The International Accounting Standards Board and the Accounting Standards Board of Japan announced that they have started talks about a joint project to minimize differences between international financial reporting standards and Japanese accounting standards.

In a meeting Tuesday, the two boards discussed how to proceed with the joint project and agreed to launch the project as soon as possible.

IASB chair Sir David Tweedie applauded the move, which he called a "major boost for the convergence of accounting standards worldwide."

"I believe that in developing global capital markets, it is important that major accounting standard-setters around the world co-operate in reducing differences between standards as much as possible. We will work on the project from the perspectives of both co-ordination of domestic systems and the contribution to the establishment of an international order," said ASBJ chair Prof. Shizuki Saito.

The London-based IASB began operations in 2001 with the goal of developing a single set of global accounting standards. According to the board, some 35 countries presently require the use of international standards for all domestic listed companies; six other countries require the use of international standards for some companies; and many countries base their national practices on international standards. In 2002, several jurisdictions, including Australia, the European Union and Russia, announced that they would require the application of international standards on or before Jan. 1, 2005.

The IASB and the Financial Accounting Standards Board, which sets accounting rules in the United States, agreed in September 2002 to work towards the convergence of existing U.S. and international practices and the joint development of future standards.

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