31 January 2011
Sir David Tweedie
International Accounting Standards Board
30 Cannon StreetLondon EC4M 6XH
United Kingdom
Dear Sir David:

re: Comments in Response to Request for Views on“Effective Dates and Transition Methods”
The Corporate Accounting Committee (CAC) of the Securities Analysts Associationof Japan (SAAJ) is pleased to comment on the request for views on “Effective Dates andTransition Methods” put out by the International Accounting Standards Board (theBoard).

General Comments
The CAC highly appreciates the IASB’s thoughtful gesture in seeking public opinion
regarding effective dates and transition methods when a host of new innovative
accounting standards are to be implemented. The CAC thinks the following basic
thoughts are shared by most users; (a) new standards which improve on existing ones
should be implemented as soon as is practical, (b) the early adoption period should belimited to one year so as to secure comparability, (c) it is practical to adopt thesequential approach as some standards require longer preparation time, and (d) certain
consideration should be afforded first-time adopters.

Question 1 The entity responding to this Request for Views
The SAAJ is a not-for-profit organization providing investment education andexamination programs for securities analysts. Its certified members number 24,000.
The CAC is a standing committee of the SAAJ composed of 14 members, most of whom
are users including equity and credit analysts, and portfolio managers, while a few
others are academicians and public accountants. The CAC writes comment letters to
global standard setters including the International Accounting Standards Board (IASB)
and Accounting Standards Board of Japan (ASBJ), and exchanges opinions withorganizations including the ASBJ and the Financial Services Agency.

1Question 5(a) The Single Date Approach or the Sequential Approach
The CAC supports the sequential approach. Accounting standards proposed by theIASB will improve existing standards and good standards should be implemented assoon as is practical. The CAC recognizes that some standards require time consuming
preparations by preparers to change accounting systems and to accumulate data for
retrospective application. Therefore, the single date approach would inevitably delay
the effective date, which is inconsistent with our views that good standards beimplemented soon.
The single date approach has another problem, in which context Japaneseexperience has valuable suggestions. During the late 1990s and early 2000s, Japan
implemented a series of accounting standard improvements termed the ‘accounting bigbang’ which turned existing national standards into top-notch ones matching US GAAPand IAS. The big bang took the sequential approach through which users could
gradually familiarize themselves with the new standards. If the single date approach
had been taken, users and other stakeholders would have suffered from the burden oftrying to understand a host of new standards in a short period of time. Also, the incomestatement and balance sheet would have dramatically changed, making it difficult todetermine which new standard, among all the new ones, had caused what change. Some
preparers who experienced the big bang raise concerns about the single dateapproach––in particular, they point out that implementing a whole new set ofaccounting standards in itself is risky, and that some standards require changing
business procedures and customs. According to the preparers, to put all the required
business procedures and custom changes into effect at the same time would beextremely difficult.

Question 5(c) Sequence and Groups under the Sequential Approach
In taking the sequential approach, sequence and groupings are equally important.
The CAC thinks that the insurance project might require the longest preparation time
followed by the financial instruments (impairment) project. The CAC also thinks
consolidation and joint arrangement, which only relate to corporate structure, should beseparately implemented from other new standards. As a result, changes in the financial
statement stemming from them and changes from standards not related to corporate
structure would be clearer. Many other projects are mutually related, and should be
implemented together. Based upon the above discussion, following is the CAC’s
recommendation of sequential implementation:

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2012

Consolidation
Joint arrangement

2013

Fair value measurement
Financial instruments (classification and measurement, hedging)
Revenue from contracts with customers
LeasesPost employment benefits
Presentation of other comprehensive income items

2014

Financial instruments (impairment)

2015

Insurance

Even when some of the six projects which the CAC has proposed be implemented in2013 are divided, careful consideration should be given to consistent implementation ofmutually related projects. The CAC understands that consolidation and joint
arrangement standards are expected to be released in the first quarter of 2011. As
retrospective application is limited (consolidation) or not required (joint arrangement),
it is proposed they are implemented in 2012.

Question 6 Early Adoption
The CAC is basically against early adoption, as it makes inter-company comparisonsdifficult. However, when early adoption is permitted, early adopters present precedents
from whichaccountants accumulateexperience. This willmakemandatory

implementation much easier. Because of this possible social cost reduction effect, theCAC proposes permitting the early adoption of each standard by one year. However,when permitting early adoption, mutually related projects as mentioned above should
be adopted as a group and cherry picking not permitted.

Question 8 First-time Adopters
Notwithstanding the above proposal of early adoption, first-time adopters should bepermitted a longer early adoption period. For example, in our proposal, the early
adoption year for insurance is 2014 which is one year prior to mandatory adoption in
2015. For first-time adopters, 2012 or 2013 adoption should be permitted. Though thiswould cause a comparability problem, the CAC thinks a reduction in the burden to
first-time adopters should have priority. Here, again, cherry picking referred to in
Question 6 above should not be allowed for first-time adopters.

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If you have any questions or need further elaboration, please do not hesitate to contact
Sei-Ichi Kaneko, Executive Vice President, SAAJ (s-kaneko@saa.or.jp).
Sincerely yours,Keiko Kitamura
Chair
Corporate Accounting Committee

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