IFRSs in Japan
The IASB and the Accounting Standards Board of Japan (ASBJ) have been working together to achieve convergence of IFRSs and Japanese Generally Accepted Accounting Principles (GAAP) since 2005. This work was formalised in 2007 with the Tokyo Agreement. In December 2009 the Japanese Financial Services Agency (FSA) permitted certain qualifying domestic companies to apply IFRSs for fiscal years starting ending on or after 31 March 2010.
Co-operation between the IASB and the ASBJ
The Tokyo Agreement set 2008 as a target date for eliminating major differences between IFRSs and Japanese GAAP (as defined by the July 2005 CESR assessment of equivalence) with the objective of eliminating the remaining differences by 30 June 2011. Having achieved the 2008 target date, the boards are continuing their regular meetings and are now working to address the outstanding issues by 2011.
Adoption of IFRSs in Japan
In June 2009 the Business Accounting Council (BAC), a key advisory body to the Commissioner of the Financial Services Agency (FSA), approved an interim report - Application of International Financial Reporting Standards (IFRSs) in Japan (Interim Report). In the interim report the BAC proposes to allow certain listed companies an early adoption of IFRS followed by a final decision about the mandatory adoption of IFRSs around 2012. The interim report also recommends that the ASBJ continues and accelerates the convergence of accounting standards.
In accordance with the interim report, the Japanese FSA amended in December 2009 its regulations permitting certain qualifying domestic companies to apply IFRSs from fiscal years ending on or after 31 March 2010.