May 1, 2008 (No.2)

Contents
1.

Development of the ASBJ Standards (February 2008 - March 2008)

2.

Overview of the ASBJ Meetings (February 2008 - March 2008)

3.

FASF Managing Director Hiroshi Endo and Standing Board Member Takehiro Arai visit
standard setters and others in Australia and Asian nations

4.

FASF President Toshitaka Hagiwara visits IASCF Chairman Gerrit Zalm and IASB
Chairman Sir David Tweedie

5.

ASBJ Chairman Ikuo Nishikawa attends the Meeting of National Standard Setters (NSS)6.

ASBJ Technical Director Kenichi Akiba receives the Integrity Award 2008 – Accountant
Encouragement Award

7.

FASF hold a Seminar “Points to Consider when Preparing a Report on First Quarter ending
June 30, 2008”8.

Progress of Projects (As of April 1, 2008)

9.

Notices

1. Development

of

the

Standards(released

ASBJ(2) [Final] Announcement of Accounting

betweenStandard for Financial Instruments (ASBJ

February 2008 and March 2008)

Statement(1) [Final] Announcement of Accounting

No.10(Revised

Financialfor Investments (ASBJ Statement No.16) andNo.19) (March 10, 2008)

Solutionon

Unification

andGuidance on Disclosures about Fair Value ofStandard for Equity Method of Accounting

Practical

2008))

Instruments(ASBJ

Guidanceof

Accounting Policies Applied to Associates(3) [Final] Announcement of Accounting

Accounted for Using the Equity Method

Standard for Disclosures about Segments of(PITF No.24) (March 10, 2008)

an Enterprise and Related Information (ASBJ
Statement

No.17)

andGuidanceon
pg. 1

Copyright© ASBJ/FASF All Rights Reserved.

Accounting Standard for Disclosures about

2. Overview of the ASBJ Meetings

Segments of an Enterprise and Related(February 2008 – March 2008)

Information (ASBJ Guidance No.20) (March

1） 146th Meeting (held on February 15, 2008)

21, 2008)a.

b.
(4) [ED] Release of Exposure Draft ofc.
Proposed Partial Amendments to AccountingStandard for Retirement Benefits (3) (ASBJ
Exposure Draft No.24) (March 21, 2008)

d.

e.
f.

(5) [Final] Announcement of AccountingStandard for Asset Retirement Obligations(ASBJ Statement No.18) and Guidance on
Accounting Standard for Asset Retirement
Obligations (ASBJ Guidance No.21) (March
31, 2008)

Progress of Studies conducted byTechnical Committee for Financial
Instruments
Progress of Studies conducted by Practical
Solutions Standing Committee
Progress of Studies conducted by Segment
Reporting Technical Committee
Progress of Studies conducted by
Retirement Benefits Accounting TechnicalCommittee
Progress of Studies conducted byTechnical Committee for Inventories
Progress of Studies conducted byTechnical Committee for Asset Retirement
Obligations

a. The Board discussed the note disclosure
about the “the structure and organization of theentity for managing risks arising from financial
instruments.” It was indicated that, in general,the note disclosure requirement of such
quantitative information with respect to market(6) [ED] Release of Exposure Draft of
Proposed Amendments to ASBJ Statement
No.9, Accounting Standard for Measurementof Inventories (ASBJ Exposure Draft No.25)(March 31, 2008)

risk is intended to be applied primarily to thosecompanies that have the business purpose of
striving to generate profit using financial
instruments,

such

as

banks,

securities

companies, and nonbank financial institutions.
b. The Board discussed the draft texts of the[Legend]
DP: Issue Paper, Discussion Paper
ED: Exposure Draft
Final: Statement/Guidance, etc. (final version)Standard in the lead up to the resolution for
their public release.
c. The Board discussed the draft texts related tothe treatment of the amount of profit subject tosegment

disclosure.

measurement

methodpg. 2
Copyright© ASBJ/FASF All Rights Reserved.

As
is

no

specificprescribedforto eliminating the provision in the current

Progress of Studies conducted byTechnical Committee for Asset Retirement
Obligations
Progress of Studies conducted byTechnical Committee for Inventories
Progress of Studies conducted by
Retirement Benefits Accounting TechnicalCommittee
Progress of Studies conducted byTechnical Committee for Retrospective
Application
Progress of Studies conducted by
Intangible Assets Technical Committee
Progress of Studies conducted byTechnical Committee for Business
Combinations

Standard for Retirement Benefits that permitsa. The Board approved the release of A revised

the use of a discount rate that is determined intoconsideration of changes in bond yields

Instruments and issuance of its implementation

observed during a specified period.

guidancee. The Committee is conducting studies on draft

disclosure concerning the financial instruments

texts with a view to either abolishing the last-in

held and fair value, etc., , of such instruments.

measuring the amount of profit attributable tod.

each reportable segment, it was clarified thate.
the amount of the profit to be disclosed shouldf.
be measured based on the measurement methodthat the company applies to the preparation offinancialinformation

for

each

g.

operatingsegment.

h.

d. The Board is conducting studies with a viewi.

AccountingforStandard

thefor

purposeofFinancial

expandingfirst-out method (LIFO) or continuing to permit

The Standard and the Guidance apply tothe use of LIFO subject to certain additional

financial statements for annual periods ending

disclosure requirement.

on or after March 31, 2010, with earlyf. The staff explained the analysis of comments

application permitted.

on the Exposure Draft and possible responses

b. The Board approved the release of anto the issues raised above.

accounting standard and its practical solutionthatrequireaccounting

principles

and2） 147th Meeting (held on February 28, 2008)

procedures of equity method investees to be, ina.

principle, unified with those of the parentb.

c.

Accounting Standard for Financial
Instruments and Guidance on Disclosuresabout Fair Value of Financial Instruments[Resolution for public release]
Accounting Standard for Equity Method of
Accounting for Investments and Practical
Solution on Unification of Accounting
Policies Applied to Associates Accounted
for Using the Equity Method [Resolution
for public release]
Progress of Studies conducted by Segment
Reporting Technical Committee

company. For the time being, however, apragmatic treatment is also permitted inconsideration of actual practices.
The Standard and the PITF apply toconsolidated

financialstatementsforconsolidated annual periods beginning on or
pg. 3

Copyright© ASBJ/FASF All Rights Reserved.

after April 1, 2010, with early applicationf.

permitted.
c. through f. The Board discussed the draft texts.
With respect to d., the Board discussed theintroduction of new disclosure requirement forquarterly financial statements.

With respect toe., the Board discussed the information
disclosure required in circumstances in whichsignificant holding gains arise if LIFO is to beabolished.

a.

Combinations
Progress of Studies conducted byTechnical Committee for Investment
Property
The

Board

approved

thereleaseof

Accounting Standard for Disclosures about
Segments of an Enterprise and RelatedInformation, which is constructed based on the“management approach.” This Standard applies
to financial statements for annual periods
beginning on or after April 1, 2010, in order toallow for a sufficient preparation period forg. The Board discussed various issues including
accounting for changes in estimates related todepreciation of fixed assets, accounting for
cumulative effect of accounting changes, anddefinition of an error.

preparers. Early application is not permitted.
b. The Board approved the release of an
exposure draft to eliminate the provision in thecurrent Standard for Retirement Benefits that
permits the use of a discount rate that ish. through i. The staff explained comments
received and possible responses to the issues
raised in these comments. .

determined in consideration of changes in bondyields observed during a specified period.
c. and d. The Board discussed the draft texts inthe lead up to the resolution to be made at theth3） 148 Meeting (held on March 14, 2008)
a.

b.

c.

d.
e.

Accounting Standard for Disclosuresabout Segments of an Enterprise andRelated Information and Guidance on
Accounting Standard for Disclosuresabout Segments of an Enterprise andRelated Information [Resolution for
public release]
Exposure Draft of Proposed Partial
Amendments to Accounting Standard for
Retirement Benefits (Part 3) [Resolution
for public release]
Progress of Studies conducted byTechnical Committee for Asset Retirement
Obligations
Progress of Studies conducted byTechnical Committee for Inventories
Progress of Studies conducted byTechnical Committee for Businessnext Board meeting for their public release.
e. The Board confirmed that future studies will
be conducted with a view to abolishing thepooling of interests method.
f. The Board discussed whether the valuation of
investment property should be based on fairvalue or fair value of investment property
should be disclosed.

As it was indicated that

it is important to disclose fair value ofinvestment property, under the equivalence
assessment by the EU, and for certain otherpg. 4
Copyright© ASBJ/FASF All Rights Reserved.

considerations, the Board decided that thewill be over before that date.

future studies will focus on fair valuec. The staff reported comments on the exposure

disclosure of investment property.

draft and responses to the issues raised in thecomments. d. The board discussed issues4） 149th Meeting (held on March 25, 2008)

related to the subprime loan crisis; in particular,a.

issues on i) valuation of and accounting for

Accounting Standard for Asset Retirement
Obligations and Guidance on AccountingStandard for Asset Retirement Obligations[Resolution for public release]b. Exposure Draft “Accounting Standard for
Measurement of Inventories” [Resolution
for public release]c. Progress of Studies conducted by TechnicalCommittee for Special Purpose Companies
d. Exchange of opinions concerning thesubprime loan crisise. Progress of Studies conducted by TechnicalCommittee for Business Combinations
f. Progress of Studies conducted by
Intangible Assets Technical Committeea. The Board approved the release of an
accounting standard and its implementation
guidance that require companies to record asset
retirement obligations as liabilities, and record
the corresponding retirement expenses in plant,

The Standard and the Guidance apply tostatements

etc. should be included in the consolidation
scope.
e. The staff reported the progress of studies on
the comments received for the Issue Paper.
The board discussed with a view to requiring
negative goodwill to be accounted for as a gain
as of the acquisition date, for reasons including
the perspective of convergence of accounting
standards.
f. The staff reported the progress of studies on
accounting for in-process R&D acquired in abusiness combination, i.e., whether to maintainproperty and equipment.

financialsecuritized instruments and ii) whether conduits,for

annualperiods

beginning on or after April 1, 2010, with early

the current expense treatment or whether torequire capitalization of in-process R&D if itsatisfies certain requirements, in order to beconsistent

application permitted.
b. The Board approved the release of anwithinternationallyacceptedaccounting standards.

exposure draft to eliminate “LIFO” as a cost
formula for inventories, which has been
permitted in Japan. The deadline for publiccomments on the exposure draft is set on May
26, because annual closing of many enterprises

pg. 5
Copyright© ASBJ/FASF All Rights Reserved.

<February 7>

3. FASF Managing Director Hiroshi
Endo and Standing Board Member
Takehiro Arai visit standard setters

Australian

AccountingStandards

Board (AASB)

and others in Australia and Asian・David Boymal, Chairman

nations・Attended the AASB Board Meeting

Currently,internationally<February 8>

acceptedaccounting standards are in the process of amajor transition, as evidenced, for example, byFinancial Reporting Council (FRC,
Auastralia)

the possibility that the U.S. regulators may

・ Jeffrey Lucy, Chairman

permit U.S. domestic companies to report under

The Treasury

the International Financial Reporting Standards

・Geoff Miller, Head of Corporate and(IFRS)

withinthecircumstances,

FASF

year.

Under

Managing

these

Financial Services Division

Directorand four others

Hiroshi Endo and Standing Board Member
Takehiro Arai visited Australia on February 7
and 8, 2008, Malaysia on March 4, and India on<March 4>
Malaysian

AccountingStandards

Board (MASB)

March 5 in order to exchange opinions with・Nordin Mohd Zain, Executive Director

standard setters and other relevant parties in・ Tan Bee Leng, Senior TechnicalAsia and Oceania, that are geographically close

Managerto Japan, with respect to responses to the global<March 5>

convergence of accounting standards, as well as

The Institute of Chartered Accountants

the organization and the status of accounting
standard development of each standard setter.
The schedule of the visit and the parties they
had meetings with are
below.

shown in the table

Of India (ICAI)・ Ved Jain, Chairman
・ UttamPrakashAgarwal,Vice

Chairman・Ashok Haldia, Chief Secretary
and three others
We shared the following understanding withall of the abovementioned standard setterspg. 6
Copyright© ASBJ/FASF All Rights Reserved.

concerning the responses to be made to the

influence of the UK historically, the basic

trend of global convergence of accounting

approach to the adoption of IFRS has beenstandards.

to accept it as is. However, some of thez The fundamental premise is that the IFRS

individual standards, including IAS 39

will never be fixed in stone and will

“Financial Instruments: Recognition andcontinue to change.

Standard setters

Measurement,” have not been adopted.

must be ready to respond to such changes

As such, only a partial adoption of thein a timely manner.

IFRS has been actually achieved to date.

z “Sharing of various issues,” such as issues

z

India

in practical applications regarding the IFRS

Indian accounting standards have beenand “mutual understanding” among thedeveloped based on the IFRS.

standard setters to acknowledge eachin July 2007, it was decided that the fullother’s view are critical.

version of the IFRS will be adopted inz In order to realize the above, active

However,

April 2011, with a possibility of certain

andcurve-out depending on the circumstances.

regions should be promoted in various

As can be seen from the above report,

communication

betweennations

situations are diverse regarding theforms.
With respect to the convergence status in

IFRS

convergence among nations in Asia andeach country, we received the following

Oceania.

explanations.

ASBJ/FASF considers it necessary for us as az

Australia

member of the Asia/Oceania region to continue

An “Australian version of the IFRS” wasto have close communication with standard

introduced

in

2005

with

certainsetters in each country and promote sharing ofamendments

to

the

original

IFRS

understanding among these standard setters.

includingtheeliminationof

In view of these circumstances,

certainoptions permitted in the original version.
However, the full version of the IFRS has
been adopted since January 2008.
z

Malaysia
As Malaysia has been under strong
pg. 7
Copyright© ASBJ/FASF All Rights Reserved.

4. FASF

President

Toshitaka

how the sponsoring bodies can support it, 2) the

Hagiwara visits IASCF Chairman

IASCF’s response to global convergence ofGerrit Zalm and IASB Chairman

accounting standards, and 3) responses toward

Sir David Tweedie

a closer relationship between Japan and

In March 2008, FASF President Toshitaka

IASCF/IASB.

Hagiwara, together with Managing Director
Hiroshi Endo, visited London to meet with Mr.
Gerrit Zalm, Chairman of the International

5. ASBJ Chairman Ikuo Nishikawa

Accounting Standards Committee Foundation

attends the Meeting of National(IASCF) and Sir David Tweedie, Chairman ofStandard Setters (NSS)

the International Accounting Standards Board

The Meeting of National Standard Setters(IASB).

was held on March 27 and 28, 2008 in

The purpose of this meeting was to exchange

Melbourne, Australia.

opinions with chief market constituents in view

The NSS Meeting used to function as aof the recent rapid developments in the global

forum in which the IASB discusses issues

convergence of accounting standards as the U.S.

including its operating policy with major

is taking steps toward convergence with thestandard setters in the world (so-called liaison

IFRS. Mr. Hagiwara also had meetings with Mr.

nations or the liaison body). 1

Denham, Chairman of the U.S. Financial

since September 2005, that function was

Accounting Foundation (FAF), Mr. Herz,transferred to a IASB Meeting with World

Chairmanof

AccountingStandard

Standards

Board

the

annually in September).

theFinancial(FASB),

andU.S.

Setters(WSS

However,

Meeting,

heldCurrently, the NSS

Securities and Exchange Commission (SEC)

Meeting is held semiannually in spring andCommissioner

Chief

autumn under the sponsorship of various

Accountant Mr. Hewitt, among others, innational standard setters including the liaison

November 2007.

nations to discuss input and support to be

Ms.

Casey

and

During the recent meeting in London,

provided for research projects conducted byopinions were exchanged on a broad range of1

topics including 1) outlook for the progress ofglobal convergence of accounting standards andConsists of Japan, the U.S. the UK, Canada,
Germany, France, Australia and New Zealand,
as well as EFRAG, which joined the liaison
body in 2004.

pg. 8
Copyright© ASBJ/FASF All Rights Reserved.

each standard setter, as well as for projects

Agenda< March 28 >and the work plan of the IASB.
The March 2008 NSS Meeting was chaired

AcSB

6） Rateby Mr. Ian McIntosh, Chairman of theRegulatedAccounting Standards Board (ASB UK) andOperations

attended by standard

Presented bysetters ofseven7） Measurement

ASB

ex-liaison nations other than the FASB, the8） Complexity

ASB

European9） Non-ASB

Financial

Reporting

Advisory

Group (EFRAG), standard setters of Hong

Consolidated

Kong, Taiwan, Lebanon, and South Africa, as

Information

well as the IASB.

In total, 30 participants10) Closure

from 13 standard setters participated in the
Meeting. From Japan, ASBJ Chairman Ikuo
Nishikawa together with some other members
attended the Meeting.

Akiba receives the Integrity Award

The agenda and the respective presenterswere as follows:
Agenda

6. ASBJ Technical Director Kenichi

2008 – Accountant Encouragement
Award

Presented by< March 27 >ASBJ Technical Director Kenichi Akiba
recently1） Structure and

ASB (UK)

receivedthe“Accountant

Encouragement Award 2008” by the Japan

Purpose of theInternal Control Grand Prix - Integrity Award –NSS

Council.

2） IASBWork

ASB

Programme

The “Japan Internal Control Grand Prix 2008
- Integrity Award -”, previously called “Key

3） Intangibles

AASB (Australia)

Firm of Integrity Award”, was established by

4） Retirement

AcSB (Canada)

the Sankei Shimbun and KFi K.K. in 2002 forBenefit Plans
5） Conceptual
Framework

the purpose of supporting companies with high
IASB, AcSB , FRSB

awareness of compliance. It was renamed this(New Zealand)

year to highlight the fact that integrity is one ofpg. 9
Copyright© ASBJ/FASF All Rights Reserved.

the most important factors that influence theaward. I understand that this award was granted

internal control. From this year, a special award

for the appreciation of my work as a researchcalled “Accountant Encouragement Award

fellow at the ASBJ in helping the Board to2008” was granted to the three most eligible

develop accounting standards. If so, I owe a

accounting

youngergreat deal, for this honor of receiving the award,

generations who are (1) striving to achieve

to my colleagues at the ASBJ and others who

excellent performance in their own areas ofworked together with me in the development ofaccounting
international

professionals

profession

among

from

perspective,thebroader,

accounting standards and all others who(2)

makingsupported our efforts.

contributions toward further developments of

I would like to express

my gratitude to them all.”
The ASBJ hopes that this award will be a

the Japanese accounting system, and (3)making contributions to the promotion of thesourcepublicity of the profession and the role ofaccounting professionals for their professional

certified public accountants.

development.

Mr. Akiba wasofencouragementforJapanese

Other awardees are also listed below.

selected as one of the awardees.
9

Accountant Encouragement Award 2008¾

Mr. Makoto Shinohara (CPA, Ernst &Young ShinNihon)¾

Mr. Shinya Yamada (CPA, Shinya
Yamada Accounting Office)9

Japan Internal Control Grand Prix 2008 –Integrity Award –¾

First Prize
Seven & i Holdings Co., Ltd.

(Photo by” Financial Japan” Editorial Department)

The award ceremony was held on March 26,¾

Merit Awards
Kyoritsu Electric Corporation

2008 at TSE Arrows, and Mr. Akiba expressed
his gratitude for the award as follows:“I am very grateful that I am granted such an
pg. 10
Copyright© ASBJ/FASF All Rights Reserved.

7. FASF holds a Seminar “Points toConsider when Preparing a Reporton First Quarter ending June 30,
2008”
A new quarterly reporting system will be
introduced with respect to annual periods
beginning on or after April 1, 2008.

In

conjunction with this, FASF held a seminarfor preparers on “Points to Consider When
Preparing Report on First Quarter Ending
June 30, 2008.” At the same time, the ASBJ
held a briefing session on “the ASBJ’s Recent
Activities and Overview of AccountingStandards for Quarterly Financial Reporting.”
As this was the first seminar on quarterly
reports, it was held more than one monthearlierthanconventionalseminarsonsecurities reports and other topics.
The seminar was held in 11 sessions in
total in 9 prefectures all over Japan, i.e., in
Osaka, Tokyo (three sessions), Nagoya,Takamatsu, Kanazawa, Sendai, Hiroshima,
Sapporo and Fukuoka, commencing on(Tuesday) February 26.

The seminar was

highly successful with more than 4,000
participants, evidencing the strong interest
among market constituents in the newly
introduced disclosure system.

pg. 11
Copyright© ASBJ/FASF All Rights Reserved.

8. Progress of Projects (related to convergence)
2007
Q4

As of April 1, 2008
2008

Q1

Q2

2009
Q3

Q4

H1

H2

1. Items advised by CESR for EU equivalence assessment purpose (short-term)
Business Combinations(STEP1)
Pooling-of-interest method

RR/DP

ED

Final

Others

RR/DP

ED

Final

ED

Inventories（LIFO）
Uniformity of accounting
policies(Associates)

ED

Final

Final

Impairments of fixed assets
Intangibles (R&D expenses)

DP

Construction contracts

Final

Asset retirement obligations

ED

Retirement benefits

ED

Final

Final
ED

Final

Disclosure of FV information of

Finalfinancial instruments

Investment property

TC

ED

Final

2. Items remaining differences between Japanese GAAP and IFRSs except above
Segment reporting(medium-term)

FinalBusiness Combinations（STEP２)
Issues for PHASE2

ED

Amortization of goodwill

ED

Retrospective restatement
Change in accounting policy

（DP)

ED

Final

Depreciation method

（DP)

ED

Final

Discontinued operations
3.Items related MOU between the IASB and the FASB (medium and long-term)
Scope of consolidations

DP

Financial statement presentation

TC

DP

Revenue recognitionTC

DP

Liabilities and equity distinctions

WG

Financial instruments【Legend】
WG Launch of Working GroupTC Launch of Technical Committee
RR Research Report
DP Issue Paper, Discussion Paper
ED Exposure Draft
Final Standards/Guidance (Final Version) Italic face describes done events

pg. 12
Copyright© ASBJ/FASF All Rights Reserved.

9. Notices
1) Regular meeting with the IASB and theFASB
ASBJ and IASB held their seventh regularmeeting under the joint convergence project on
April 8 and 9 in Tokyo, inviting Sir David
Tweedie, Chairman of the IASB and others(refer to the press release issued after theseventh regular meeting). In addition, seeing
this as a great opportunity, the ASBJ held aroundtable meeting with Chairman Tweedie aswell as a Special Joint Seminar of the IASB
and the ASBJ intended to increase theawareness among the market constituents about
thecurrent

statusofglobalaccounting“ASBJ Newsletter” (No. 2)

convergence.
Further, the fifth regular meeting with theIssued on May 1, 2008

FASB will be held starting on May 26 in Tokyo,

Editor：Akiyoshi Maruyama

inviting Robert H. Herz, Chairman of the FASB

The views expressed in ASBJ Newsletter are notandnecessarily those of the ASBJ or the FASF. The

others.

A roundtable

meetingwith

Chairman Herz and others is also scheduled.
The results of these regular meetings will be

Authors and Publishers accept no responsibility for
any loss or damage resulting from reliance on thereported in detail in the next issue of thisviews expressed herein.

newsletter (scheduled for June).

©Copyright, ASBJ/FASF All Rights Reserved
Web-site : https://www.asb.or.jp/asb/index_e.jsp

2) The publications

Accounting Standards Board of Japan / Financial“Guide for the Preparation of Quarterly
Report (for the reporting on the first quarter
ending June 30, 2008)”

Accounting Standards Foundation
Fukoku Seimei Building 20F, 2-2, Uchisaiwaicho
2-chome, Chiyoda-ku, Tokyo, Japan(Zip Code:100-0011)

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