22 Sep 2015 08:53am

Hike in Japanese companies adopting IFRS

The International Accounting Standards Board is close to winning over one of the last economies to withstand the IFRS juggernaut

Data released last week by the Tokyo Stock Exchange (TSE) show that the voluntary take-up among listed companies has improved dramatically in the past three years, with 112 companies stating in their accounting policies that they are planning to adopt IFRS at some stage (21 companies), that they have taken the decision to adopt (23) or have actually adopted them (68).

A further 194 companies said that they were considering IFRS adoption but have yet to decide.

In December 2012, there were just 10 Japanese companies using IFRS.

The numbers may still represent a tiny percentage of the 2,374 companies listed on the TSE but together the 112 that are actively using or about to use IFRS account for 24% of TSE market capitalisation (JPY607trn).

Although uptake is widespread across industrial sectors (22 out of 33), the most enthusiastic adopters are to be found in electrical appliances (18), information & communication (12) pharmaceutical (12), wholesale trade (10) and transportation equipment (10).

They include such companies as Mitsubishi, Yahoo Japan, Hitachi, Toshiba, Honda and Nikon.

Currently, companies can use four different accounting frameworks including IFRS, Japanese GAAP, US GAAP and the more recent Japan’s Modified International Standards (JMIS).

However, at the end of June, the Japanese government and the TSE adopted the revised “Japan Revitalisation Strategy” which commits listed companies to disclose their progress in considering the use of IFRS in their financial statements.

The regulators will analyse the information and publish the data “to contribute to efforts among listed companies to consider transitioning to IFRS”.

Welcoming the hike in IFRS uptake, International Accounting Standards Board chairman Hans Hoogervorst said that the “significant increase” demonstrated that “these companies find IFRS helpful for their international business activities”.

Julia Irvine


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