analysis of disclosure in “basic policy regarding …...other companies that have adopted ifrs (fy...

Analysis of Disclosure in “Basic Policy Regarding Selection of Accounting Standards”

Tokyo Stock Exchange, Inc.

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I. Background

Jun. 24, 2014 Japan Revitalization Strategy (Revised in 2014) 4) Promoting of an increase in the number of companies voluntarily adopting IFRS

Tokyo Stock Exchange will encourage listed companies to explain to investors their basic views on the selection of accounting standards (for example, whether they are considering adopting IFRS).

Nov. 11, 2014 Revision of Guidelines for Financial Results

Jun. 30, 2015 Japan Revitalization Strategy (Revised in 2015)

4) Further promotion of an increase in the number of companies voluntarily adopting IFRS

Listed companies disclose their progress in considering the adoption of IFRS in “Basic Policy Regarding Selection of Accounting Standards” of the financial results. The government will analyze this together with Tokyo Stock Exchange and disseminate the state of IFRS adoption to contribute to efforts among listed companies to consider transitioning to IFRS.

Request description on “Basic Policy Regarding Selection of Accounting Standards” in Financial Results

＜Guidelines for Financial Results＞

Adoption from Financial Results for FY-ended Mar. 31, 2015 (early adoption possible)

・Please describe basic policy regarding selection of accounting standards. ・For example, whether you are considering the adoption of IFRS. （stage of consideration, scheduled adoption date）

II. Scope of Analysis

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Coverage：3,194 companies

TSE-listed companies that provided description in Basic Policy Regarding Selection of Accounting Standards (hereinafter ”Basic Policy”) of financial results：3,193 companies

FY ended March 2015：2,308 companies FY ended April 2015 ~ FY ended December 2015：885 companies

Other companies that have adopted IFRS (FY ended January 2016 ~ FY ended February 2016)：1 company

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Ⅲ. Content of Analysis of IFRS Adoption

1. Categories of Companies in Analysis（P.5）

2. Shift in Number of Companies That Have Adopted IFRS（P.6）

3. Number and Market Cap of Companies That Have Adopted IFRS（P.7～8）

4. IFRS Adoption by Industrial Sector（P.9～13）

5. IFRS Adoption Date（P.14）

6. Stage of Progress Among "④ Companies Considering IFRS Adoption"（P.15）

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Categories of companies included in analysis （3,194 companies）

① Companies that have adopted IFRS（74 companies） Companies that submitted IFRS-based consolidated financial statements or quarterly

consolidated financial statements by Mar. 31, 2016

② Companies that have decided to adopt IFRS（32 companies） Companies whose executive body has disclosed, by Mar. 31, 2016, its decision

to adopt IFRS

③ Companies planning to adopt IFRS（22 companies） Companies whose executive body has described plans to adopt IFRS in its Basic Policy,

but yet to decide on IFRS adoption

④ Companies considering IFRS adoption（213 companies） Companies that described that it is considering IFRS adoption in its Basic Policy

⑤ Other companies（2,853 companies） For example, the following companies:

Ⅲ－1. Categories of Companies in Analysis

Company that mentioned only the possibility of future adoption of IFRS Companies that mentioned only its current accounting standards

0

20

40

60

80

100

120

Jun 30 2014 Dec 31 2014 Mar 31 2015 Aug 31 2015 Mar 31 2016

③Companies planning to

adopt IFRS

②Companies that have

decided to adopt IFRS

①Companies that have

adopted IFRS

27

15

38

14

Number of companies

42

52

38

21

68

23 73

112

Ⅲ－2. Shift in Number of Companies That Have Adopted IFRS

35

128

22

32

74

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The combined number of “① Companies that have adopted IFRS”, ”② Companies that have decided to adopt IFRS”, and “③ Companies planning to adopt IFRS” is 128 companies as of Mar. 31, 2016.

+16 companies since previous announcement

Number of companies

Market capitalization

① Companies that have adopted IFRS

74 companies JPY 85 trillion

② Companies that have decided to adopt IFRS


③ Companies planning to adopt IFRS


④ Companies considering IFRS adoption


⑤ Other companies 2,853 companies JPY 262 trillion

Total 3,194 companies JPY 486 trillion

JPY 140 trillion (128 companies)

The combined market capitalization of “① Companies that have adopted IFRS” and ”② Companies that have decided to adopt IFRS” and “③ Companies planning to adopt IFRS” is JPY 140 trillion (128 companies).

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Ⅲ－3. Number and Market Cap of Companies That Have Adopted IFRS

Note: Market capitalization as of Mar. 31, 2016.

The combined market capitalization of “① Companies that have adopted IFRS” and ”② Companies that have decided to adopt IFRS” and “③ Companies planning to adopt IFRS” is JPY 140 trillion, 27% of the entire listed market capitalization (JPY 518 trillion).

① Companies that have adopted IFRS JPY 85 trillion (74 companies) ：16%

①～③ JPY 140 trillion (128 companies)：27%

② Companies that have decided to adopt IFRS

③ Companies planning to adopt IFRS

④ Companies considering IFRS adoption

⑤ Other companies

JPY 19 trillion (32 companies)：4%


JPY 84 trillion (213 companies) ：16%

JPY 262 trillion (2,853 companies)：51%

Not included in analysis


All TSE-listed companies JPY 518 trillion (3,494 companies) ⇒ ＋3% since previous

announcement

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Ⅲ－3. Number and Market Cap of Companies That Have Adopted IFRS

Note: Market capitalization as of Mar. 31, 2016.

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Rubber Products (4/19)

Pharmaceutical (13/65)

Information & Communication

(12/376) Wholesale Trade

(10/319) Foods

(6/125)

①Adopted ②Decided to adopt

(2) Sumitomo Rubber Industries (5) Sumitomo Riko

(1) Takeda Pharmaceutical (2) Astellas Pharma (3) ONO PHARMACEUTICAL (5) Eisai (6) CHUGAI PHARMACEUTICAL (8) DAIICHI SANKYO (9) Mitsubishi Tanabe Pharma (12) SANTEN PHARMACEUTICAL (18) Sosei Group (42) GNI Group

(2) KDDI (4) SoftBank (5) Yahoo Japan (8) NEXON (15) KONAMI (24) ITOCHU Techno-Solutions (115) Infoteria (204) Fusion Partners (235) Hotto Link

(1) Mitsubishi (2) MITSUI (3) ITOCHU (4) SUMITOMO (5) Marubeni (9) Hitachi High-Technologies (13) Sojitz (29) ITOCHU ENEX (44) KANEMATSU

(1) JAPAN TOBACCO (2) Asahi Group Holdings (3) Suntory Beverage & Food (13) NH Foods

③Planning to adopt

(1) BRIDGESTONE (3) Yokohama Rubber

(4) Otsuka Holdings (10) Kyowa Hakko Kirin (19) SAWAI PHARMACEUTICAL

(1) NTT DOCOMO (3) NIPPON TELEGRAPH AND TELEPHONE (6) NTT DATA

(19) AUTOBACS SEVEN (4) Ajinomoto (5) Kirin Holdings


（A） JPY 4.3 trillion JPY 21.6 trillion JPY 37.5 trillion JPY 11.1 trillion JPY 12.9 trillion

Total market cap of

industrial sector（B）

JPY 4.9 trillion JPY 28.5 trillion JPY 52.5 trillion JPY 21.1 trillion JPY 24.9trillion

（A/B） 87% 76% 71% 53% 52%

Ⅲ－4. IFRS Adoption by Industrial Sector

By industrial sector, "① Companies that have adopted IFRS“, "② Companies that have decided to adopt IFRS“, and "③ Companies planning to adopt IFRS" are found in 23 of the 33 industrial sectors.

Industrial sectors that have a significant number of "① Companies that have adopted IFRS" and "② Companies that have decided to adopt IFRS" and "③ Companies planning to adopt IFRS" are: Electric Appliances (20), Pharmaceutical (13), Information & Communication (12), Transportation Equipment (11), Services (11), and Wholesale Trade (10).

⇒ ＋1 industrial sector since previous announcement

Note: (1) Market capitalization as of Mar 31, 2016. (2) Numbers to the left of company names indicate the order of their market capitalization within the industrial sector.

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Oil & Coal Products (1/13)

Precision Instruments (4/51)

Electric Appliances (20/262)

Chemicals (8/209)

Transportation Equipment (11/97)


(1) JX Holdings (1) HOYA (21) Noritsu Koki

(6) Hitachi (7) Panasonic (11) SYSMEX (14) TOSHIBA (15) FUJITSU (16) RICOH (20) SEIKO EPSON (26) KONICA MINOLTA (30) BROTHER INDUSTRIES (41) ADVANTEST (47) Hitachi Kokusai Electric (53) TOSHIBA TEC (59) CLARION (63) ANRITSU (142) SUMIDA (147) NIHON DEMPA KOGYO (160) TEAC (208) NISHISHIBA ELECTRIC

(1) Kao (5) NITTO DENKO (8) Mitsubishi Chemical Holdings (17) TAIYO NIPPON SANSO (19) Hitachi Chemical (64) The Nippon Synthetic Chemical Industry (66) KUREHA

(2) HONDA MOTOR (4) DENSO (22) TS TECH (26) KEIHIN (29) F.C.C. (30) NISSIN KOGYO (32) KYB (35) SHOWA (54) YUTAKA GIKEN (59) Yachiyo Industry


(4) NIKON (15) NIKKISO

(9) NIDEC (19) NEC

(10) NIPPON PAINT HOLDINGS (10) Mazda Motor



Total market cap of industrial

sector（B） JPY 2.4 trillion JPY 8.1 trillion JPY 54.6 trillion JPY 30.3 trillion JPY 53.3 trillion

（A/B） 45% 31% 27% 23% 21%


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Metal Products (2/85)

Services (11/379)

Glass & Ceramics Products (2/58)

Other Financing Business (3/29)

Retail Trade (5/338)


(1) LIXIL Group (4) DENTSU (5) Rakuten (7) M3 (16) DeNA (23) COOKPAD (26) NEXT (35) TechnoPro Holdings (41) BELLSYSTEM24 HOLDINGS (46) SEPTENI HOLDINGS (51) OUTSOURCING

(1) Asahi Glass (10) Nippon Sheet Glass

(2) Japan Exchange Group (8) Hitachi Capital (14) J Trust

(2) FAST RETAILING (26) SKYLARK (51) COLOWIDE (64) Toridoll


(12) G-TEKT (117) Metaps (79) OHSHO FOOD SERVICE



Total market cap of


JPY 3.7 trillion JPY 25.3 trillion JPY 4.2 trillion JPY 7.8 trillion JPY 33.0 trillion

（A/B） 21% 20% 19% 17% 13%


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Iron and Steel (1/46)

Real Estate (3/113)

Securities & Commodity Futures (2/42)

Machinery (6/230)

Nonferrous Metals (1/34)


(3) Hitachi Metals

(5) Iida Group Holdings (32) TOSEI

(3) SBI Holdings (11) Monex Group

(8) NSK (11) Hitachi Construction Machinery (21) MIURA (29) DMG MORI SEIKI (40) Hitachi Koki (54) TSUBAKI NAKASHIMA

(14) Asahi Holdings


(10) NTT URBAN DEVELOPMENT



Total market cap of


JPY 5.6 trillion JPY 14.1 trillion JPY 5.1 trillion JPY 22.7 trillion JPY 3.5 trillion

（A/B） 9% 7% 7% 7% 2%


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Land Transportation (1/58)

Construction (1/167)

Other Products (1/108)


(21) Hitachi Transport System (33) DUNLOP SPORTS


(26) TOSHIBA PLANT SYSTEMS & SERVICES


（A） JPY 0.2 trillion JPY 0.1 trillion JPY 0.03 trillion

Total market cap of industrial

sector（B） JPY 21.5 trillion JPY 15.2 trillion JPY 8.3 trillion

（A/B） 1% 1% 0.4%

10 industrial sectors with no company transitioning to IFRS and size of industrial sector

( unit: companies )

Air Transportation

Mining Fishery,

Agriculture & Forestry

Insurance Marine

Transportation Electric

Power & Gas Pulp & Paper

Warehousing & Harbor

Transportation Services

Textiles & Apparels

Banks

5 7 11 12 14 23 24 36 53 86


Adoption/Scheduled adoption date

(including quarters within the range)

Companies that have

adopted IFRS

Companies that have decided to adopt IFRS

Companies planning to adopt IFRS

Total

～ March 2015 62 －－ 62

April 2015 ～ March 2016 10 9 － 19

April 2016 ～ March 2017 2 16 8 26

April 2017 ～ March 2018 － 3 4 7

April 2018 ～ March 2019 － 1 5 6

April 2019 ～－－ 1 1

TBD － 3 4 7

Total 74 32 22 128

Ⅲ－5. IFRS Adoption Date

The scheduled adoption dates (including targeted) that "③ Companies planning to adopt IFRS (22 companies)" have described in their Basic Policy are as follows.

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0 10 20 30 40 50 60

Others

Unification of closing dates

Consideration of transitioning process

Establishment of internal structure

Development of accounting policies

Collecting information

Acquisition of knowledge on accounting standards

Analysis of differences in accounting standards

Impact studies/analysis

Preparation of manual and guidance 58

42

5

7

13

Ⅲ－6. Stage of Progress Among "④ Companies Considering IFRS Adoption"

2

10

50

38

34

Of the 213 companies that were “considering IFRS adoption”, 158 companies described concrete matters in its Basic Policy. Many described "Preparation of manual and guidance“.

15 Note: Total exceeds 158 due to descriptions falling under multiple categories.

analysis of disclosure in “basic policy regarding …...other companies that have adopted ifrs (fy...

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