Contents
The Impact of Voluntary IFRS Adoption on Japanese Public Companies / Yoshiaki ; Ozawa 1
Abstract 1
I. Current Status of Voluntary Adoption of IFRS in Japan 2
II. Historical Background of IFRS Adoption in Japan 4
III. Major Differences between JP GAAP and IFRS 6
(1) Revenue recognition 7
(2) Employee benefits 7
(3) Depreciation methods of fixed assets 7
(4) Amortization and impairment testing of goodwill 8
(5) Fair value measurement of financial assets 8
(6) Recoverability of deferred tax assets 8
(7) Provisions for special repairs under JP GAAP and Tax 8
(8) Accrued vacation pay 9
(9) Customers loyalty programs 9
(10) Capitalization of research and development cost 9
IV. Why do Japanese Public Companies Voluntarily Adopt IFRS? 10
(1) Advantages of voluntary IFRS adoption from the external standpoint 10
(2) Advantages of voluntary IFRS adoption from the internal standpoint 11
V. IFRS First-Time Voluntary Adoption for Japanese Public Companies 12
VI. Empirical Analysis of 19 Public Companies which have Voluntarily Shifted from JP GAAP to IFRS 13
(1) Optional exception of cumulative exchange differences at first-time adoption 16
(2) Depreciation method and useful year 17
(3) Employee benefits 18
(4) Non-amortization of goodwill 18
(5) Accrued vacation pay 18
(6) Capitalization of research and development cost 18
(7) Provisions for special repairs 19
(8) Revenue recognition 19
VII. Conclusion 19
References 21