If you want a strong argument why IFRS matters and ...

... we need to stop it becoming a political debate you need only visit Japan, where I have spent the last week.

Japan is one of the world’s largest economies (probably now 3^rd behind the USA and China but with a smaller population than both those countries) yet seems to have been sidelined in the European ‘squabbles’ over IFRS and the ‘will they/won’t they adopt IFRS’ debate in the USA.  Japan is committed to adopting IFRS so that the accounts of Japanese companies (and it has some very large multinationals) can be comparable to those of all other major companies – in Europe, the USA and globally.

It is a mature positive approach and conversion from Japanese GAAP to IFRS is a major topic of debate by all the accounting firms, and major corporates, in Japan – and was raised with me at every meeting I have had in the past few days.

They don’t understand why IFRS has become such a political issue – nor why individual countries or regions expect IFRS to be adapted to deal with their own political or regulatory issues.  Why should Japan have different accounting standards because US, UK or other banking regulators want something different for their own purposes?  Why can’t regulators use other powers they have to get the information they need rather than expect global accounting standards to be adapted to suit them?

Governments, regulators and accounting standard setters need to fully appreciate that we are seeking to have one single set of high quality global accounting standards – and this involves obligations to others.

I salute the Japanese.

 Standards & Regulators  0 Comments January 22nd, 2010