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International
Accounting Standards
Board
Convergence with IFRS Convergence with IFRS
around the World:around the World:
IASB activities UpdateIASB activities Update
Tatsumi YamadaTatsumi Yamada
Board Member, Board Member, IASBIASB
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DisclaimerDisclaimer
Expressions of individual views by
members of the IASB and its staff are
encouraged. The views expressed in this
presentation are those of the speaker.
Official positions of the IASB on
accounting matters are determined only
after extensive due process and
deliberation.
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OutlineOutline
Objectives of IASBObjectives of IASB
Convergence efforts (EU, USA, Convergence efforts (EU, USA,
Canada, China, Canada, China, KoeraKoera and Japan and Japan
etc)etc)
Three new projectsThree new projects
Stability of Stability of IFRSsIFRSs & enhanced & enhanced
consultation consultation
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Objectives of IASBObjectives of IASB
Development of a Development of a single setsingle set of high quality, of high quality,
understandable and enforceable global understandable and enforceable global
accounting standards that require accounting standards that require high high
quality, transparent and comparablequality, transparent and comparable
information in financial statements;information in financial statements;……
Bringing about Bringing about convergenceconvergence of national of national
accounting standards and IFRS to high accounting standards and IFRS to high
quality solutionsquality solutions
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Achieving Convergence Achieving Convergence
with IFRS Worldwidewith IFRS Worldwide
Put emphasis on achieving relationship Put emphasis on achieving relationship
with regionally and worldwidewith regionally and worldwide
Deletion of Deletion of ““liaison countriesliaison countries”” (June (June
2005)2005)
Regional Interaction:Regional Interaction:
Regular meeting with NSS in the regionRegular meeting with NSS in the region
South East Asia, China/Japan/Korea etcSouth East Asia, China/Japan/Korea etc
World Standards setters meeting:World Standards setters meeting:
Five annual meetings since November 2002Five annual meetings since November 2002
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EU adoption of IFRSEU adoption of IFRS
European CommissionEuropean Commission’’s IFRS s IFRS
RegulationRegulation
Passed in 2002Passed in 2002
Requires all EU companies listed on EU Requires all EU companies listed on EU
regulated markets to prepare first full regulated markets to prepare first full
consolidated IFRS accounts for 2005consolidated IFRS accounts for 2005
Member States may extend to 2007 forMember States may extend to 2007 for
companies using US GAAP
companies with only listed debt
Option to require IFRS for other Option to require IFRS for other
companiescompanies
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Convergence project with USConvergence project with US
A focus is convergence with US A focus is convergence with US
FASBFASB
Norwalk Agreement aims to Norwalk Agreement aims to
achieve convergence in short and achieve convergence in short and
long term (October 2002) long term (October 2002)
MoUMoU related to SEC Roadmap is related to SEC Roadmap is
second step of Norwalk Agreement second step of Norwalk Agreement
(February 2006)(February 2006)
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Convergence project with US Convergence project with US
AgreementAgreement
SEC SEC ‘‘road maproad map’’ –– removal of removal of
reconciliation to US GAAPreconciliation to US GAAP by 2009, by 2009,
provided conditions are metprovided conditions are met
April 2005 April 2005 –– SEC/EC agreed on SEC/EC agreed on ‘‘roadmaproadmap’’
Progress of convergence by 2008Progress of convergence by 2008
TargetTarget
Not necessary to achieve full Not necessary to achieve full
convergence on all standardsconvergence on all standards
Working jointly and making progress on Working jointly and making progress on
major projects by 2008 (major projects by 2008 (MoUMoU))
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Convergence project with US Convergence project with US
FASB FASB –– ‘‘MoUMoU –– Short termShort term’’
Segment reportingSegment reportingSubsequent eventsSubsequent events
Joint venturesJoint venturesResearch and Research and
developmentdevelopment
Government grantsGovernment grantsInvestment propertiesInvestment properties
Income tax (with FASB)Income tax (with FASB)Income tax (with IASB)Income tax (with IASB)
Impairment (with FASB)Impairment (with FASB)Impairment (with IASB)Impairment (with IASB)
Borrowing costsBorrowing costsFair value optionFair value option
IASB examinationIASB examinationFASB examinationFASB examination
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Convergence with US Convergence with US
FASB FASB –– ‘‘MoUMoU –– Other projectsOther projects’’
To have issued converged To have issued converged
guidance guidance
Fair Value Fair Value
MeasurementMeasurement
To implement work aimed at the To implement work aimed at the
completed development of completed development of
converged standards as a matter converged standards as a matter
of high priority of high priority
ConsolidationsConsolidations
To have issued converged To have issued converged
standards (projected for 2007) standards (projected for 2007)
Business Business
CombinationsCombinations
Progress to achieve by 2008Progress to achieve by 2008ProjectProject
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Convergence with US Convergence with US
FASB FASB –– ‘‘MoUMoU –– Other projectsOther projects’’
To have issued one or more due To have issued one or more due
process documentsprocess documents
PostPost--retirement retirement
benefits (inc. benefits (inc.
pensions)pensions)
To have issued one or more due To have issued one or more due
process documents on the full process documents on the full
range of topicsrange of topics
PerformancePerformance
ReportingReporting
To have issued one or more due To have issued one or more due
process documentsprocess documents
Liabilities / Liabilities /
equityequity
Progress to achieve by 2008Progress to achieve by 2008ProjectProject
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Convergence with US Convergence with US
FASB FASB –– ‘‘MoUMoU –– Other projectsOther projects’’
To have issued one or more due To have issued one or more due
process documents relating to the process documents relating to the
accounting for financial accounting for financial
instrumentsinstruments
F Instruments F Instruments
(replace (replace
existing existing
standards)standards)
To have issued a due process To have issued a due process
document relating to the results of document relating to the results of
staff research efforts staff research efforts
DerecognitionDerecognition
To have issued one or more due To have issued one or more due
process documentsprocess documents
Revenue Revenue
RecognitionRecognition
Progress to achieve by 2008Progress to achieve by 2008ProjectProject
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Convergence with US Convergence with US
FASB FASB –– ‘‘MoUMoU –– Other projectsOther projects’’
To have considered and made a To have considered and made a
decision about the scope and decision about the scope and
timing of a potential agenda timing of a potential agenda
project project
LeasesLeases
To have considered the results of To have considered the results of
the the IASBIASB’’ss research project and research project and
made a decision about the scope made a decision about the scope
and timing of a potential agenda and timing of a potential agenda
project project
Intangible Intangible
assetsassets
Progress to achieve by 2008Progress to achieve by 2008ProjectProject
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Convergence Effort in Convergence Effort in
CanadaCanada
Strategy announced in January 2006Strategy announced in January 2006
Separate strategies for major Separate strategies for major
categories of entitiescategories of entities
For public companies, converge For public companies, converge
Canadian GAAP with IFRSCanadian GAAP with IFRS
US GAAP as an alternativeUS GAAP as an alternative
5 year transition then “big bang”5 year transition then “big bang” (2011)(2011)
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Convergence Project with Convergence Project with
ChinaChina
June 2005 June 2005 –– China agrees to make up an China agrees to make up an
action plan to achieve highaction plan to achieve high--quality quality
accounting standards accounting standards
October 2005 October 2005 –– IASB staff was in China to IASB staff was in China to
discuss Chinese discuss Chinese EDsEDs for convergencefor convergence
November 2005 November 2005 –– the 1the 1stst convergence convergence
meeting including IASB Board membersmeeting including IASB Board members
February 2006 February 2006 –– issuance of new standards issuance of new standards
substantially converged with IFRS in main substantially converged with IFRS in main
principles (effective from January 2007 for principles (effective from January 2007 for
listed companies)listed companies)
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Convergence Effort in Convergence Effort in
KoreaKorea
February 2006 February 2006 –– establishment of establishment of ‘‘IFRS IFRS
convergence task forceconvergence task force’’ to d
