Japan Creates Additional International Financial Reporting Standards

The Japan’s FSA clarified on 21^st September 2012 that the additional International Financial Reporting Standards have been created for utilization by entities that are using International Financial Reporting Standards in Japan on a voluntary basis.

The Financial Services Agency has added that all the pronouncements made by International Accounting Standards Board that were released up to 30^th June in 2012 have been incorporated in the list of designated International Financial Reporting Standards. Such International Financial Reporting Standards include:

Government loans - Amendment to International Financial Reporting Standards 1, which was issued in the month of March in 2012.

Annual Improvements to International Financial Reporting Standards 2009-2011 cycle, which was issued in the month of May in 2012.

Joint Arrangements, Consolidated Financial Statements, and Disclosure of Interests in Other Entities: - Transition Guidance - Amendments to IFRS10, IFRS11 and IFRS12, which were issued in the month of June in 2012.

As a result, the International Financial Reporting Standards designed for the use of entities that are using IFRSs on a voluntary basis have become very similar to the International Financial Reporting Standards that have been released by the International Accounting Standards Board on 30^th of June in 2012.

The International Accounting Standards Board had released Amendment to IFRS 1 (Government Loans), which addressed the manner in which the first-time IFRS adopter will be accounting for government loan with a low market rate at the time of transitioning to International Financial Accounting Standards.

On the other hand, in the month of May, IASB issued the ‘Annual Improvements 2009-11 cycle', which was basically a collection of the amendments made to the IFRS, in its response to the matters addressed at the 2009-11 cycle. The amendments will come into effect from 1^st of January 2013 and entities can also apply them earlier.

The IASB had also amended transition related guidance for International Financial Reporting Standards 10. The main purpose behind issuing those amendments was to alleviate the concerns related to the transition related needs of IFRS 10 ‘Consolidated Financial Statements’ as they created more burden that what had been expected.