Japanese listed companies could begin
filing financial statements in accordance with IFRS for fiscal
years beginning as early as 1 April 2009 if a key endorsement for
Japan’s IFRS roadmap is accepted by Japan’s financial
This month the Business Accounting Council,
the key advisory body to the commissioner of Japan’s Financial
Services Agency (FSA), approved a roadmap for the adoption of IFRS
It proposes mandatory adoption of IFRS for
Japan’s listed companies from 2016, subject to a final decision
being taken by 2012.
Early adoption would be permitted for the
fiscal year that began on 1 April 2009.
If IFRS is adopted, the transition may be made
either by a ‘Big-Bang’ or phased-in approach based on the size of
The Business Accounting Council noted it is
important to ensure a sufficient preparation period of at least
three years before the mandatory use starts.
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The proposal outlined a series of issues to be
considered when deciding whether to adopt IFRS.
These included improved due process and
governance of the IFRS-setting process. Improvements should include
increased accountability to regulators and market participants, and
enhanced feedback to stakeholders regarding standard-setting.
The decision by the International Accounting
Standards Committee Foundation to establish a monitoring board was
lauded as a critical starting point for the enhanced
The foundation should continue to work towards
improved governance, with steps including upgrading the Standards
Advisory Council and securing a stable source of funds, the
International Accounting Standards Board
chairman David Tweedie said it was a landmark decision, both for
Japan and for IFRS.
The roadmap still requires the formal approval
of the FSA, which is expected to take place by the end of the