. The process from consultation to closing took approximately 8 months.
- Case B: Rural Clinic: The region’s only clinic was succeeded by a neighboring medical corporation, maintaining local medical services. This was achieved through collaboration with a returning physician.
- Case C: Strategic Acquisition: A physician planning a new practice acquired an existing clinic with a favorable location, established staff, and necessary licenses. Medical services commenced within six months, saving approximately two years compared to starting a new practice.
In each case, we aligned the desired conditions of both the seller and buyer, carefully addressing industry-specific issues such as continuity of medical care, licenses, and staff treatment.
Frequently Asked Questions (FAQ)
Q. How should I get involved when a client consults me about business succession?
The involvement of tax accountants and CPAs spans multiple phases, including tax scheme review, financial due diligence, and post-transfer income design. M&A Medical collaborates with you as a partner, supporting you in handling M&A-specific issues unique to the medical field (Medical Corporation Accounting Standards, equity valuation, related business reports, etc.) while maintaining your existing client relationship.
Q. What are the common points that tax accountants overlook in medical corporation M&A?
Specific points for medical corporations include: ① Reporting to the authorities due to changes in the composition of members and directors, ② Differences in tax treatment between medical corporations with and without equity stakes, ③ Potential utilization of the certified medical corporation system, ④ Comprehensiveness of related business reports, and ⑤ Compliance with Medical Corporation Accounting Standards. Proceeding with the same approach as general M&A can lead to significant oversights.
Q. What are the collaboration models with M&A Medical?
We can collaborate with you on a case-by-case basis or establish a continuous partnership. We work together to advance the transaction by dividing roles in each phase, such as tax scheme design for the seller, financial due diligence for the buyer, and post-transfer income design. Please contact us for details.
Related Articles and Services
Please also refer to the following articles in conjunction with this article:
- Complete Guide to Tax Schemes for Medical Corporation M&A
- Tax Practices for Equity Stake Transfers
- Utilizing the Certified Medical Corporation System
- Inheritance Tax Planning for Medical Corporations
Information on Free Consultations and Preliminary Assessments
For consultations regarding medical business succession and M&A, please feel free to contact M&A Medical, specialists in the medical industry. As an M&A support institution certified by the Small and Medium Enterprise Agency, we design M&A deals that create long-term value for both sellers and buyers.
- ✅ M&A Support Institution Certified by the Small and Medium Enterprise Agency
- ✅ Specialists in the Medical Industry – Nationwide Service
- ✅ Fully Success-Based Fee (No upfront fees, no monthly fees, no interim payments)
- ✅ Strict Confidentiality Assured with NDA
- ✅ Anonymous Consultations & Free Preliminary Assessments Available
Please take the first step by contacting us through our Contact Form or our 60-Second Free Preliminary Assessment.