Japanese Government Announces Delay of IFRS Adoption
Shozaburo Jimi, the Minister of Financial Services Japan has announced that the mandatory application of IFRS to all the Japanese listed companies will be postponed for a while. It is projected that there will be 2 to 4 year delay in IFRS adoption. He has also announced that in the event Japan requires IFRS, there would be a grace period of 5 to 7 years prior to mandatory adoption.
Due to the disaster that hit Japan in March earlier this year, the prompt recovery of the industry has become the focal point rather than the adoption of IFRS. There has also been opposition from some parts of Japanese industrial sectors to adapt IFRS to listed companies in the market.
Another factor that affected this decision is the change in adapting the IFRS policy in the US. The US SEC has released a paper regarding the introduction of IFRS to US accounting standards. According to this paper, the US has confirmed that they will not adapt IFRS, but rather incorporate some factors of IFRS into US accounting standards. They believe that after 5 to 7 years, American companies will be in accordance with both the IFRS and US accounting standards. In order to maintain the Sarbanes-Oxley Act and the sovereignty of FASB as the regulator of accounting standards, the US will keep the current US accounting standards as defined by law.
With the decision by the Japanese government to postpone the mandatory application of IFRS, Japanese companies will have a longer preparation time until the full introduction of IFRS. We, at Meisei, are going to take advantage of this extra time by training more accountants in IFRS as well as English language training.
HLB Meisei Audit Cooperation is a member firm of HLB International.
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