Issued May 17, 2011 (No. 20)

Contents

1. New ASBJ Pronouncements (released between February 1 and March 31,
2011)
2. Overview of ASBJ Meetings (218th Meeting – 221th Meeting)
3. ASBJ’s Comments on the Documents Issued by the IASB and FASB
(February 1, 2011 – March 31, 2011)
4. IFRS Foundation appointed Mr. Takatsugu Ochi as IASB Board Member
5. ASBJ Vice-Chairman Atsu Kato Attended the 11th Meeting of National
Standard-Setters (NSS)
6. KASB Chairman Chung Woo Suh Visited Japan and Met ASBJ Chairman
Ikuo Nishikawa
7. ASBJ Chairman Ikuo Nishikawa Participated as a Speaker in IFRS
Conference in Taiwan
8. Tomokazu Sekiguchi (ASBJ Technical Manager) Received Accountant
Encouragement Award of the 2011 Integrity Awards
9. ASBJ Held its 10th-12th Sessions of a Series of Open Seminar
10. FASF Seminar on the “Guide to the Preparation of Securities Reports” (forthe fiscal year ending March 31, 2011)
11. ASBJ Vice-Chairman Takehiro Arai Participated as a Speaker in a
Seminar hosted by Kansai Economic Federation
12. ASBJ/FASF Holds Meeting with Chubu Economic Federation to Exchange
Views
13. Project Progress as of March 31, 2011 (based on Project Plan updated in
December 17, 2010)
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1. New ASBJ Pronouncements (released between February 1 and March 31,
2011)(1) [DP] Release of Issue Paper on improvements of Accounting Standard for Financial Instruments(Classification and Measurement of Financial Liabilities) (February 25, 2011)(The issue paper is open for comment until April 25, 2011.)(2) [Final] Release of the revised PITF No.5 Practical Solution on Tentative Treatment of Tax EffectAccounting Under Consolidated Taxation System (Part 1) (March 18, 2011)(3) [Final] Release of the revised ASBJ Statement No. 22 Accounting Standard for Consolidated
Financial Statements and related Implementation Guidance and Practical Solution (March 25,2011)(4) [Final] Release of the revised ASBJ Statement No.12 Accounting Standard for Quarterly
Financial Reporting, the revised ASBJ Guidance No.14 Guidance on Accounting Standard for
Quarterly Financial Reporting and related Standard and Implementation Guidance (March 25,
2011)[Legend]
DP: Issue Paper, Discussion Paper
ED: Exposure Draft
Final: Statement/Guidance etc. (final version)

2. Overview of ASBJ Meetings (218th Meeting – 221th Meeting)(1) 218th Meeting (held on February 3, 2011)
a. Exposure Draft of Proposed Amendments to Practical Solution on Tentative Treatment of Tax
Effect Accounting Under Consolidated Taxation System (Part 1) [Approval for issue]b. Progress of the Technical Committee for Financial Instruments (Financial Liabilities)
c. Discussion on Accounting Standard for Subsequent Eventsd. Discussion on Intangible Assets
e. Progress of the Technical Committee for Business Combinations
f. Progress of the Technical Committee for Financial Instruments (Hedge Accounting)g. Discussion on the amendments to Accounting Standard for Quarterly Financial Statements
a. The Board voted to approve to release the exposure draft on the amendments to Practical Solution
under Consolidated Taxation System. The Practical Solution was revised in June 2010 to reflect theconsolidated taxation system revised by the tax reform in 2010. The proposed amendment of thistime is addition and clarification of some practical treatments.

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b. The Board discussed the text of the forthcoming issue paper, in advance of the vote for issuance atthe next meeting.
c. The Board discussed accounting standard for subsequent events. Considering the difference
between the date of authorization for issue under the Companies Act and that under the Financial
Instruments and Exchange Act, the Board discussed how financial statements under the Financial
Instruments and Exchange Act should treat events that occurred after a certain cut-off date specified
for financial statements under the Company Act. One alternative would be to require adjustments tofinancial statement, and the other would be to treat them similarly to non-adjusting subsequent
events (ie requiring disclosure only). Both alternatives have respective advantages anddisadvantages, and no consensus has yet reached about which to select.
d. The Board discussed what items should be disclosed and how intangible assets not yet available foruse should be tested for impairment.
e. The Board discussed issues such as effects on presentation of comprehensive income, treatment of
the full goodwill method, and treatment of reverse acquisitions.
f. The Board discussed how to comment on IASB’s Exposure Draft on Hedge Accounting.
g. Outline of the comments received on the exposure draft was presented. Many of the comments by
preparers supported the proposal because it would reduce their burdens in practice.

(2) 219th Meeting (held on February 17, 2011)
a. Issue Paper on improvements of Accounting Standard for Financial Instruments (Classificationand Measurement of Financial Liabilities) [Approval for issue]
b. Discussion on the amendments to Accounting Standard for Quarterly Financial Statements
c. Discussion on Accounting Standard for Subsequent Eventsa.

The Board approved to release the Issue Paper on classification and measurement of financial
liabilities. The Issue Paper is based on IFRS 9, and proposes to measure financial liabilities after
initial recognition at amortized cost, in principle. However, it proposes to measure financial
liabilities held for trading and derivatives at fair value through profit or loss. In addition, the paper
considers permitting so-called ‘fair value option’ under situations where certain conditions are met.
On the issue of recycling of the amount recognized in other comprehensive income, the paper
presents both alternatives of prohibiting and requiring recycling and seeks comments.

b.

The Board discussed how to address the comments received on the exposure draft.

In responseto the comments, the Board decided to address the issues of whether to require periodical
consistency in omission of disclosures and addition of voluntary disclosures.
c.

The Board continued discussion about how financial statements under the Financial Instruments
and Exchange Act should treat events that occurred after a certain cut-off date specified for
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financial statements under the Company Act. Many of preparers object to requiring adjustments tofinancial statements for such subsequent events, because they have concern that addressing thisissue, which is neither an identified difference from IFRSs nor an item of MoU between IASB and
FASB, might cause adverse effects and confusions in practice.

(3) 220th Meeting (held on March 3, 2011)a. Discussion on the amendments to Accounting Standard for Quarterly Financial Statements
b. Presentation of the comments received Exposure Draft of Proposed Amendments to Practical
Solution on Tentative Treatment of Tax Effect Accounting Under Consolidated Taxation System(Part 1)c. Discussion on Accounting Standard for Subsequent Eventsd. Progress of the Technical Committee for Financial Instruments (Discussion on IASB Hedge
Accounting)e. Progress of the Technical Committee for Financial Instruments (Discussion on IASB
Impairment)a. The Board continued discussion about the issues of whether to require consistency in omission of
disclosures and addition of voluntary disclosures, within a year and across years. The direction of
the discussion was that consistency of disclosures within a year should be required as before andconsistency across years should not be required, leaving to judgment of each entity. In addition, theBoard discussed whether comparative disclosure for the previous year should be allowed when that
disclosure was not provided in the previous year but newly provided in the current year.
b. Outline of the comments received on the exposure draft was presented and the Board discussed
how to address those comments.
c. Several Board members suggested that deliberation about a standard on subsequent events should
be made with caution, considering impacts on practice. In response to the suggestion, the staff
reported that this topic will be addressed with more careful consideration.
d. The Board discussed how to comment on the IASB’s exposure draft on hedging accounting.
e. The staff provided an overview of the supplementary document issued by the IASB and FASB on
January 31 2011, which is the supplement to the exposure draft Financial Instruments: Amortized
Cost and Impairment issued in November 2009.

(4) 221st Meeting (held on March 17, 2011)
a. Revised Accounting Standard for Quarterly Financial Reporting and related Standard and
Implementation Guidance [Approval for public release]b. Revised Accounting Standard for Consolidated Financial Statements and related Implementationpg. 4
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Guidance and Practical Solution [Approval for public release]c. Revised Practical Solution on Tentative Treatment of Tax Effect Accounting Under Consolidated
Taxation System (Part 1) [Approval for public release]d. Progress of the Technical Committee for Financial Instruments (Discussion on IASB
Impairment)a. The Board approved to issue the revision to Accounting Standard for Quarterly Financial Reporting,which significantly simplifies quarterly reporting. No major changes to the exposure draft weremade in the final standard. The revised standard permits omission of statements of cash flows forthe first and the third quarter, on condition that certain disclosures are provided. And it requires
quarterly income statement and comprehensive income statements to be presented on the
cumulative year-to-date basis, with voluntary disclosure on the three month period basis permitted.
In addition, a number of notes disclosures has been simplified or eliminated.
b. The Board approved to issue the revision that the ‘special treatment for special purpose entities’
should be applied only to transferors of assets. The revised standard will become effective for the
consolidated fiscal years beginning on or after April 1, 2013.
c. The Board approved to issue the revision to Practical Solution on Tentative Treatment of Tax EffectAccounting under Consolidated Taxation System, in which some practical treatments are added andclarified.
d. The Board discussed how to comment on IASB’s Supplementary Documents to Financial
Instruments: Impairment.

3. ASBJ’s Comments on the Documents Issued by the IASB and FASB
(February 1, 2011 – March 31, 2011)(1)

ASBJ submitted its Comments on the IASB Exposure Draft "Financial Instruments: Hedge
Accounting" (March 9, 2011)

4. IFRS Foundation appointed Mr. Takatsugu Ochi as IASB Board Member
On February 25, 2011, the Trustees of the International Financial Reporting Standards (IFRS)Foundation, the oversight body of the International Accounting Standards Board (IASB), announced
the appointment of Takatsugu Ochi as a member of the IASB.

His initial term begins from July 1,

2011, for five years, and the term is renewable once for three years.
Mr. Ochi is currently Assistant General Manager, Financial Resources Management Group of
Sumitomo Corporation, a member of the IFRS Interpretations Committee, Secretary-General of the
Nippon Keidanren (Japan Business Federation) Taskforce for early adoption of IFRS, and an adviser
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to the Accounting Standards Board of Japan (ASBJ). He will relinquish the existing roles uponjoining the IASB.

5. ASBJ Vice-Chairman Atsushi Kato Attended the 11th Meeting of National
Standard-Setters (NSS)The 11th National Standard-Setters (NSS) Meeting was held on March 24-25, 2011, in New York.
The meeting was hosted by the US Financial Accounting Standard Board (FASB), and attended by
62 representatives of 26 national accounting standard-setters, including those of the United Kingdom,
Canada, France, Germany, Italy, Spain, Australia, Korea, India, Malaysia and South Africa, as wellas international organizations such as the European Financial Reporting Advisory Group (EFRAG)
and the International Public Sector Accounting Standards Board (IPSASB). The attendants from the
ASBJ were Atsushi Kato (Vice Chairman) and Toru Yoshioka (Technical Staff).
The purpose of the meeting was to discuss technical projects undertaken by national standard settersand to provide input into, and support for, the IASB’s standards development. The following topics
were discussed at the meeting:
AgendaSpeakerMarch 24, Thursday
1

IASB Work Plan

Canada2

IAS 41: Agriculture

Malaysia

3

Business Model in Financial Reporting

EFRAG

4

Post-implementation Review

IASB

5

Disclosure Framework

EFRAG

6

Alternative Approach for Disclosure and Presentation

Australia (AASB)March 25, Friday
7

Topical issues in member countries

Member countries

8

Transactions under Common Control

EFRAG

9

Reports from regional groups (AOSSG, EFRAG)ASBJ/AASB, EFRAG

10

Qualitative Characteristics in Standard Setting

AASB

11

Operation of NSS Group

Chairmanpg. 6
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6. KASB Chairman Chung Woo Suh Visited Japan and Met ASBJ Chairman Ikuo
Nishikawa

On February 15 and 16, 2011, Chairman Chung Woo Suh of the Korea Accounting Standards Board(KASB), an accounting standard setter in Korea, visited Japan. Chairman Suh met board members
and staff members of the Accounting Standard Boards of Japan (ASBJ) and other Japaneseconstituents, to exchange views on the IFRS, citing experiences of mandatory IFRS application in
Korea for listed companies from 2011. During his visit, Chairman Suh had a talk with ASBJ
Chairman Ikuo Nishikawa, referring to the background and current progress of IFRS implementationin Korea as well as the concerns about IFRS technical issues.

7. ASBJ Chairman Ikuo Nishikawa Participated as a Speaker in IFRS
Conference in Taiwan
On February 23, 2011, “2011 IFRS Conference in Taiwan” was held in Taipei. The conference washosted by the Accounting Research and Development Foundation (ARDF), the governing body ofFinancial Accounting Standards Committee (FASC), the accounting standard setter in Taiwan. The
conference was attended by over 160 market constituents, including preparers of financial statements
and auditors in Taiwan. From Japan, Noriaki Shimazaki, IFRS Foundation Trustee, and Ikuo
Nishikawa, ASBJ Chairman, attended the conference and made keynote speeches, along with
Conrad C. Chang, the chairman of FASC.

In their keynote speeches, Mr. Shimazaki provided an update on activities of IFRS Foundation andefforts in Japan toward application of IFRSs, and Chairman Nishikawa presented the ASBJ’s efforts
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to converge Japanese GAAP with IFRSs and its activities toward application of IFRSs.

Following the conference, Chairman Nishikawa and Mr. Shimazaki exchanged views with FASC
Chairman Chang, accountants from big four accounting firms in Taiwan working with Japaneseclients, and accounting academics, on the issues relating to IFRSs implementation in Taiwan,
including that by Japanese-owned companies.
On the next day, Chairman Nishikawa and Mr. Shimazaki visited the Taiwan Financial Supervisory
Commission (FSC), a financial regulatory authority (equivalent to the Financial Services Agency inJapan), and the National Federation of CPA Associations of the Chinese Taiwan, to exchange views,
mainly focusing on various IFRSs implantation issues in Japan and in Taiwan.

8. Tomokazu Sekiguchi (ASBJ Technical Manager) Received Accountant
Encouragement Award of the 2011 Integrity Awards
Tomokazu Sekiguchi, ASBJ Technical Manager, was awarded “Accountant Encouragement Award2011” by the Integrity Awards Council.
The Integrity Award is intended to demonstrate the importance of internal control systems inensuring efficient business management and support compliance-conscious companies, appreciatingthat compliance-minded management with high integrity and transparency will have high market
competitiveness from the medium and long term viewpoint.
In the light of high expectations for accounting professionals in the economic society of the 21st
century and their ever-increasing responsibility to fulfill, the “Accountant Encouragement Award” asa branch of the Integrity Award is annually granted to honor (1) those who are actively engaged inaccounting profession and making contributions toward further development of the Japanese
accounting community, and (2) those who have contributed to publicity of accounting and audit
related services.

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Other 2011 Integrity Awards recipients are as below:


Accountant Encouragement Award 2011Atsumu Hayashi (Certified Public Accountant, Professor of LEC Accounting School)

Integrity Award 2011


Outstanding Achievement:

Komatsu Ltd.
Superior Performance:

Sekisui House, Ltd.
Teijin Limited

9. ASBJ Held its 10th-12th Sessions of a Series of Open Seminar
The ASBJ and FASF, starting this year, host the ASBJ Open Seminars on “Development of IFRS
and its Adoption in Japan” in major cities throughout Japan. The objectives of the seminars are toprovide up-to-date information about global trends in accounting, which can be presented only by
the ASBJ, who is able to timely follow the trends, and thereby contribute to improvements ofenvironment for successful IFRS adoption as well as to improve services to the members of the
FASF.
The latest seminars were held in Osaka (at Osaka Bankers Associations) on February 18, 2011, in
Nagoya (at Design Hall) on February 25, 2011, and in Tokyo (at Yomouri Hall) on March 4, 2011.
The topics covered: the IASB’s development of standards and related ASBJ activities, the IASB
project on financial instruments, and the ASBJ exposure draft on amendments to AccountingStandard for Quarterly Financial Statements (issued in December 2010), accompanied by apresentation on recent trends in corporate disclosure policy by the Financial Services Agency. The
seminars were attended by more than 1300 people (the total number of the attendance for threelocations).
The seminar program in Tokyo is shown as below:
The 12th Seminar in Tokyo (Yomiuri Hall) on March 4, 2011

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TitleSpeaker

Message from the FASF

Hideo Takahashi, FASF Secretary General

Recent trends in corporate disclosure policy

Tomoyuki Furusawa, Director of Corporate
Accounting and Disclosure Division of
Financial Services Agency.

Proposed amendments to Accounting Standard

Takehiro Arai, ASBJ Vice Chairman

for Quarterly Financial Statements
IASB’s development of standards and related

Ikuo Nishikawa, ASBJ Chairman

ASBJ activities
IASB project on financial instruments

Atsushi Kato, ASBJ Vice Chairman

10. FASF Seminar on the “Guide to the Preparation of Securities Reports” (forthe fiscal year ending March 31, 2011)
The FASF seminars on the “Guide to the Preparation of Securities Reports” (for the fiscal year
ending March 31, 2011) were held, starting on April 5, 2011, in 8 cities for 10 sessions: Tokyo (3sessions), Osaka, Nagoya, Fukuoka, Sapporo, Kanazawa, Hiroshima, and Takamatsu. The seminar
was accompanied by a presentation on “Recent Trends in Disclosure Systems ets” by the Corporate
Accounting and Disclosure Division, Planning and Coordination Bureau, of the Financial Services
Agency.
Judging from the total number of seminar participants (approximately 4,000 participants), and thehigh level of interest displayed by the participants, the seminar was a resounding success.

11. ASBJ Vice-Chairman Takehiro Arai Participated as a Speaker in a Seminar
hosted by Kansai Economic Federation
On March 24, 2011, Takehiro Arai, ASBJ Vice Chairman, as a speaker attended a seminar hosted by
Kansai Economic Federation for member companies of the Federation.
At the seminar, Vice Chairman Arai presented the latest development, mainly focusing on theoverviews of the amendment to Accounting Standard for Quarterly Financial Reporting.

12. ASBJ/FASF Holds Meeting with Chubu Economic Federation to Exchange
Views
The ASBJ and FASF hold a series of meetings for exchange of views to enhance communication
with FASF member companies and accounting professionals who locate in the areas distant from
Tokyo.
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Those meetings aim for direct communications with constituents, to hear their requests as well as toprovide them with the latest information, which might be difficult to fully understand from only the
ASBJ website, newspapers and magazines. Such information includes the IASB’s latest
development and its background, and the details and prospects of ASBJ’s standard developments.
We consider such activities meaningful in enhancing the understanding of the ASBJ’s role indeveloping Japanese accounting standards and in supporting the preparation for implementation of
IFRSs.
The latest meetings (exchange of views/seminar) with Chubu Economic Federation took place in
Nagoya on February 25, 2011.
FASF Secretary General Hideo Takahashi opened the meetings, expressing his gratitude forcontinuous supports to the FASF. Then, ASBJ Vice Chairman Takehiro Arai discussed (1) the
IASB’s development of standards, (2) ASBJ’s Project Plan, (3) ASBJ’s new document (proposed
amendments to Accounting Standard for Quarterly Financial Reporting), (4) ASBJ’s international
actives and (5) other topics (including deliberations by Council on Accounting of Unlisted
Companies). Participants eagerly asked questions about the future trend in standard development andthe exposure draft on quarterly financial reporting.
We will continuously undertake initiatives like this.

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13. Project Progress as of March 31, 2011 (based on Project Plan updated in
December 17, 2010)
2010
Q4

2011
Q1

2011
Q2

2011
Q3

2011
Q4

Items related to the remaining differences between existing Japanese GAAP and IFRSsEDEDBusiness Combinations (Step2)
Intangibles

Final
Final

Items related to projects addressed in the MoU between the IASB and the FASBED

1 Scope of Consolidations
2 Financial Statement Presentation- Phase B- Discontinued Operations
3 Revenue Recognition
4 Liabilities and Equity Distinctions
5 Financial Instruments

ED
ED

DP

ED

- Classification and Measurement of
Financial Assets- Classification and Measurement of
Financial Liabilities- Impairment

DP2

ED
ED
ED

- Hedging
6 Fair Value Measurement
Disclosure
7 Post-employment Benefits

Final

and

Final

- Step 1- Step 2

DPDP

8 LeasesEDDP

9 Derecognition

ED
ED

Items related to the IASB projects other than those addressed in the MoU between the
IASB and the FASB
Provisions
Emission Trading Schemes
Insurance Contracts

Items other than those addressed by the IASB and the FASB
Special Purpose Entities
Final
Quarterly Financial Statements
ED
Final
Subsequent EventsED
Final[Legend]DP
Discussion Paper
DP2 Advanced Discussion Paper (It is a document presenting preliminary views in the form near toa standard before the development of exposure drafts.)
ED
Exposure Draft
Final Accounting Standard/Guidance etc.
Italicized legends indicate finished events.
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“ASBJ Newsletter” (No. 20)
Issued on May 17, 2011
Editor: Shousaku Shimomura
The views expressed in ASBJ Newsletter are not necessarily those of the ASBJ or the FASF. The
Authors and Publishers accept no responsibility for any loss or damage resulting from reliance on theviews expressed herein.
© Copyright, ASBJ/FASF All Rights Reserved
Website: https://www.asb.or.jp/asb/index_e.jsp
E-mail: publicity@asb.or.jp
Accounting Standards Board of Japan / Financial Accounting Standards Foundation
Fukoku Seimei Building 20F, 2-2, Uchisaiwaicho 2-chome, Chiyoda-ku, Tokyo, Japan (Zip Code:
100-0011)

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