Members of the Financial Accounting Standards Board held a two-day meeting this week with officials from the Accounting Standards Board of Japan how they could better align accounting rules.
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The meeting on Monday and Tuesday was the 12th in a series of discussions between the two national standard-setting boards, which are now meeting on a biannual basis. They also come in the context of a delayed decision by the Securities and Exchange Commission on whether it will incorporate International Financial Reporting Standards into the U.S. financial reporting system.
On Thursday, the Trustees and Monitoring Board of the IFRS Foundation, who oversee the International Accounting Standards Board, issued reports on changes in governance and strategy at the international organizations, putting extra pressure on the U.S. to support IFRS, saying they would re-examine which countries would be permanent members of the IASB (see IFRS Groups Release Key Reports).
During the meetings this week in Norwalk, Conn., Japanese accounting standard-setters said they support the efforts by FASB and the IASB to develop a single set of high-quality global accounting standards by converging U.S. GAAP with IFRS. Like FASB, the ASBJ is working on convergence between Japanese GAAP and IFRS.
During the meeting, FASB and the ASBJ provided updates to one another on their convergence efforts with the IASB. The ASBJ also explained its comments on the IASB’s planned agenda to U.S. officials. Furthermore, FASB and the ASBJ exchanged views on various accounting standards projects, including the credit impairment model for financial assets, classification and measurement of financial instruments and insurance contracts, hedge accounting, revenue recognition, leases and investment companies.
“Our ongoing dialogue with the ASBJ has led to a deeper appreciation of the issues that both the U.S. and Japan face in working toward our common goal of developing high-quality, comparable accounting standards,” FASB chair Leslie F. Seidman said in a statement. “Our discussions this week were very informative and will help us achieve that goal.”
Representatives of the two national standard-setting boards agreed that their ongoing discussions are useful in promoting mutual understanding on the significant items to be improved with the IASB that will contribute to subsequent deliberations at FASB and the ASBJ and to the future development of high-quality accounting standards. The ASBJ and FASB agreed they would continue to exchange views on accounting issues and potential future concerns.
“In times of changing environments of global accounting standards, we had constructive discussions with the representatives of the FASB regarding financial instruments, revenue recognition and leases, most of which are of high interest to Japanese constituents,” said ASBJ chairman Ikuo Nishikawa. “We believe that the discussions in this meeting contribute to the finalization of convergence projects between the FASB and the IASB and the development of high-quality global standards.”
The next joint meeting will take place in Tokyo during the second half of the year.