The Accounting Standards Board of Japan was made in 2001 and it has issued many accounting standards. The board also offers guidance and documents that will address accounting standards issues. In 2005, the ASBJ worked with the International Accounting Standards board to achieve convergence for the Japanese GAAP and the International Financial Reporting Standards. In 2006, the convergence project was launched. In 2007, the IASB and ABSJ have made the Tokyo Agreement. It states that by 2008, the differences between the Japanese GAAP and IFRS will be eliminated.
The Tokyo Agreement in 2007 came in three categories. These were short-term, medium-term and long-term. There is a clear schedule for these three categories. The target date was 2011 and the project plan is geared towards ensuring that the Japanese accountancy will accept the international approach in accounting and will make the new standards effective.
The continuous effort of improving and converging accounting standards in Japan will benefit them greatly. With everyone on the same page, reports will be easily understood and mistakes can be easily identified. Other countries should make sure that they also have a uniform accounting standard.
The change in accounting standards will greatly affect accounting courses as well. Hence, there is a need for this project plan to be put into effect already so that students can learn the new accounting standards to practice. Those accounting students who are still in the middle of these changes may need to start updating their accounting practices once the new standards are put into effect.