084 Nippon Sheet Glass Company voluntarily disclosed financial statements based on IFRS
Nippon Sheet Glass Company voluntarily disclosed quarterly financial statements based on IFRS in the first quarterly report for the year ended March 2012. This is the forth case in Japan which disclosed them voluntarily, following Nihon Denpa Kogyo, HOYA, Sumitomo Corporation.
There could be seen a large impact on operating profit, which was 8,515 million yen in March 2011 (increased 137.9%), and 3,717 million yen in the first quarter of the year ended March 2011(increased 59.3%). Major difference between J-GAAP and IFRS that impacted the company’s financial statements were “goodwill”, which shall not be amortized in IFRS, thus decrease of the expense, and “actuarial difference” of the employee benefit accounting, which shall be recognized as other comprehensive income.
Judging from the above, it is quite difficult for investors to compare IFRS financial statements with non-IFRS financial statements as application of IFRS will alter the companies’ financial position and performance. Lack of comparability is crucial when you think about how they procure funds and other stuff in this global economy.
Tokyo Shoko Research conducted a survey on companies which consider voluntary application of IFRS, and it turned out that 105 companies answered positive about it. It is important for companies to understand the globalization in the accounting field and apply IFRS early and voluntarily. We expect them to take a lead on IFRS while Accounting Standards Board of Japan and Financial Services Agency are dragging the matter for long.
