Japan proposes simplifying disclosure requirements
14 Jan 2014
The Financial Services Agency (FSA) of Japan has issued for public comment a proposal to simplify presentation and disclosure requirements in separate financial statement prepared under Japanese GAAP. The proposal was developed based on recommendations in the June 2013 report issued by the Japanese Business Accounting Council “The Present Policy on the Application of the International Financial Reporting Standards (IFRS)” (the "BAC report”).
Although the proposal would not affect presentation and disclosure of consolidated financial statements prepared in accordance with designated IFRSs in Japan (which are effectively IFRSs as issued by the IASB), this measure was included in the BAC report to promote further use of IFRSs by Japanese companies by reducing overall burden of financial reporting. Comments are requested by 14 February 2014, and the revisions could be effective for the fiscal year ending March 2014 (at the earliest).
This action by the FSA marks the visible progress of all of three major recommendations in the BAC report as follows:
| Recommendations in the BAC report | Status |
|---|---|
| 1. Increase the number of companies that can adopt designated IFRSs on a voluntary basis by eliminating certain eligibility requirements. | Implemented in October 2013. |
| 2. Introduce the endorsement process and 'endorsed IFRSs' in Japan, which may include limited amendments to IFRSs based on specific criteria. The 'endorsed IFRS' would be promulgated by the Accounting Standards Board of Japan (ASBJ) and to be approved by the FSA. The ‘endorsed IFRS’ would be available for voluntary adoption by Japanese companies. | The ASBJ is in the process of developing an exposure document to propose the first round of ‘endorsed IFRSs’, which covers IASB standards and interpretation before the end of 2012. The ASBJ aims to complete the first set before the end of 2014. |
| 3. Simplify the disclosure requirements in separate financial statements under Japanese GAAP. | Revisions are proposed in 14 January 2014, expected to be implemented by March 2014. |
For more information, please see:
- The proposal, available on the FSA’s website (in Japanese)
- Our June 2013 story on the BAC report
