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IFRSs in Japan? Japanese GAAP continue in EU?

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19 Jun 2004

The Japanese press is reporting that the Financial Services Authority (Japan's securities regulator) will recommend that foreign companies listed in Japan be allowed to submit IFRS financial statements, rather than Japanese GAAP statements, if they already report under IFRSs in their home country.

An explanation of the differences between results under IFRS and under Japanese GAAP would be required. Currently, around 30 foreign companies are listed on the Tokyo Stock Exchange, but only about 10 of those are from countries that require IFRSs. Most of the others are US and Canadian companies that do not prepare IFRS financial statements. Several news stories have also reported that the European Union may extend to 2007 the deadline for Japanese companies listed in Europe to switch to IFRSs. Around 250 Japanese companies list their shares or bonds on EU exchanges. Most prepare their financial statements under Japanese accounting rules. The Japanese government has already asked governments in Europe to allow these companies to continue to use Japanese GAAP indefinitely.

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