Global Standards for the world economy

Thursday 19 September 2019

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 Use of IFRS Standards in Japan continues to grow

 29 July 2016


As of 30 June 2016, 141 companies representing nearly 30 per cent of the Tokyo Stock Exchange (TSE) market capitalisation have adopted or plan to adopt IFRS Standards, according to a TSE analysis. The 141 companies include 115 that have already adopted or are in the process of adopting IFRS Standards, and 26 that have publicly stated they plan to adopt IFRS Standards.

The TSE analysis also shows that an additional 233 companies (19 per cent of the TSE market capitalisation) have stated in their most recent financial statements that they are considering whether to move to IFRS Standards.

By comparison, in December 2012 only 10 Japanese companies were using IFRS Standards.

Currently, companies in Japan are permitted to use four different accounting frameworks:

  • IFRS Standards: Virtually all listed companies and unlisted companies preparing consolidated financial statements for listing purposes are permitted to use IFRS Standards. (This means IFRS Standards as designated by the Commissioner of the Financial Services Agency. To date, all IFRS Standards have been designated before their effective dates.)
  • Japanese GAAP as issued by the Accounting Standards Board of Japan (ASBJ): Historically, most listed companies have used Japanese GAAP.
  • Japan’s Modified International Standards (JMIS): Accounting Standards Comprising comprising IFRSs IFRS Standards and the ASBJ modifications. JMIS was developed based on IFRS Standards with deletions and modifications determined by the ASBJ.
  • US GAAP: Japanese listed companies may use US GAAP with the permission of the Commissioner of the Financial Services Agency.

The TSE’s analysis of the use of IFRS Standards by their listed companies may be found here.

The IFRS Foundation’s profile on use of IFRS in Japan is available here.