After discussing the two last topics out of 11 specific aspects identified in the BAC paper of August 2011 (i.e. voluntary early adoption , and the impact on the regulatory environment), the BAC proceeded to discuss a draft interim discussion paper that is to summarise discussions at the BAC over the past year.

Topics discussed included:

• Voluntary early adoption: One of the Japanese companies that early adopted full IFRS presented 1) its objectives of IFRS adoption, 2) activities conducted toward adoption, 3) impact on financial statements (major differences from Japanese GAAP), and 4) future agenda. Related questions were asked and answered, and views were expressed by members of the BAC.
• Impact on regulatory environment: The BAC discussed the impact of IFRS on financial reporting by regulated industries as well as regulation over public bidding/government procurement and pricing. The discussions in foreign countries were also reviewed.
• Draft interim discussion paper:  The 13-page draft paper was presented for discussion. The paper admits that 1) there are divergent views on a few issues, 2) no final conclusion has been made, both of which would require further deliberation to deepen discussions. In addition, the paper summarises the major points of past discussions at the BAC as follows:
  • The effort toward international harmonisation of accounting standards should be continued
  • In doing the above, the best approach of using IFRS is to be developed based upon the following, by sufficiently considering its objective and impact on the economy and systems in Japan:
    • It should be permitted that accounting standards used for consolidated financial statements could be different from Japanese GAAP used in separate financial statements that are more closely linked to company laws and taxes
    • IFRSs should not impact accounting by non-public small-medium sized entities
    • Positive measures are to be taken for convergence to ensure Japanese GAAP is of high quality and internationally recognised
    • Voluntary early adopters of full IFRS is to be accumulated further
  • It is important to contribute to development of IFRSs and to communicate Japan's view as appropriate.

Members responded to the draft paper with divergent views. The Chair of the BAC intends to collect further views from BAC members off-line in deciding whether to hold a live meeting to finalise the paper.

The handouts for the meeting including the draft interim discussion paper (in Japanese only) are available on the FSA website.

The next session is yet to be scheduled.