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Japan's Business Accounting Council meets to resume discussions on IFRS

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26 Mar 2013

Japan’s Business Accounting Council (BAC) met on 26 March 2013 to resume its deliberations about the use of International Financial Reporting Standards (IFRSs) in Japan. The meeting was the first to address IFRSs since Japan’s December 2012 general election, with a renewed composition of the BAC (approximately 10 out of 30 council members have been changed). There was no consensus at the meeting, and the BAC is expected to continue deliberations at future meetings.

During the meeting, Financial Services Agency (FSA) officials discussed (1) recent IFRS adoption experiences in Canada and Korea, primarily on the basis of relevant reports by Canada’s Accounting Standards Board and by Korea’s Financial Supervisory Service and Accounting Standards Board; (2) the current state of the governance and strategy review of the IASB, including the finalised assessment approach of the IFRS Foundation’s Monitoring Board for determining its membership criteria; and (3) the recently formed Accounting Standards Advisory Forum (ASAF).

In addition, a BAC member from the Japan Business Federation (JBF) presented views of preparers on the use of IFRSs in Japan. Noting the increased number and importance of voluntary IFRS adopters in Japan, the presenter touched on additional measures that might be taken to further facilitate voluntary adoption of IFRSs in Japan, including lowering a regulatory hurdle for voluntary use of the standards. The presenter also highlighted the importance of a future BAC deliberation timeline, which would give preparers greater predictability. Finally, the presenter discussed a process for dealing with potentially unacceptable IFRS requirements and clarified that IFRSs as issued by the IASB should always be permitted for use regardless of such process.

During discussions after the presentation, FSAs officials acknowledged the difficulty in developing a timeline for BAC deliberations and stated that issues would be addressed that were identified in the July 2012 interim discussion paper. (See an earlier article on the interim discussion paper.).

Handouts for the meeting are available on the FSA’s Web site (Japanese only). The next meeting date has not yet been announced.

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