Press Conference by the Minister for Financial Services

(Excerpt)

April 18 , 2003

Q.

Yesterday the Accounting Standards Board of Japan (ASBJ) judged it difficult to freeze the mark-to-market accounting practice partially for the account settlement of the financial year ending in 2003, and some members of the ruling coalition agree to it. We would like to hear your view on this matter. The Financial Accounting Standards Foundation (FASF) is going to discuss the freeze action. Members of the ruling coalition proposed yesterday that the matter should be considered by the Government. What do you think of this?

A.

As you have just pointed out, I understand the ASBJ has confirmed that it will be difficult to revise the accounting standards after the closing day of the financial year ending in 2003 and apply the revision retrospectively because it will take some time for the ASBJ to consider the matter, even if such retrospective application is judged reasonable.

The ASBJ reached this conclusion presumably in view of the fact that the account closing work is nearly over. We hope solid discussions will be held by the ASBJ on such a realistic base.

As to the latter part of your question, to set universally fair and appropriate accounting standards is highly significant. A consensus that such fair and appropriate standards should be discussed by the ASBJ was seemingly formed a few years ago, and we have asked the ASBJ to have thorough discussions expected of it.

Q.

Some members of the ruling parties are of the opinion that a study of such fair and appropriate accounting standards should be made by the Financial System Council or Financial Services Agency instead of entrusting it to a private organization. What do you think of it?

A.

The Japan Federation of Economic Organizations and many other industry groups have given the ASBJ recognition, acknowledging that its discussions are quite fair and appropriate from the viewpoint of the whole society. So a study of such standards is not committed to a private organization, but highly public and social discussions are currently under way.

These discussions had been formerly conducted by the Business Accounting Council, but this was subjected to a strong social criticism on the ground that such discussions should be held by an independent organization from the government or a particular private business enterprise. As a consequence, the FASF was organized, and the ASBJ was formed. In view of this background, we should go on relying on this system.

But what must be done to further upgrade the fair and appropriate accounting standards? Such standards need constant evolution. So we expect the ASBJ to hold solid and continuous discussions from mid-and long-term perspective in future.

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