Convergence of Accounting Standards in Japan

Japan's Financial Services Agency issued a report earlier this week on the convergence of accounting standards and securities regulations. The FSA states that as it moves forward "fair and transparent markets" are necessary. It notes that Japanese companies could face difficulties raising capital in other markets if Japanese accounting standards are not accepted in those markets. Japan is looking to the convergence of accounting standards between the U.S. and the E.U. and the upcoming equivalence assessment by the E.U. and is attempting to reach convergence on some items by early 2008. The FSA also stated that it will work with the EC to develop a monitoring process to move toward mutual recognition.