NEWS RELEASE 10/24/07
Financial Accounting Standards Board Meets with Accounting Standards Board of Japan to Discuss Global Convergence
Norwalk, CT, October 24, 2007—Representatives of the Financial Accounting Standards Board (FASB) and the Accounting Standards Board of Japan (ASBJ) recently gathered in Norwalk for a joint meeting. Led by Robert H. Herz, Chairman of the FASB, and Ikuo Nishikawa, Chairman of the ASBJ, the meeting was the fourth in a series of discussions between FASB and ASBJ designed to enhance dialogue between the two Boards in their shared pursuit of global convergence of accounting standards.
Convergence—the development of a common set of high-quality accounting standards for both domestic and international use—has been a major initiative of the FASB and ASBJ. Working in partnership with the International Accounting Standards Board (IASB), the organizations believe that common global financial reporting across the major business and capital markets of the world is a critical component in providing credible, comparable, conceptually sound, and usable financial information.
As part of the meeting, representatives of the FASB described recent developments related to their efforts with the IASB to achieve convergence between U.S. GAAP and International Financial Reporting Standards (IFRS) under the 2006 Memorandum of Understanding between the FASB and IASB. They also discussed recent releases by the U.S. SEC relating to removing the current reconciliation requirements for foreign filers that use IFRS and to the possible use of IFRS in the U.S. Representatives of the ASBJ described their strategies to pursue the commitment to converge with IFRS by eliminating major differences between Japanese GAAP and IFRS by 2008, with the remaining differences being removed on or before June 30, 2011, based on the “Agreement on Initiatives to Accelerate the Convergence of Accounting Standards” which was announced by the ASBJ and IASB on August 8, 2007.
In addition, representatives of both Boards exchanged their views on the current status of their work on the following projects:
- Conceptual Framework
- Revenue Recognition
- Liabilities and Equity
- Scope of Consolidation, including SPEs
Representatives of both Boards agreed that their ongoing discussions are useful in promoting mutual understanding that will contribute to subsequent deliberations at their respective Boards and to their respective convergence projects with the IASB. They agreed that both Boards would continue to exchange views on longer-term issues and current concerns.
Robert H. Herz, Chairman of the FASB, stated, “These semi-annual meetings continue to be a very important and fruitful way for both our organizations to discuss matters of mutual interest related to our respective convergence efforts.”
Ikuo Nishikawa, Chairman of the ASBJ, stated, “I believe that our closer communication with the FASB Board members and staff through regular meetings is greatly beneficial for ASBJ’s convergence work and would also contribute to accelerating global convergence.”
The next joint meeting is planned for May 2008 in Tokyo, Japan.
About the U.S. Financial Accounting Standards Board
Since 1973, the U.S. Financial Accounting Standards Board (FASB) has been the designated organization in the private sector for establishing standards of financial accounting and reporting in the United States. Those standards govern the preparation of financial reports and are officially recognized as authoritative by the Securities and Exchange Commission and the American Institute of Certified Public Accountants. Such standards are essential to the efficient functioning of the economy because investors, creditors, auditors, and others rely on credible, transparent, and comparable financial information. For more information about the FASB, visit its website atwww.fasb.org.
About the Accounting Standards Board of Japan
The Accounting Standards Board of Japan (ASBJ) was established in July 2001 as a private-sector organization. Accounting standards developed by the ASBJ are to be authorized by the Financial Services Agency as part of generally accepted accounting principles. The ASBJ develops accounting standards and implementation guidance that appropriately reflect the environment in which business enterprises operate. The ASBJ also communicates with corresponding organizations abroad and contributes to the development of global accounting standards. For more information about the ASBJ, visit its website at http://www.asb.or.jp/index_e.php.