Issued September 20, 2013 (No. 34)

Contents

1. New ASBJ Pronouncements (released between June 1 and July 31, 2013)
2. Overview of ASBJ Meetings (266th – 269th Meeting)
3. ASBJ’s Comment Submissions to the IASB and the FASB (June 1, 2013 –July 31, 2013)
4. The 18th Standards Advisory Council Meeting
5. Establishment of Working Group for Endorsement of IFRSs, Appointmentof Members
6. Appointment of Councillors, Directors, Auditors, and others

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1. New ASBJ Pronouncements (released between June 1 and July 31, 2013)(1) [ED] Release of the Exposure Draft of Practical Solution on Transactions of Delivering theCompany’s Own Stock to Employees etc. through Trusts (Exposure Draft of PITF No.39) (July 2,
2013)[Legend]
ED: Exposure Draft
Final: Statement/Guidance etc. (final version)

2. Overview of ASBJ Meetings (266th – 269th Meeting)(1) 266th Meeting (held on June 13, 2013)
a. Responses to the FASB Exposure Draft Financial Instruments—Credit Losses, and to the
IASB’s Exposure Draft Financial Instruments: Expected Credit Losses
b. The ASBJ’s Request for Views on the IASB’s Exposure Draft Leasesc. Discussion on Accounting for transactions that deliver the company’s own stock through trusts
d. Discussion on Business Combinations (Step 2)a.

After being presented with a draft comment letter on the FASB Exposure Draft as well as an
outline of comments on the IASB Exposure Draft, the Board discussed its responses to each of the
exposure drafts respectively.

b.

In developing the ASBJ’s comments on the revised Exposure Draft Leases, jointly issued on May
16, 2013 by the IASB and the FASB, the Board discussed issuing a Request for Views to solicit
input from Japanese constituents.

c.

As a step towards issuing an exposure draft, the Board discussed drafting a proposal for a practicalsolution on accounting for transactions that deliver the company’s own stock to employees
through a shareholding plan or to employees who are granted a right to shares through trusts.

d.

With a view to finalizing the Business Combinations standard, the Board discussed the treatmentof negative capital surpluses (treatment at the end of interim reporting periods on a consolidationbasis), and the treatment of entities accounted for using the equity method (associates andnon-consolidated subsidiaries), as well as accounting for incremental purchases and partial sales.

(2) 267th Meeting (held on June 27, 2013)
a. Responses to the IASB’s Exposure Draft Financial Instruments: Expected Credit Losses
b. Overview of the IASB’s Exposure Draft Leasesc. Overview of the IASB’s Feedback Statement Discussion Forum—Financial Reporting Disclosurepg. 2
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d. Release of Exposure Draft of PITF Practical Solution on Transactions of Delivering theCompany’s Own Stock to Employees etc. through Trusts [approval for release]e. Discussion on Progress Report on Deliberation on Intangible Assets
f. Discussion on Business Combinations (Step 2)
g. Establishment of Insurance Contracts Technical Committeea.

The Board discussed the draft comments on the IASB Exposure Draft Financial Instruments:
Expected Credit Losses.

b.

An outline (classification of leases, lessee accounting and lessor accounting) of the revised
Exposure Draft issued on May 16, 2013 by the IASB and the FASB was presented.

The Boardthen discussed the Exposure Draft.
c.

Staff presented an outline of the IASB’s Feedback Statement Discussion Forum—Financial
Reporting Disclosure issued by the IASB on May 28, 2013.

The Board then reviewed the

IASB’s short-term and mid-term responses.
d.

The Board reviewed the draft Exposure Draft of PITF Practical Solution on Transactions
Delivering the Company’s Own Stock to Employees etc. through Trusts.

All Board memberspresent at the meeting approved the draft, subject to minor editorial changes, which would be left
to the Chairman.
e.

The Board reviewed a draft of the “Progress Report on Deliberation on Intangible Assets” andsupported its publication.

f.

The Board discussed responses to comments received on the Business Combinations (Step 2)
Exposure Draft of, after being presented with staff recommendations.

g.

The Board approved the establishment of an Insurance Contracts Technical Committee, as well as
selection of the chairman and members of the technical committee.

(3) 268th Meeting (held on July 10, 2013)
a. Overview of a planned endorsement process of IFRS
b. Overview of the Accounting Standards Advisory Forum (ASAF)’s telephone conferencec. Progress of the Lease Accounting Technical Committee
d. Feedback statement on research on goodwill
e. Discussion on Business Combinations (Step 2)a.

Following the Business Accounting Council’s paper “The Present Policy on the Application ofInternational Financial Reporting Standards (IFRS),” issued on June 19, 2013, the Board waspresented with and discussed an outline of the planned IFRS endorsement process.

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b.

The Board was presented with an overview of the ASAF’s telephone conference, held on July 3,
2013, where the IASB’s Exposure Draft Financial Instruments: Expected Credit Losses was
discussed.

c.

In developing the ASBJ’s comment letter on the IASB’s revised exposure draft, the Board
discussed (1) whether to agree with the proposal that lessees should recognize all leases on thebalance sheet in principle, (2) whether to agree with the proposed criteria by which lessees shouldclassify leases with different cost patterns, and (3) whether to agree with the proposed criteria bywhich lessors should classify leases with different income patterns.

d.

With an aim to contribute to international debates, the ASBJ has conducted research on
impairment and amortization of goodwill.

A draft paper “Feedback Document on Questionnaireand Exchange of Views on Impairment and Amortization of Goodwill”, summarizing the inputs
obtained from constituents, was prepared.

The Board reviewed the draft paper and thenapproved its publication.
e.

With a view to finalizing the standard, the Board discussed responses to comments received on the
exposure draft, including the treatment of income taxes resulting from the partial sale of a parent’s
shares in its subsidiary and the treatment of transactions with non-controlling interests in separate
financial statements.

(4) 269th Meeting (held on July 25, 2013)
a. Report from the Standards Advisory Council
b. Progress of the Lease Accounting Technical Committeec. Establishment of Working Group for Endorsement of IFRSs
d. Discussion on Business Combinations (Step 2)
a.

The Standards Advisory Council, established within the Financial Accounting Standards
Foundation (FASF), submitted requests to the ASBJ for (1) a study on accounting for therecoverability of deferred tax assets and (2) a study and assessment of accounting relating to
restructuring.

b.

The Board discussed these requests.

In developing the ASBJ’s responses to the IASB’s revised exposure draft, the Board discussed (1)determination of whether a contract contains a lease, (2) lessees’ identification of components andallocation of consideration, (3) lessors’ identification of components in a contract and allocation of
the consideration, (4) short-term leases, and (5) variable lease payments.

c.

The Board approved the establishment of a Working Group, which will discuss topics in detail inproceeding with the process of IFRS endorsement in response to the recommendation from theBusiness Accounting Council.

The Board also approved the selection of the members of theWorking Group.
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d.

The Board had previously discussed the issues to be addressed in light of comments received on
its exposure draft.

With a view to finalizing the standard, the Board reviewed the draft

amendments to the Accounting Standard for Business Combinations and the Accounting Standard
for Consolidated Financial Statements.

3. ASBJ’s Comment Submissions to the IASB and the FASB (June 1, 2013 –July 31, 2013)(1)

ASBJ submitted its Comments on the Proposed Accounting Standards Update "Financial
Instruments ― Credit Losses (Subtopic 825-15)" to the FASB (June 18, 2013)(2)

ASBJ submitted its Comments on the Exposure Draft "Financial Instruments: Expected Credit
Losses" to the IASB (July 5, 2013)

4. The 18th Standards Advisory Council Meeting
On July 16, 2013, the 18th Standards Advisory Council Meeting was held.
The meeting began with a report on the establishment of the ASBJ “Rules for due process indeveloping accounting pronouncements”, followed by a presentation on the outline of the planned
process for the endorsement of IFRSs, to be conducted by the ASBJ.

The Council then discussed

several possible agenda items which had been suggested at previous meetings.

The Council

decided that (1) for ‘recoverability of deferred tax assets (in relation to the JICPA Audit Committee
Report No.66),’ ‘provisioning relating to restructuring’ and ‘accounting for additional retirement
benefits on early retirement’ the Council will request that the ASBJ conduct a study and assessmenton the impacts and on whether it is possible to develop any accounting pronouncements on the topics,(2) for ‘development of an accounting standard to be applied where the going concern assumption is
not appropriate,’ the Council will deliberate the topic after the Business Accounting Council
concludes the ongoing discussion about auditing of special-purpose financial statements, and (3)‘provision for points granted to customers’ is to be put on hold.
The Council also received suggestions for several new topics. One of them was ‘subsequent
events.’ This topic is already an agenda item of the ASBJ’s although discussions are currently on
hold.

Therefore, the Council will be given an update from the ASBJ on the project’s status at thenext Council meeting.

For ‘accounting treatment when a parent transfers its business to awholly-owned subsidiary by means of divestitures with no consideration transferred’ and ‘treatmentof contingent purchase consideration under the Accounting Standard for Business Combinations,’ theCouncil decided to request that the Practical Solutions Standing Committee assess these topics.
The ASBJ provided an update on its recent activities and ongoing projects.

The Council membersthen expressed their views and asked questions.
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5. Establishment of Working Group for Endorsement of IFRSs, Appointment ofMembers
The Business Accounting Council of the Financial Services Agency issued The Present Policy on the
Application of International Financial Reporting Standards (IFRS) on June 19, 2013.

The paperstates that “regarding the specific endorsement process in Japan, it is appropriate that the AccountingStandards Board of Japan (ASBJ), which has the capability of accounting standard development,
first examines the standards, and then the Financial Services Agency designates individual standards
in the same manner currently used to designate Japanese GAAP.”
In response to this recommendation, the ASBJ established a “Working Group for Endorsement of
IFRSs” to proceed with the endorsement process. Members are as follows.
Chairman:Atsushi Kogasaka

Board Member (Vice Chairman), ASBJ

Members:
Tomokazu Sekiguchi

Board Member, ASBJ

Shinichi Imakiire

Senior Manager, Finance & Accounting Department, Finance Group,
Hitachi, Ltd.

Harunaga Kato

Assistant General Manager, General Accounting Dept, Head of Accounting
Research Team, Sumitomo Corporation

Shuichi Takahata

Manager, Accounting Division, Mitsubishi Heavy Industries, LTD.

Naohiro Tomura

Group Manager, Accounting Group, Finance & Accounting Dept, Toshiba
Corporation

Shinichi Yamatoko

Senior Manager (Assistant General Manager), Financial Accounting & Tax
Dept. Accounting & Finance Div., Nippon Steel & Sumitomo Metal
Corporation

Makoto Kaimasu

Senior Vice President, The Securities Analysts Association of Japan

Goro Kumagai

Senior Fellow, Strategic Research Dept, Mizuho Securities Co., Ltd.

Kenichi Akiba

Professor of Commerce, Waseda University

Katsunobu Mandai

Professor, Faculty of Commerce and Management, Hitotsubashi University

Kanako Ogura

Partner, KPMG AZSA LLC

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Keiko Kishigami

Partner, Ernst & Young ShinNihon LLC

Kazuaki Furuuchi

Partner, Deloitte Touche Tohmatsu LLC

Takao Kamiya

Director of Technical Activities, ASBJ

Atsushi Itabashi

Director of Financial Activities, ASBJ

Yasunobu Kawanishi

Director of International Activities, ASBJ

Masayoshi Ogiwara

Translation Project Manager, ASBJ

Tsutomu Iguchi

Technical Manager, ASBJ

6. Appointment of Councillors, Directors, Auditors, and others
Based on votes at the Councilors Meeting held on 14 June 2013, the Board of Directors Meeting
held on 17 June 2013, and the Councillors Meeting held on 28 June 2013, the FASF announced theappointment of the following Councillors, Directors, Auditors, and others (new appointees areunderlined, titles are as of the date of appointment):
1. Councillors(11)(Councillors: Appointment effective 14 June 2013)(Chairman: Appointment effective 28 June 2013)
Chairman:Shozo Yamazaki

Chairman and President, the Japanese Institute of Certified Public
Accountants

Councillors:
Hideyoshi Ando

Professor, Faculty of Commerce, Senshu University

Kenjiro EgashiraProfessor, Waseda Law School

Koichiro Kimura

Chief Executive Officer, PricewaterhouseCoopers Aarata

Masakazu Kubota

Senior Managing Director, Keidanren

Atsushi Saito

Group CEO, Japan Exchange Group, Inc.

Yoshikiyo Sakai

Director and Senior Vice President, Director of Finance and Accounting
Department, NIPPON TELEGRAPH AND TELEPHONECORPORATION

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Koichi Takahata

Managing Executive Officer, Assistant General Manager, Financial
Resources Management Group, General Manager, Accounting Controlling
Dept., Sumitomo Corporation

Shigeru Nakajima

Attorney-at-Law

Yoshiaki Nishimura

President, Tokai Rubber Industries, Ltd.

Tsuguoki Fujinuma

Adviser, The Japanese Institute of Certified Public Accountants

2. Directors (11), Auditors (2)(Directors and Auditors: Appointment effective 14 June 2013)(President and Managing Director: Appointment effective 17 June 2013)
President:
Kazuaki Kama

Chairman of the Board, IHI Corporation

Managing Director:
Masaji Miyako

Secretary General, Financial Accounting Standards Foundation

Directors:
Hiromi Asano

Executive Director, the General Insurance Association of Japan

Futomichi Amano

Chief Executive Officer, Deloitte Touche Tohmatsu LLC

Gen Ikegami

Deputy President, the Japanese Institute of Certified Public Accountants

Shinsaku Iwahara

Professor, School of Law, Waseda University

Toru Okusa

Senior Executive Officer, MITSUBISHI ESTATE CO., LTD

Joji Okada

Representative Director, Senior Executive Managing Officer, Mitsui & Co.,Ltd.

Takashi Obinata

Professor, Faculty of Economics, the University of Tokyo

Masanobu Kaizu

Director, the Securities Analysts Association of Japan

Keiko Kitamura

Professor, Faculty of Commerce, Chuo University

Masahiko Koyanagi

Executive Director, Policy Making Headquarters, Japan Securities Dealers
Association

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Shinya Saito

Professor, Faculty of International Social Sciences, Yokohama National
University

Masaki Shizuka

Senior Executive Officer, Tokyo Stock Exchange, Inc.

Fumio Tokubutsu

Vice Chairman, The Life Insurance Association of Japan

Tatsuhiko Nojima

Representative Director, Executive Vice President, Mitsubishi Heavy
Industries, Ltd.

Tsutomu Miyagi

Managing Director, the Japan Chamber of Commerce and Industry

Hideki Miyazaki

Member of the Board, Executive Deputy President, Japan Tobacco Inc.

Kimitaka Mori

Deputy President, the Japanese Institute of Certified Public Accountants

Koshi Wada

Vice Chairman & Senior Executive Director, Japanese Bankers Association

Auditors:
Toru Kajikawa

Executive Director, the Japanese Institute of Certified Public Accountants

Shigeo Sakase

Senior Advisor, Hitachi, Ltd.

3. Standards Advisory Council (4)(Appointment effective 17 June 2013)
Vice Chairman:
Masaji Suzuki ※Partner, Deloitte Touche Tohmatsu LLC

Members:
Kanako Ogura

Partner, KPMG AZSA LLC

Keiko Kishigami

Partner, Ernst & Young ShinNihon LLC

Shimboku Hattori

General Manager, General Accounting Dept., Sumitomo Corporation※Mr. Masaji Suzuki was appointed as Vice Chairman through the nomination by Chairman of
the Standards Advisory Council, pursuant to Article 65, paragraph 4 of the FASF Constitution.

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4. Other Committees○

Nominating and Evaluating Committee (5)(Appointment effective 17 June 2013）

Chairman:Keiko Kitamura

Professor, Faculty of Commerce, Chuo University

Members:
Masakazu Kubota

Senior Managing Director, Keidanren

Masaki Shizuka

Senior Executive Officer, Tokyo Stock Exchange, Inc.

Tsuguoki Fujinuma

Adviser, The Japanese Institute of Certified Public Accountants

Kimitaka Mori

Deputy President, the Japanese Institute of Certified Public Accountants○

Due Process Oversight Committee (6)(Appointment effective 17 June 2013）

Chairman:Shinya Saito

Professor, Faculty of International Social Sciences, Yokohama National
University

Members:
Gen Ikegami

Deputy President, the Japanese Institute of Certified Public Accountants

Toru Okusa

Senior Executive Officer, MITSUBISHI ESTATE CO., LTD

Masanobu Kaizu

Director, the Securities Analysts Association of Japan

Masakazu Kubota

Senior Managing Director, Keidanren

Yoshiaki Nishimura

President, Tokai Rubber Industries, Ltd.

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“ASBJ Newsletter” (No. 34)
Issued on September 20, 2013
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: planning@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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