Issued March 12, 2009 (No.7)

Contents
1. Developments of the ASBJ Standards, etc. (released
between December 6, 2008 and February 6, 2009)
2. Overview of ASBJ Meetings (167th meeting - 170thmeeting)
3. ASBJ’s Comments on Document Issued by the IASB
and the FASB (December 1, 2008 – January 31, 2009)
4. ASBJ Completes the Short-term Projects in theTokyo Agreement
5. ASBJ Dispatches Staffs to the IASB
6. Project Progress (As of February 12, 2009)
7. Notices

1. Developments of the ASBJ Standards, etc. (released between December 6, 2008 andFebruary 6, 2009)(1) [Final] Announcement of Accounting Standard for Business Combinations (ASBJ Statement No.
21), Accounting Standard for Consolidated Financial Statements (ASBJ Statement No. 22), Partial
Amendments to the Accounting Standard for Research and Development Cost (ASBJ Statement No.
23), Accounting Standard for Business Divestitures (ASBJ Statement No. 7 (revised 2008)),
Accounting Standard for Equity Method of Accounting for Investments (ASBJ Statement No. 16(revised 2008)) and Implementation Guidance on Accounting Standard for Business Combinations andBusiness Divestitures (ASBJ Guidance No. 10 (revised 2008)) (December 26, 2008)(2) [Final] Announcement of Accounting Standard for Quarterly Financial Reporting (ASBJ Statement
No. 12 (revised 2008)) and its Implementation Guidance, Guidance on Accounting Standard for
Quarterly Financial Reporting (ASBJ Guidance No. 14( revised 2008)) (December 26, 2008)(3) [DP] Announcement of Discussion Paper on Accounting for Retirement Benefits (January 22,2009)(4) [DP] Announcement of Discussion Paper on Treatment of Special Purpose Entities and Related
Matters in Consolidated Financial Statements (February 6, 2009)[Legend]
DP: Discussion Paper
ED: Exposure Draft
Final: Standards/Guidance (Final version)pg. 1
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2. Overview of ASBJ Meetings (167th meeting - 170th meeting)(1) 167th Meeting (held on December 4, 2008)
a. Tentative Solution on Reclassification of Debt Securities (Draft) [Resolution for public release]b. Progress of Studies conducted by Technical Committee for Business Combinations
c. Progress of Studies conducted by Retirement Benefits Accounting Technical Committee
d. Progress of Studies conducted by Technical Committee for Financial Statement Presentatione. Progress of Studies conducted by Technical Committee for Financial Instrumentsf.

New Subjects for Study

a. As the International Accounting Standards Board (IASB) announced that it permitｓ the reclassification offinancial assets from the held-for-trading to other category in response to the financial crisis, the Board discussed
the accounting treatment in Japan, and resolved for public release of Practical Issues Task Force (PITF) to permit
reclassification of debt securities subject to certain requirements.
Upon resolution, two board members stood in opposition citing that the proposed revision of accounting standards
was likely to invite moral hazard among managements and significantly undermine trust in standard-setters.
b. The Board discussed the final draft of a series of accounting standards including Accounting Standard forBusiness Combinations.
c. The Board discussed each issue in the forthcoming Discussion Paper. Since the IASB’s Discussion Paper
mentioned abolition of accounting for expected return on plan assets, the accounting thereof was discussed.
d. The staff outlined the Discussion Paper released by the IASB and the US Financial Accounting Standards
Board (FASB).
e. While the IASB seeks to develop guidance on fair value measurement, efforts are also being made in Japan todevelop a Discussion Paper to review accounting standards relating to fair value measurement from the viewpointof convergence of accounting standards.
f. As a new subject for study, the Board decided to start discussions on accounting for electronically recordedmonetary claims and the scheme for holding an entity’s own share which has recently been started to be
introduced in Japan.
(2) 168th Meeting (held on December 18, 2008)
a. Accounting Standards for Business Combinations (Draft) [Resolution for public release]b. Revised Accounting Standard for Quarterly Financial Reporting (Draft) [Resolution for public release]c. Progress of Studies conducted by Retirement Benefits Accounting Technical Committee
d. Progress of Studies conducted by Technical Committee for Special Purpose Entities
e. Progress of Studies conducted by Technical Committee for Financial Statement Presentationf.

Progress of Studies conducted by Technical Committee for Retrospective Restatement

g. Discussions on Accounting Treatment of Emission Trading Schemesa. The Board approved the resolution for public release of the Accounting Standards for Business Combinations
which had been discussed to respond to the assessment of equivalence by EU. These standards cover theelimination of the pooling of interest method and the accounting treatment for step acquisition. Japan’s responseto the assessment of equivalence by EU was completed by the release of these accounting standards.
b. The Board approved the resolution for public release of the revision of the Accounting Standard for Quarterly
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Financial Reporting to require disclosure of quarterly segment information based on the management approach.
c. & d. The Board discussed draft texts of the forthcoming Discussion Papers.
e. The staff outlined the IASB’s Exposure Draft, “Discontinued Operations (proposed amendment to IFRS 5)” andexplained the draft comments.
f. The Board discussed the treatment of notes on accounting standards that have not been applied and thetreatment when it is practically impossible to restate the financial statements to correct errors.
g. The Board decided to start discussions newly on the accounting treatment for emissions trading in the trial
scheme for emissions quota transactions at the “Emission Trade Technical Committee”(3) 169th Meeting (held on January 15, 2009)a. Discussion Paper on Accounting for Retirement Benefits (Draft) [Resolution for public release]b. Progress of Studies conducted by Technical Committee for Retrospective Restatementc. Progress of Studies conducted by Technical Committee for Special Purpose Entities
d. Progress of Studies conducted by Technical Committee for Financial Instruments
a. The Board plans to revise the Accounting Standard for Retirement Benefits in or around 2011 and approved theresolution for public release of the Discussion Paper for this reason. The Discussion Paper encompasses a broad
range of issues based on the treatment under, and development of, the internationally accepted accounting
standards. The Discussion Paper was released on January 22, 2009 and the ASBJ invites comments until April 6,
2009.
b. The Board discussed the draft texts as well as the issues related to the Accounting Standard for Quarterly
Financial Reporting (including the treatment of cases where the accounting policy is changed in or after thesecond quarter) and on segment information.
c. The Board discussed the final draft text of forthcoming Discussion Paper.
d. The Board discussed the electronically recorded monetary claims and whether they can be treated andrepresented in a similar way as notes receivable.
(4) 170th Meeting (held on January 30, 2009)a. Discussion Paper on the Treatment of Special Purpose Entities and related matters in Consolidated
Financial Statements (Draft) [Resolution for public release]b. Progress of Studies conducted by Technical Committee for Retrospective Restatementc. Progress of Studies conducted by Technical Committee for Revenue Recognition
a. The Board approved the resolution for public release of the Discussion Paper on the Treatment of Special
Purpose Entities and related matters in Consolidated Financial Statements. For definition of control, which isbased on the internationally accepted accounting standards, the Board is considering to add return criterion. In
addition, under the existing standards, special purpose entities which satisfy certain requirements are not to beconsidered as the subsidiaries of the investors of such special purpose entities. However, in accordance with thetreatment under, and development of, the internationally accepted accounting standards, the Board is carrying out
discussions including on possible deletion of such treatment. The Discussion Paper was released on February 6,
2009 and the ASBJ invites comments until April 13, 2009.

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b. The Board discussed issues related to the fiscal year of initial application and the treatment of cases where it ispractically impossible to restate the financial statements to correct errors. The Board also discussed the timing for
application, and most agreed that application should be simultaneous and early application should not be
permitted.
c. The staff outlined the IASB/FASB Discussion Paper “Preliminary Views on Revenue Recognition in Contracts
with Customers.”

3. ASBJ’s Comments on Document Issued by the IASB and the FASB (December 1, 2008
– January 31, 2009)(1) The ASBJ submitted Comments on Exposure Draft “Simplifying Earnings per Share (Proposed
amendments to IAS No. 33)” (December 5, 2008)(Click here for an outline of the Exposure Draft “Simplifying Earnings per Share (Proposed amendments to IAS33)”.)(2) The ASBJ submitted Comments on Exposure Draft “Improvements on Disclosures for Financial
Instruments” (Proposed Amendment to IFRS No. 7 “Financial Instruments: Disclosure”) (December 12,
2008)(Click here for an outline of the Exposure Draft “Improvements on Disclosures for Financial Instruments”(Proposed Amendments to IFRS No. 7 “Financial Instruments: Disclosures”).)(3) The ASBJ submitted Comments on Exposure Draft “Proposed Amendment to IFRS No. 5:
Discontinued Operations” (January 23, 2009)(Click here for an outline of Exposure Draft “Proposed Amendment to IFRS No. 5: Discontinued Operations”.)

4. ASBJ Completes the Short-term Projects in the Tokyo Agreement
The Accounting Standards Board of Japan (ASBJ) had worked to respond to the assessment of equivalence by theEuropean Union (EU) as the top priority issue since 2005. The ASBJ also positioned the 26 items advised by theCommittee of European Securities Regulators (CESR) for EU equivalence assessment purpose as the short-term
convergence items in the “Tokyo Agreement” with the IASB in August 2007 and worked on these items with theobjective of completing them by the end of 2008. The objective was met almost according to the plan by therelease of Accounting Standards for Business Combinations on December 26, 2008.
On the other hand, in December 2008, the European Commission (EC) also made an announcement that theJapanese accounting standards, as well as the U.S. GAAP, were found to be equivalent to the IFRS as adopted by
European Union.
As described above, the convergence between Japan’s accounting standards and the international accounting
standards achieved a significant milestone. Going forward, the Board will continue discussions focusing on themedium- to long-term convergence items to accelerate the convergence.

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Response to “26 Items advised by CESR for EU equivalence assessment purpose (Note)”
Remedies

Items
Business combinations(pooling of interests
method)Supplementary
Scope of consolidation
Statements
Uniformity of accounting
policies of overseas
subsidiaries
Share-based payments（Expense recognition）

Business combinations(Date of exchange)(Negative goodwill)(Capitalization of acquired
R&D in process)Disclosure B
Quantitative
Disclosures
Lower of costor market
Inventories method
LIFO

Uniformity of accounting
policies among associates

Impairment test
Capitalization ofdevelopment cost
Agriculture
Share-based Payments (ifno expensing criteria aredisclosed in the newstandards)
Disclosure A
Qualitative
Disclosures

Business combinations(Minority interest)(Step acquisitions)(Translation of goodwill)

Released Standards
ASBJ Statement No. 21: “Accounting Standard for Business
Combinations” (December 2008)
ASBJ Guidance No. 15: “Guidance on Disclosures about Certain
Special Purpose Entities” (March 2007)
ASBJ PITF No. 18: “Practical Solution on Unification of
Accounting Policies Applied to Foreign Subsidiaries for
Consolidated Financial Statements” (May 2006)
ASBJ Statement No. 8: “Accounting Standard for Share-based
Payment” (December 2005)
ASBJ Guidance No. 11: “Guidance on Accounting Standard for
Share-based Payment” (December 2005)
ASBJ Statement No. 21: “Accounting Standard for Business
Combinations” (December 2008)
ASBJ Statement No. 22: “Accounting Standard for Consolidated
Financial Statements” (December 2008)
ASBJ Statement No. 23: Partial Amendments to “AccountingStandard for Research and Development Costs” (December 2008)
ASBJ Statement No. 7 (Revised 2008): “Revised AccountingStandard for Divestiture” (December 2008)
ASBJ Statement No. 16 (Revised 2008): “Revised AccountingStandard for Equity Method of Accounting for Investments”(December 2008)
ASBJ Guidance No. 10 (Revised 2008): “Revised Guidance on
Accounting Standard for Business Combinations and AccountingStandard for Business Divestitures” (December 2008)
ASBJ Statement No. 9: “Accounting Standard for Measurement of
Inventories” (July 2006)
ASBJ Statement No. 9 (Revised 2008): “Revised AccountingStandard for Measurement of Inventories” (September 2008)
ASBJ Statement No. 16: “Accounting Standard for Equity Methodof Accounting for Investments” (March 2008)
ASBJ PITF No. 24: “Practical Solution on Unification of
Accounting Policies Applied to Associates Accounted for Using
the Equity Method” (March 2008)
The ASBJ will deliberate this item considering developments at
IASB/FASB.
The ASBJ will deliberate this item considering developments at
IASB/FASB.
Not to be addressed as a project
ASBJ Statement No. 8: “Accounting Standard for Share-based
Payment” (December 2005)
ASBJ Guidance No. 11: “Guidance on Accounting Standard for
Share-based Payment” (December 2005)
ASBJ Statement No. 21: “Accounting Standard for Business
Combinations” (December 2008)
ASBJ Statement No. 22: “Accounting Standard for Consolidated
Financial Statements” (December 2008)
ASBJ Statement No. 7 (Revised 2008): “Revised AccountingStandard for Business Divestitures” (December 2008)
ASBJ Guidance No. 10 (Revised 2008): “Revised Guidance on
Accounting Standard for Business Combinations and AccountingStandard for Business Divestitures” (December 2008)
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Remedies

Items
Insurance accounting(catastrophic provisions)

Released Standards
Not to be addressed as a project

ASBJ Statement No. 15: “Accounting Standard for Construction
Construction contracts (theContracts” (December 2007)
percentage of completion
ASBJ Guidance No. 18: “ Guidance on Accounting Standard formethod)Construction Contracts” (December 2007)
Nonperforming loans
Not to be addressed as a project
Costs for Assets retirement ASBJ Statement No. 18: “Accounting Standard for Asset
Obligations
Retirement Obligations” (March 2008)
ASBJ Guidance No. 21: “Guidance on Accounting Standard for
Asset retirement
Asset Retirement Obligations” (March 2008)
obligations
Retirement benefits
ASBJ Statement No. 19: “Partial Amendments to Accounting(discount rate)
Standard for Retirement Benefits (Part 3)” (July 2008)
ASBJ Statement No. 10 (Revised 2008): “Revised Accounting
Disclosure of fair value of Standard for Financial Instruments” (March 2008)
financial instruments
ASBJ Guidance No. 19: “I Guidance on Disclosures about Fair
Value of Financial Instruments” (March 2008)
The ASBJ will deliberate this item considering developments at
Reversal of impairment
IASB/FASB.
ASBJ Statement No. 20: “Accounting Standard for Disclosuresabout Fair Value of Investment and Rental Property” (November
2008)
Investment property
ASBJ Guidance No. 23: “Guidance on Accounting Standard forDisclosures about Fair Value of Investment and Rental Property”((November 2008)
Financial instruments (notThe ASBJ will deliberate this item considering developments at
included in the advise thisIASB/FASB.
time)(Note) Twenty-six items for which remedies were advised in July 2005 by the CESR for the financial statements prepared inaccordance with the Japanese standards in relation to the assessment of equivalence by the European Commission (EC).

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5. ASBJ Dispatches Staffs to the IASB
For some time, the ASBJ has dispatched staffs to the IASB with certain objectives including seeking closer links
between the Boards. This year, four new staffs are seconded to the IASB for external assignment or on a businesstrip basis to participate in the IASB’s projects (in addition, one staff has been dispatched to the FASB).
Toshikazu Masuyama

Term: February 2009 - November 2010

The project he will be responsible for at the IASB: Common control transactions, etc.

Aspiration: “I would like to contribute to the development of higher quality international accounting
standards, making use of my experience in Japan.”Parent organization: Ernst & Young ShinNihon LLC

Mitsuhiro Takemura

Term: Two years from Spring 2009

The project he will be responsible for at the IASB: response to comments on Exposure Draft proposed
amendment to IAS12 Income taxes, etc.

Aspiration: “I intend to give my best on all the work, and to get along with everybody and build trust.”

Parent organization: Tohmatsu Tax Co.

Keiji Fukuzawa


Term: (on a business trip basis)

The project he will be responsible for at the IASB: Derecognition

Aspiration: “There are so many issues, complex problems, and tight deadlines in the project, but I hope tocontribute as much as possible.”

Parent organization: The Bank of Japan

Takashi Matabe

Term: (on a business trip basis)

The project he will be responsible for at the IASB: Financial statement presentation



Aspiration: “It has a long history since it was started as a performance reporting project, so I feel the weightof responsibility. I’ll do the best I can.”Parent organization: Deloitte Touche Tohmatsu

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6. Project Progress (As of February 12, 2009)
2008

2008

2009

2009

2009

2009

Q3

Q4

Q1

Q2

Q3

Q4

2010

1.Items advised by CESR for EU equivalence assessment purpose (short-term)
Business Combinations(Step 1)
Final
Inventories(LIFO)
Final
Impairments of fixed assets
Intangibles (In-process R&D)
Final
Retirement benefits(Discount rate)
Final
Investment property
Final
2.Items related to the remaining differences between existing Japanese GAAP and
IFRS(medium-term)
Business Combinations
DP
ED(Step 2: Issues for phase2)
Business Combinations
DP
ED(Step 2: Amortization of goodwill)
Intangibles
DP
Retrospective restatement
ED
Final(Change in accounting policy)
Discontinued operations
DP
ED
Final
3.Items related to the MoU between the IASB and the FASB(medium and long-term)
Scope of consolidations
DP
ED
Final
Financial statement presentation
DP
ED
Final
(Comprehensive income and other)
Financial statement presentation
DP(Phase B)
Revenue recognition
DP
Liabilities and equity distinctions
Financial instruments
DP(Replacement of existing standards)
Financial instruments
DP(Fair value measurement)
Post-employment benefits
DP
Lease
4.Items related to the IASB projects other than the MoU between the IASB and the
FASB(medium and long-term)
Earnings per share
TC
ED
Final
Provisions
TC
DP
ED
Insurance contracts[Legend]
WG

Launch of Working Group TC

Launch of Technical Committee

RR

Research Report

DP

Discussion PaperED

Exposure Draft

Final Standards/Guidance (Final Version)

Italicized legends indicate finished events.

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7. Notices(1) The publications
Periodical - Accounting Standards Quarterly No. 23 (to be published in March 15, 2009)[Main contents]Feature article 1: “Future Perspective of Application of the IFRSｓ to Japanese Companies”
Constituents’ Comments on “Public Consultation on Application of International Accounting Standards inJapan (Interim Report) (Draft)”, Planning and Coordination Committee, Business Accounting Council
“Expectations for the Japanese Roadmap”, Noriaki Shimazaki, Director, Executive Vice President,
Sumitomo Corporation

“The Role of Certified Public Accountants Facing an Era of Globalization”, Koichi Masuda,
Chairman and President of the Japanese Institute of Certified Public Accountants (JICPA)“Application of International Accounting Standards from the Viewpoint of a Provider of Markets”,
Atsushi Saito, President & CEO, Tokyo Stock Exchange Group, Inc.



“Toward New Age of Participation”, Yukio Suzuki, Chairman of the Security Analysts Associationof Japan“ASBJ’s Challenges Toward Adoption of IFRSs”, Shigeo Sakase, Vice Chairman of the ASBJ

Feature article 2: “Milestones Toward Global Convergence”: Completion of Short-term Convergence Items
based on the Tokyo Agreement
“Upon Completion of Short-term Convergence Items based on the Tokyo Agreement”, Ikuo
Nishikawa, Chairman of the ASBJ“ASBJ’s Efforts for the EU’s Equivalence Assessment Items”, Takehiro Arai, Board Member(full-time) of the ASBJ“Assessment of Equivalence of Accounting Standards by the EU”, Toshitake Inoue, International
Accounting Coordination Office, Planning and Coordination Bureau, Financial Services Agency

Accounting Square: “Debate over Legislation for Listed Companies”, Hideki Kanda, Professor, Universityof Tokyo Graduate Schools for Law and Politics



CFO Letter: “Accounting Standards and Insurance Companies”, Toshio Abe, Senior Managing Executive
Officer, Meiji Yasuda Life Insurance Company

This periodical is in Japanese only and can be purchased through our website.
(2) Accounting standards and other documents are now freely available on the ASBJ/FASF’s website.
Recently, there has been growing interest in accounting standard including the progress of convergence withinternational accounting standards and debates over application of the IFRSs to Japanese companies. Therefore,
from the beginning of this year, accounting standards and other documents issued by the ASBJ are made freely
available on our website (in the past, the accounting standards were limited to the members only two months after
release). Please use this service (Accounting standards and other documents issued by the ASBJ are Japaneseonly).

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“ASBJ Newsletter”(No. 7)
Issued on March12, 2009
Editor：Akiyoshi Maruyama
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 the views
expressed herein.
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Web-site : https://www.asb.or.jp/asb/index_e.jsp
E-mail : publicity@asb.or.jp
Accounting Standards Board of Japan / Financial Accounting Standards Foundation
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Fax : +81-3-5510-2712

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