The Financial Accounting Standards Foundation (FASF) was established in Japan in 2001. Under the auspices of the FASF, the Accounting Standards Board of Japan (ASBJ) was formed as a private-sector independent institution responsible for developing accounting standards in Japan. The ASBJ has issued many accounting standards, implementation guidance, discussion papers and other documents addressing issues in accounting practices.
2.Convergence with IFRS
In January 2005, ASBJ announced the launch of a joint project with the International Accounting Standards Board (IASB) aimed at achieving convergence between Japanese GAAP and International Financial Reporting Standards (IFRSs).
With relate to achieving convergence with IFRSs, in October 2006, the ASBJ released "ASBJ Project Plan" that focused on the projects to develop accounting standards in an attempt to show its initiatives and commitment to various constituencies in Japan and abroad.
In August 2007, the ASBJ and the IASB jointly announced the agreement (known as the “Tokyo Agreement”) to accelerate convergence between Japanese GAAP and IFRSs. As a part of the agreement, the two boards were going to seek to eliminate, by 2008, major differences between Japanese GAAP and IFRSs, with the remaining differences being removed on or before 30 June 2011. Whilst the target date of 2011 did not apply to any major new IFRSs being developed that would become effective after 2011, both boards were going to work closely to ensure the acceptance of the international approach in Japan when new standards become effective.
As for the EU equivalence assessment, in March 2008, the Committee of European Securities Regulators (CESR) *1 announced that Japanese GAAP was considered to be equivalent to IFRSs provided that the progress of convergence was to be made as scheduled in the Tokyo Agreement. Thereafter, in December 2008, European Commission (EC) also reached the conclusion that Japanese GAAP was found to be equivalent to IFRSs adopted by the EU. Consequently, those conclusions by CESR and EC made it possible for Japanese companies to continue to be listed in European capital markets after 2009, by using the financial statements based on Japanese GAAP.
In June 2011, the IASB and the ASBJ jointly announced their achievements under the Tokyo Agreement and their plans for closer cooperation. The announcement referred to the progress made by the IASB and ASBJ in short-term projects and other convergence projects. Both boards also expressed their intention to continue their close relationship to seek further convergence between IFRSs and Japanese GAAP.
*1 From January 1, 2011 CESR activities were continued by the European Securities and Markets Authority (ESMA).
3.The JICPA’s contribution
The JICPA has contributed to the development of high-quality accounting standards by providing comments and inputs to the exposure drafts and other documents issued by both the ASBJ and IASB. The JICPA continues to implement various measures to provide more training and development opportunities for members so that the members will become well prepared for the IFRS implementation.