Minister for Financial Services announced mandatory application of IFRS delayed

On June 21st, Minister for Financial Services Shozaburo Jimi spoke that Mandatory application should not take place from the business year ending March 2015, at the very least, and a sufficient time period of five to seven years should be required for preparation if and after mandatory application is decided.
This means that the mandatory application should be no earlier than March 2016 ending with five to seven years preparation even if it is decided to within next few months.
Some of the reasons are the delay of convergence project and the outbreak of the unprecedented Great East Japan Earthquake and tsunami.

There should be many aspects to be considered for IFRS application and can be cost-involved. It can be practically difficult for mandatory application from 2015 considering the effect of the earthquake.

However I believe the application can be delayed but never cancelled if we review the situation Japan faces in the global circumstances.
Mostly economic industries raise objections for IFRS application. In fact IFRS is much different in some aspects which may bring a company’s economic conditions.

The Japanese accounting standards now become much closer to IFRS than they used to be. The change approaching to the global standard can be made even though mandatory application would be questioned.

The matter does not change the reality of a company whether IFRS is applied or not.
An accounting principle is just a measurement to measure the financial status of a company.

Some Japanese have objections for market principle, but the values and risks of assets or liabilities may not be distinguished even though market principle would not be applied.
Differences between accounting principles may have theoritical or caltural backgrounds the societies have, but it is necessary to be measured with the same standard on the same page in such circumstances where a company is related to the world in many aspects.

The other concern to me is ‘Japan passing’ which has already come up before the great earthquake.
Japan can never exist without international relationships because it has few natural resources and the domestic market has become matured.
In such a circumstance the fact may limit the future activities of companies that Japanese financial statements are prepared with unique accounting standards.

Some Japanese say it is not appropriate to enforece IFRS to a company who may not raise funds from international capital markets.
However all companies raise funds from someone else, and they may have funds from other ones, then ultimately from all over the world.
If Japan would stay on the unique accounting standards, captails may leave who avoids Japan, which may reduce even domestic capitals.

I want to believe the comment of the Minister of Financial Services just meant the realictic response to the effects of the earthquake and just the delay of the application.
I hope they continue considering internationalization of Japan otherwise Japan will be left behind the global trend.