The International Accounting Standards Board (IASB) says it will support Japanese constituents and the Accounting Standards Board of Japan (ASBJ) in their work in addressing implementation issues once the Japanese generally accepted accounting principles (GAAP) and International Financial Reporting Standards (IFRSs) have been converged.
The convergence roadmap permits early adoption of IFRSs by listed companies for fiscal years beginning 1 April 2009 and proposes mandatory adoption of IFRSs from 2015 or 2016, with a final decision on the mandatory element being taken around 2012.
Representatives of both boards believe that the ASBJ’s and IASB’s ongoing work towards convergence between Japanese GAAP and IFRSs is essential for a successful adoption of IFRSs. The ASBJ’s continuing participation in the IASB’s standard-setting process will also contribute to the future development of high-quality accounting standards in the medium and long term.
During their meeting in London early this week, the representatives of the IASB provided an update on their ongoing project work, in particular on those projects that form part of the convergence programme between the IASB and the US Financial Accounting Standards Board (FASB) and on the measures that are being undertaken by the IASB in response to the financial crisis.
On the other hand, representatives of the ASBJ reported that good progress is being made towards convergence of IFRSs and Japanese GAAP. As outlined in the Tokyo Agreement these efforts extend to all projects on the IASB’s agenda. Representatives of the boards also exchanged views on the recent IASB exposure draft Financial Instruments: Classification and Measurement and the following important items, including cross-cutting issues among IASB projects.
• Other comprehensive income, and recycling/non-recycling: Cross-cutting issues among financial statement presentation, financial instruments (classification and measurement), and post-employment benefits
• Measurement of liabilities: Cross-cutting issues among financial liabilities and non-financial liabilities (IAS37) , including own credit risk
In addition, the representatives of the ASBJ provided an overview of the Interim Report Opinion on Application of International Financial Reporting Standards in Japan issued by the Business Accounting Council (BAC), an advisory body to the Commissioner of the Japan Financial Services Agency (FSA) in June this year.
Representatives of the boards also discussed how to address issues relating to the implementation of IFRSs in Japan. As a result of these discussions, the IASB expressed its willingness to support Japanese constituents and the ASBJ in their work in addressing implementation issues.
The next meeting of the boards is scheduled for early 2010 in Tokyo, Japan.