International Convergence of Accounting Standards: 'Hot Topics' and Constituents' Views in Japan

31 Pages Posted: 30 Jan 2007

See all articles by Sei-Ichi Kaneko

Sei-Ichi Kaneko

Security Analysts Association of Japan

Ann Tarca

University of Western Australia

Date Written: January 16, 2007

Abstract

The aim of this study is to identify key issues for convergence of Japanese and international accounting standards and to present constituents' views about these topics. We investigate the financial impact of requirements relating to fair value measurement, comprehensive income items, leases and business combinations in the financial statements of 50 large listed Japanese firms at 31 March 2005. This analysis provides the setting for our report of the views of Japanese preparers and users of financial statements about convergence of Japanese and international accounting standards, following convergence initiatives over the period 1997-2005. A survey of 974 members of the Securities Analysts Association of Japan indicated support for convergence and the use of fair value measurement, disclosure of comprehensive income, recognition of leases and use of the purchase method for consolidation. Our financial analysis of firms shows that these topics are relevant for many firms. We report support from both preparers and users for several positions favoured by the International Accounting Standards Board (IASB), a positive signal for achieving convergence goals in Japan.

Keywords: International Accounting Standards Board, Accounting Standards Board of Japan, convergence, fair value measurement, comprehensive income, leases, business combinations

JEL Classification: M41, M44, M47, G29

Suggested Citation

Kaneko, Sei-Ichi and Tarca, Ann, International Convergence of Accounting Standards: 'Hot Topics' and Constituents' Views in Japan (January 16, 2007). Available at SSRN: https://ssrn.com/abstract=960182 or http://dx.doi.org/10.2139/ssrn.960182

Sei-Ichi Kaneko

Security Analysts Association of Japan ( email )

2-1, Nihonbashi-Kabutocho
Chuo-ku
Tokyo, 103-0026
Japan

Ann Tarca (Contact Author)

University of Western Australia ( email )

Business School
35 Stirling Highway
Crawley WA 6009
Australia
+61 8 6488 3868 (Phone)
+61 8 6488 1047 (Fax)

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