Keidanren wants IFRSs in Japan

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17 Oct 2008

Nippon Keidanren (the Japan Business Federation) has issued a Statement on the Future Directions of Accounting Standards in Japan in which they urge the adoption of IFRSs in Japan.

The Keidanren proposes that IFRSs be required in the consolidated financial statements of listed companies after a three-year phase-in period. Unlisted companies, and those listed companies that do not prepare consolidated financial statements, would be permitted to use IFRSs. The Keidanren statement points out that Japan is 'the only country among the major capital markets which has not officially announced the adoption of IFRS'.

Excerpt from Statement by the Keidanren – Proposal Towards Adopting IFRS:

A. Publish a Roadmap Including Adoption of IFRS Having had the U.S. announcement this year, Japan became the only country among the major capital markets, which has not officially announced the adoption of IFRS. Some of the Japanese companies have already begun the study of IFRS preparing for future adoption. Japan should accelerate the discussion of the future direction of accounting standards and set out a concrete Roadmap as soon as possible, indicating the adoption of IFRS. It is important to mention in the Roadmap the necessary conditions in adopting IFRS, such as, checking the direction of discussions of mid-long term projects at the IASB, adequate governance of the IASB, and progress in the ASBJ-IASB convergence project.

B. Scope of Application of IFRS For the near term, it is appropriate to permit the use of IFRS for listed companies as an option. In the future, because we think it is necessary to have a single set of accounting standards, for the purpose of securing reliability and convenience for the investors, Japan should require all listed companies to apply IFRS for preparing their financial statements. In that case, there should be, at least, three years of preparation period. It is also important make decisions taking into account to maintain and heighten Japan's international presence.

Click to view Statement on the Future Directions of Accounting Standards in Japan (PDF 23k)

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