The Business Accounting Council (BAC), a key advisory body to the Commissioner of the Financial Services Agency (FSA), published the "Interim Report: Application of International Financial Reporting Standards (IFRSs) in Japan" on June 30, 2009. Japan has now taken a key step forward toward IFRS adoption. To go further, there are some challenges to be overcome as noted in the report; many of which should be actively addressed by the private sector.
To tackle these challenges, today we announce our plan to establish the IFRS Council and its committees led by the private sector to promote IFRS implementation, agreed to by market constituents and supported by FSA.
The major objectives of the IFRS council and its committees are as follows;
- IFRS Council:The Council evaluates identified issues concerning implementation of IFRS and establishes policy and strategy to define our approach. Based upon the evaluation, the council requests each task force committee to decide upon specific measures and calls for relevant organizations to take action.
- Strategic Committee for IASB:Assuming Japan shifts to IFRS adoption in the near future, this committee deliberates upon how we can take strategic and specific action to become involved in the development of major accounting standards.
- Education and Training Committee:This committee promptly builds up and promotes an education and training system for IFRS, targeted mainly for accounting practitioners.
- Translation Committee:This committee establishes a system to prepare an appropriate Japanese translation of IFRS.
- Committee for Separate Financial Statements:This committee deliberates on how separate financial statements can be simplified given the current focus on consolidated financial statements.
- Public Relations Committee:This committee promotes PR activities to a wide range of stakeholders, including general investors, company executives, analysts, and the media, in cooperation with relevant organizations.
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ASBJ: Accounting Standards Board of Japan
FASF: Financial Accounting Standards Foundation
JBF: Japan Business Federation, Nippon Keidanren
JICPA: The Japanese Institute of Certified Public Accountants
Please refer to the appendix "Initiative for Promoting IFRS Implementation" for the objectives and members of the Council and each committee.
Commenting on the establishment of the IFRS Council, Toshitaka Hagiwara, chairman of the IFRS Council and the president of FASF, said:
"The rapid globalization in recent years has highlighted the need for a single set of high quality accounting standards, and consequently, has driven the world to accept IFRS as a global accounting standard. It was a valuable landmark decision when Japan clarified its stance toward IFRS implementation in this trend.
Considering we already have Japanese GAAP, a set of high quality accounting standards which converges well with IFRS, the transition to IFRS itself would not be a major problem. However, there would be various issues to be addressed and solved on the way to implement each IFRS, including how to disseminate IFRS on a practical level, how to proceed with training and education for IFRS, and how to manage Japanese translation of IFRS. We also need to encourage the International Accounting Standards Board (IASB), a standard setter of IFRS, to better take into account the views of Japan in the process of future standards development.
Most of such issues need to be actively addressed by the private sector. Tackling these challenges in an effective and efficient way requires cooperation and collaboration among key market constituents.
Receiving strong support from constituents, today we announce that the IFRS Council and its committees have been established. We are going to develop our activities toward mandated use of IFRS, targeted at 2015 at the earliest. I humbly request for your support and cooperation"
