1. ® International Accounting Standards Board Accounting Standards Board of Japan and its Contribution to International Accounting Standards Tatsumi YAMADA Liaison Board Member, International Accounting Standards Board Japan

2. ® International Accounting Standards Board Accounting Standards Board of Japan and its contribution to International Accounting Standards International Accounting Standards Board Tatsumi Yamada

3. ® World Congress of Accountants Hong Kong 2002 Accounting Standards Board of Japan (ASBJ) Established on July 26, 2001, as a private sector standards setter Reorganization of IASC in 2001  Counterpart as a liaison country Support and proposals by market participants

4. ® World Congress of Accountants Hong Kong 2002 Structure of ASBJ Trustees (16) Board of Directors (14) Auditors (2) Accounting Standards Board of Japan Directors (14) (ASBJ) Board Members (13) Technical Staff (17) Technical Committee ※ Theme Advisory Council (16) Composition of ASBJ 3-preparers 5-Users(Analysts) * 3-Auditors 3-Academics * Including the members from Stock Exchange, banking and insurance sector Secretariat (10 ） ・ Administration ・ Accounting ・ Disclosure ・ Public Relations ※ For each agenda project, a Technical Committee will be formed as a working group.

5. ® World Congress of Accountants Hong Kong 2002 Organization of ASBJ Technical Committees Treasury Stock, Earning Per Share, Stock Options, Financial Instruments, Leases, etc. Standing Committees - Practical Solutions - International Issues

6. ® World Congress of Accountants Hong Kong 2002 ASBJ’s Standards Setting 3 types of documents Statement / Guidance / PITF Invite Comments by Exposure Drafts Meetings of the Board and Special Committees are open to the public Publication of final decision (60% vote ) and dissenting views

7. ® World Congress of Accountants Hong Kong 2002 Tasks of ASBJ (1/2) To investigate and develop generally accepted accounting standards in Japan To investigate practices concerning corporate finance and disclosure to make pertinent recommendation To contribute to the development of a high-quality internationally accepted accounting standards

8. ® World Congress of Accountants Hong Kong 2002 Tasks of ASBJ (2/2) To study and research the concepts and philosophies on which the development of accounting standards is based To conduct basic research to inventory Japanese existing rules of accounting standards in Japan

9. ® World Congress of Accountants Hong Kong 2002 Current Activities of ASBJ (1/2) International contribution  Providing input to IASB Liaison member  Providing comments to IASB  Attending Liaison Countries’ Meeting

10. ® World Congress of Accountants Hong Kong 2002 Current Activities of ASBJ (2/2) International contribution  Critical Issues  Business Combination  Performance Reporting  Longer-term financial instruments (former JWG)

11. ® World Congress of Accountants Hong Kong 2002 Current development of Accounting Standards Accounting “ Big Bang”- Standards have undergone tremendous developments in Japan in the past 5 years. The result has been a dramatic improvement in their quality, in line with IAS.

12. ® World Congress of Accountants Hong Kong 2002 Current Developments of Japanese Accounting Standards (1/3) 1. Revision of Consolidated Financial Statement Principles (June 1997) ⇒ IAS 27 and 28 2. Accounting Standards on Cash Flow Statements (March 1998) ⇒ IAS 7 3. Accounting Standards on Interim Reporting (March 1998) ⇒ IAS 34 4. Accounting Standards on Research and Development Costs (March 1998) ⇒ IAS 38

13. ® World Congress of Accountants Hong Kong 2002 Current Developments of Japanese Accounting Standards (2/3) 5. Accounting Standards on Post-Employment Benefits (June 1998) ⇒ IAS 19 6. Accounting Standards on Tax Effect Accounting (Income Tax) (October 1998) ⇒ IAS 12 7. Accounting Standards on Financial Instruments (January 1999) ⇒ IAS 32 and 39

14. ® World Congress of Accountants Hong Kong 2002 Current Developments of Japanese Accounting Standards (3/3) 8. Revision of Accounting Standards on Foreign Currency Denominated Transactions and Translation (October 1999) ⇒ IAS 21 9. Impairment of assets (August 2002) ⇒ IAS 36 10. Accounting for EPS (September 2002) ⇒ IAS 33

15. ® World Congress of Accountants Hong Kong 2002 Short-term Agenda (1/2) 1. Accounting standard required by implementation of the new consolidated tax return system 2. Implementation guidance for the impairment accounting standard 3. Fixed assets accounting (except for impairment accounting)

16. ® World Congress of Accountants Hong Kong 2002 Short-term Agenda (2/2) 4. Accounting standard for stock options 5. Implementation guidance for the business combinations 6. Accounting standard for lease transactions

17. ® World Congress of Accountants Hong Kong 2002 Convergence of accounting standards ASBJ’s mission and task Must deal with domestic systems Commercial Code, Tax requirement Eventual goal- Convergence

18. ® International Accounting Standards Board Thank You ! International Accounting Standards Board Tatsumi Yamada