The Accounting Standards Board of Japan (ASBJ) and the Financial Accounting Standards Board (FASB) last week met for the 10th time to discuss their shared pursuit of global convergence of accounting standards.
In November 2010, the FASB and the International Accounting Standards Board (IASB) issued a joint statement, Progress Report on Commitment to Convergence of Accounting Standards and a Single Set of High Quality Global Accounting Standards, which affirmed their priority projects. The Boards have been actively holding joint meetings with the aim of issuing final standards to improve and converge U.S. GAAP and International Financial Reporting Standards (IFRSs).
The decisions connected with the use of IFRSs are expected to be made during 2011 for the United States and in or around 2012 for Japan, according to the Roadmap for the Potential Use of Financial Statements Prepared in Accordance with International Financial Reporting Standards by U.S. Issuers and the Application of International Financial Reporting Standards (IFRS) in Japan (Interim Report).
With those forthcoming decisions in sight, both the ASBJ and the FASB are vigorously conducting their respective convergence programs with the IASB.
The ASBJ supports the efforts by the FASB and the IASB towards developing a single set of high-quality global accounting standards and is making progress with its projects to achieve convergence between Japanese GAAP and IFRSs, keeping pace with the progress of the joint projects by the FASB and the IASB.
At the meeting, taking into account these trends, the ASBJ and the FASB updated each other with the recent developments in their respective convergence projects with the IASB. Furthermore, the ASBJ and the FASB exchanged views on the following projects:
• Financial instruments (based on the credit impairment model for financial assets recently deliberated by the FASB and the IASB and the Exposure Draft on Hedge
Accounting issued by the IASB in December 2010)
• Revenue recognition (based on the FASB and the IASB’s recent redeliberations with respect to the Exposure Draft on Revenue Recognition)
• Leases (based on the FASB and the IASB’s recent redeliberations with respect to the Exposure Draft on Leases)
The ASBJ and the FASB also exchanged views on issues related to reflecting the current interest rate in the measurement of liabilities, as a cross-cutting issue. Representatives of the ASBJ and the FASB agreed that their ongoing discussions are useful in promoting mutual understanding that will contribute to subsequent deliberations at each Board and to the future development of high-quality accounting standards on the significant items to be improved in the medium and long term with the IASB. The ASBJ and the FASB agreed that they would continue to exchange views on issues faced and current concerns.
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