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IASB and ASBJ report on convergence

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  • IASB (International Accounting Standards Board) (blue) Image

11 Jun 2011

The IASB and the Accounting Standards Board of Japan (ASBJ) have announced their achievements under their August 2007 Memorandum of Understanding (MoU), known as the Tokyo Agreement, to improve International Financial Reporting Standards (IFRSs) and Japanese generally accepted accounting principles (GAAP) and to bring about their convergence.

The announcement results from a meeting between the IASB and ASBJ held in Tokyo on 6-7 June 2011.

Under the Tokyo Agreement, both boards agreed to seek to eliminate by 2008 major differences between Japanese GAAP and IFRSs, with the remaining differences to be removed on or before 30 June 2011. Whilst the target date of 2011 does not apply to any major new IFRSs now being developed that will become effective after 2011, both boards have agreed to work closely to ensure the acceptance of the international approach in Japan when the new standards become effective.

The report discusses the progress made by the IASB and ASBJ in both short-term and other convergence projects. The convergence of IFRS with Japanese GAAP is seen by both boards as an important step on the path towards Japan's possible adoption of IFRSs, with a decision on adoption likely in 2012. A full summary of the convergence report is available on our Japan country page.

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