The International Accounting Standards Board (IASB) and the Accounting Standards Board of Japan (ASBJ) today announced their agreement to launch a joint project to reduce differences between International Financial Reporting Standards (IFRSs) and Japanese accounting standards. Phase 1 of this project is the first step towards the final goal of convergence of their standards. Today's agreement follows the announcement of October 12 2004, when both boards agreed to examine differences between IFRSs and Japanese accounting standards. Both boards believe that this effort will promote further international convergence to high quality accounting standards and will contribute to the development of global capital markets.
Specific elements of the agreement include:
1. The boards will identify and assess differences in their existing standards on the basis of their respective conceptual frameworks or basic philosophies with the aim of reducing those differences where economic substance or market environments such as legal systems are equivalent.
2. The boards will address the differences in their respective conceptual frameworks. This will take place later in the project, as a separate subproject, at a time agreed by the boards.
3. The boards will consider their respective due process requirements in arriving at agreement.