The ASBJ and the IASB announce Tokyo Agreement on achieving convergence of accounting standards by 2011
August 8, 2007
Accounting Standards Board of Japan
Ikuo Nishikawa, Chairman of the Accounting Standards Board of Japan (ASBJ), and Sir David Tweedie, Chairman of the International Accounting Standards Board (IASB), jointly announced today an agreement (known as the Tokyo Agreement) to accelerate convergence between Japanese GAAP and International Financial Reporting Standards (IFRSs), a process that was started in March 2005.
As part of the agreement the two boards will seek to eliminate by 2008 major differences between Japanese GAAP and IFRSs (as defined by the July 2005 CESR assessment of equivalence), with the remaining differences being removed on or before 30 June 2011. Whilst the target date of 2011 does not apply to any major new IFRSs now being developed that will become effective after 2011, both boards will work closely to ensure the acceptance of the international approach in Japan when new standards become effective (see the attached copy of the agreement).
Commenting on the agreement, Mr Ikuo Nishikawa said:
We have reaffirmed our commitment to convergence and are pleased to have an opportunity to increase the significant involvement of the ASBJ and Japan more generally in the international standard-setting process. It is expected that this agreement will enable Japanese companies to publish financial statements prepared under Japanese accounting standards without any remedies continuously in the EU and other capital markets using IFRSs.
Sir David Tweedie said:
We are delighted that the ASBJ, representing the interests of the second largest economy in the world, has agreed to accelerate convergence between Japanese GAAP and IFRSs and look forward to its active participation in shaping the future direction of international financial reporting standards.