Standard Setters Discuss Convergence In Japan

by Robin Pilgrim, LawAndTax-News.com, London

06 May 2010

The International Accounting Standards Board (IASB) and the Accounting Standards Board of Japan (ASBJ) have held their eleventh meeting to review preparations for the convergence with and intended adoption of International Financial Reporting Standards (IFRS) in Japan. Led by Ikuo Nishikawa, Chairman of the ASBJ, and Sir David Tweedie, Chairman of the IASB, the meeting took place on April 27 and 28, 2010 in Tokyo.

The IASB and the ASBJ have accelerated their work towards convergence of IFRS and Japanese generally accepted accounting principles (GAAP) by June 2011, as described by their Memorandum of Understanding (known as the Tokyo Agreement) and consistent with requests by the Group of 20 Leaders to complete convergence of global accounting standards by this date.

In December 2009, the Japanese Financial Services Agency revised the ordinances to allow Japanese listed companies meeting certain criteria to prepare their consolidated financial statements in accordance with IFRS from fiscal years ended March 31, 2010.

In the light of that decision, the ASBJ is working with its constituents to address interpretative and practical issues relating to the voluntary adoption of IFRS in Japan.

At the meeting with the IASB, representatives of the ASBJ proposed its solutions on those issues and there was an exchange of views between the boards. With a view to promoting the voluntary adoption of IFRS in Japan, the boards reaffirmed that the IASB will continue to support the ASBJ’s efforts.

Representatives of both boards believe that the ASBJ’s continuing participation in the IASB’s standard-setting process, including the above discussions, contributes to the development of a single set of high quality global accounting standards. They also believe the IASB’s and the ASBJ’s ongoing work towards convergence of Japanese GAAP and IFRS is essential for the successful adoption of IFRS in Japan.

Commenting on the meeting, Tweedie said: "This was a highly successful meeting. The staff of the ASBJ produced some excellent papers that allowed significant progress to be made across projects covered by the ‘Tokyo Agreement’. We are on track to complete our convergence work by the June 2011 target."

Nishikawa added: "In this meeting, ASBJ’s comments were well received as they may contribute to the progress of the MoU projects between the IASB and the FASB. In addition, about local practical issues upon the implementation of IFRS, we are delighted that further communications between the staff were confirmed."

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