IASB Meets with Auditing Standards Board of Japan
CPA Letter | May 1, 2008
The Accounting Standards Board of Japan (ASBJ) and the International Accounting Standards Board (IASB) held their second meeting in Tokyo since the announcement of the initiative to accelerate convergence between Japanese generally accepted accounting principles and International Financial Reporting Standards (IFRS), known as the “Tokyo Agreement,” in August. This was the seventh meeting between the two boards.
At the beginning of this meeting, representatives of the ASBJ explained the progress of the items listed in its project plan issued in December based on the Tokyo Agreement. The boards confirmed that the convergence project to eliminate major differences between Japanese GAAP and current IFRS (as defined by the July 2005 CESR assessment of equivalence) by the end of 2008 is progressing in line with the project plan.
In addition, IASB representatives explained the progress of the projects, including medium and long-term items. The representatives of the boards exchanged views on the following items, which are included in the significant items to be improved in the medium and long term, deepening their mutual understanding of the technical issues associated with those items.
- Consolidation
- Revenue recognition
- Insurance contracts: interaction with other projects
- Liability and equity
- Financial statement presentation
Representatives of the boards also exchanged views on the recent international credit crisis. “We are pleased that we and the IASB share the understanding of steady progress of the project in line with our project plans,” said Ikuo Nishikawa, chairman of the ASBJ. “Continuing the good progress to be jointly made through future meetings and with close cooperation of staff from both boards, we will continue to make progress on the convergence further in the future. In addition, we will address the issues to ensure credibility and transparency of international financial and capital markets in cooperation with the interested parties, including the IASB.”
“The globalization of the world’s capital markets is accelerating year by year,” noted Sir David Tweedie, chairman of the IASB. “As a consequence, IFRS are increasingly being accepted worldwide. A total of 109 countries now use international standards. Following the signing of the Tokyo Agreement, we are delighted to return to Tokyo to have further in-depth discussions with our colleagues at the ASBJ. These discussions covered the key projects we hope to complete before mid-2011 and the manner in which Japan will converge its standards with IFRS.” The next joint meeting is scheduled for September in London.
