Proceedings

In response to the issuance of the IAS Regulation by the European Union, on July
2003 UK Department of Trade and Industry (DTI) has approved a regulation that
permits, starting January 2005, all UK companies to use IFRS as an alternative to UK
GAAP, in addition to the European law requirement for listed companies to use IFRS
from 2005 in preparing their consolidated statements.
UK
joined
EEC
‘70s
IASC
founded
at
London
1995
EU
protocol -
guidance
to IAS
adoption
Figure 2. Timeline of IFRS adoption in the UK
EU
announces
plan to
require IAS
for listed
2000
The status of the UK convergence process with IFRS had been reconsidered on March
2004 in a Discussion Paper “UK Accounting Standards: A Strategy for Convergence
with IFRS”. The starting point was the impossibility to maintain on long run the use
of two sets of different accounting standards in the UK (UK GAAP and IFRS) so
alignment in necessary.
In addition, at the end of 2008, the ASB issued a UK standard on Improvements to
Financial Reporting Standards in order to maintain the convergence between UK
GAAP and IFRS. Overall, as indicated in the 2008/2009 Financial Reporting Council
Annual Report, the ASB remains committed to convergence; however, “the strategy
for achieving this remains under consideration. The ASB continued its efforts to
ensure that UK converged standards remain in line with their IFRS equivalents,
responding to circumstances arising from the current crisis as appropriate”. (FRC,
2009: 5). Also, late last year, ASB issued Improvements to Financial Reporting
Standards 2010 in order to maintain converge with IFRS.
However from 2012, UK GAAP is expected to be replaced with the IFRS for SMEs
and the Financial Reporting Standard for Smaller Entities (FRSSE) will remain in
place for those entities choosing to do so and subject to threshold criteria.
2.3 IFRS adoption in Japan
ASB
launched
convergence
with IAS
2001
For almost 30 years, Japanese entities prepared consolidated financial statements
according to Japanese GAAP and submitted those to the Japanese securities
commission. Until the foundation of Accounting Standards Board of Japan (ASBJ), a
governmental council was setting accounting standards. The use of US GAAP in
consolidated accounts, instead of Japanese GAAP is allowed for domestic companies
registered with the US SEC. US GAAP consolidated financial statements of the
current 35 companies can be used for Japanese reporting as well. Around
2005
All UK
companies
permitted
to use
IFRS
~ 948 ~
UK
government
uses IFRS
2008
Standard on
convergence
Standard on
convergence
2010
???
2012
UK GAAP is
expected to
be replaced
by IFRS for
SMEs