Japan will allow some companies to use IFRSs
02 Dec 2009
As we Reported in June 2009, on 30 June 2009, the Business Accounting Council (advisory body to the Financial Services Authority of Japan (FSA)) approved its Opinion on the Application of International Financial Reporting Standards (IFRS) in Japan (Interim Report).
The FSA published an English translation of the 'Interim Report' on the FSA's Website. At the same time, the FSA published on their website for comment, only in Japanese, 13 Related Documents including Proposed Ordinances that would have to be adopted to implement the 'Interim Report'. Yesterday, the FSA announced that they will release the final IFRS Ordinances on 11 December 2009. Those Ordinances will be effective immediately on release. Click here for yesterday's Announcement and Near-final Draft Ordinances on the FSA's website in Japanese only. Among other things, the Ordinances would allow certain Japanese public companies voluntarily to start using IFRS in their consolidated financial statements starting from the fiscal year ending 31 March 2010. As a result of comments received on the proposed Ordinances, the FSA has significantly reduced the parallel reporting requirements for those companies voluntarily electing early use of IFRSs. Japan intends to consider, around 2012, whether to make IFRSs mandatory for all public companies starting around 2015 or 2016.
To be eligible to voluntarily start using IFRSs in 2010, domestic Japanese companies should meet both of (1) and (2) below:
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