1. The following points summarize the situation surrounding International Financial Reporting Standards (IFRS).

• A growing number of countries have been adopting IFRS.
• The International Accounting Standards Board (IASB) is shifting its focus from bilateral relations to multilateral relations, concerning its study framework.
• The IASB has slowed down the pace of developing standards and is focusing more on studying conceptual framework.
• In Japan, an increasing number of companies have been voluntarily applying IFRS.
• It is not clear whether the United States will adopt IFRS.

Under the circumstance described above, Japan should take the following measures.

2. Under the current international situation, it is necessary to maintain the current system in Japanese market where JGAAP, IFRS and U.S.GAAP coexist. At the same time, measures should be taken to expand the voluntary application of IFRS.

3. As for JGAAP, its quality needs to be maintained at a high level.

4. As for IFRS, a endorsement process for evaluating the validity of each standard should be introduced.

5. In terms of consideration of IFRS, Japan should continue to express "All Japan" opinions through the Accounting Standards Board of Japan (ASBJ) and other channels so that Japan's opinions will be sufficiently reflected.

6. The following measures should be implemented to expand the voluntary application of IFRS.

• (a) The ASBJ should develop domestic guidelines on IFRS application
• (b) Auditors should deal with IFRS application in a flexible manner
• (c) Sharing of practical tasks for IFRS application should be promoted
• (d) The Financial Services Agency needs to ease requirements for IFRS application

7. Currently in Japan, financial disclosure stipulated by the financial instruments and exchange act requires both consolidated financial statements and non-consolidated financial statements. In order to ensure international consistency, the disclosure stipulated by the act should be based only on consolidated statements. As for non-consolidated disclosure, disclosure under the corporation law should be utilized.