This document discusses accounting standards and IFRS-related initiatives in Japan. It notes that listed companies in Japan can use Japanese GAAP, US GAAP, or IFRS. The number of companies voluntarily applying IFRS has increased each year. The JICPA provides comments to the IASB and holds IFRS seminars and study groups. It also cooperates with the IFRS Foundation Asia-Oceania Office in Tokyo, which promotes IFRS application and supports sustainability standard-setting in the region.

1. Copyright © The Japanese Institute of Certified Public Accountants.
JICPA - AFA IFAC SMO Workshop7
on SMO7
May 24, 2022

2. Copyright © The Japanese Institute of Certified Public Accountants.
Agenda
1. Application of IFRS Accounting Standards in Japan
2. IFRS-related initiatives at JICPA
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Accounting standards Requirements, Application status, etc.
Japanese GAAP  Historically, most listed companies have used Japanese GAAP.
US GAAP  With the permission of the Commissioner of Financial Services
Agency (FSA)
Designated IFRS =
pure IFRS
 ‘Designated IFRS’ is a set of IFRS Accounting Standards that have
been designated by the Commissioner of the FSA.
 To date, all IFRS Accounting Standards have been so designated
prior to their effective dates.
Japan’s Modified
International
Standards (JMIS)
 JMIS was developed based on IFRS Standards with deletions and
modifications relating to amortization of goodwill and recycling
of other comprehensive income.
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1. Application of IFRS Accounting Standards in Japan
Accounting standards that listed companies in Japan can use

4. Copyright © The Japanese Institute of Certified Public Accountants.
1. Application of IFRS Accounting Standards in Japan
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Changes in the number of companies for voluntary application of IFRS Accounting Standards
27
61
85
125
161
198 213 226
15
27
30
27
32
16
11
10
20
26
19
11
11
10
7
0
50
100
150
200
250
300
2014 2015 2016 2017 2018 2019 2020 2021
Adopted Preparing Planning
108(+66)
141(+33)
171(+30)
204(+33)
225(+21)
234(+9)
243(+9)
42
Tokyo Stock Exchange Listed Companies: 3,730 companies
Note: Number of companies as of June 30 of each year

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1. Application of IFRS Accounting Standards in Japan
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① Adopted 41.6 %
309 Trillion Yen
③ Planning: 0.1 % / 1 Trillion Yen
② Preparing: 2.3 % / 17 Trillion Yen
⑤ Other 43.5%
322 Trillion Yen
④ Discussing: 12.5% / 93 Trillion Yen
①②③ in total 44%
327 Trillion Yen
⇒ 2.0% increase (year on year)
Note: Market capitalization as of June 30 2021
Market capitalization of Tokyo Stock Exchange Listed Companies: 742 Trillion Yen

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2. IFRS-related initiatives at JICPA
 Providing comments to IASB
 JICPA provides comments for most of EDs, DPs and RFIs of IASB such as
 ED Supplier Finance Arrangements (Proposed amendments to IAS 7 and
IFRS 7)
 DP Business Combinations-Disclosures, Goodwill and Impairment
 RFI Third Agenda Consultation
 IFRS-related activities
 IFRS seminar “IFRS Standards Update”
 IFRS Study Group led by Mr. Tatsumi Yamada, former IASB Board Member
 Cooperation with the IFRS Foundation Asia-Oceania Office
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7. Copyright © The Japanese Institute of Certified Public Accountants.
2. IFRS-related initiatives at JICPA
 IFRS Foundation Asia-Oceania Office
established in Tokyo in 2012 as first regional liaison office outside of London
headquarter
 Activities as the IFRS Foundation’s regional liaison office
 Promotion of IFRS application in Japan
 Support for IFRS application in the Asia-Oceania region
 Support for IASB Technical Activities
 New activities as the International Sustainability Standards Board (ISSB)’s
footprint
 Multi-location model
 The ISSB’s footprint in the Asia-Oceania region
 Participation in the ISSB’s standard-setting
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8. Copyright © The Japanese Institute of Certified Public Accountants.