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IFRS in Japan

Takahiro Nagafune Tokio Marine & Nichido Fire insurance Co., Ltd.

October 10, 2011

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IFRS in Japan

1. Introduction

2. Implementation

3. Future

4. Insurance

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IFRS in Japan1. Introduction

An interim Report by Financial Services Agency (FSA) (June, 2009)

- Voluntary implementation of IFRS

- Mandatory implementation of IFRS

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IFRS in Japan1. Introduction

An interim Report by FSA (June, 2009)

1) Voluntary Implementation - Date: Starting from March, 2010

- Entities: Listed Companies

- Consolidated Financial Report Only

Japanese Standards are applied to;

- Single Report

- Taxation

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IFRS in Japan1. Introduction

2) Mandatory Implementation - Final decision is to be made in 2012

- Consolidated reports of all listed companies

- At one time or gradually

- At least three years for preparation

- Starting from 2015 at the earliest

An interim Report by FSA (June, 2009)

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IFRS in Japan2. Implementation

1) Benefits for a company - Reduction of funding cost

- Improvement of efficiency

- Improvement of competitiveness 　

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IFRS in Japan2. Implementation

2) Number - A company (as of March, 2010) 　 - Three companies (as of March, 2011) 　 - None of financial institutions

- Among 3,600 listed companies

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IFRS in Japan2. Implementation

3) Difficulties Companies are concerned about;

- a lot of time and cost to prepare for the implementation

- double standards after the implementation

- IFRS for a consolidated report

- JFRS for single / taxation reports

Some companies will continue to use U.S. standards, which

are irregularly permitted by FSA.

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IFRS in Japan3. Future

1) Mandatory Implementation 　

(in the interim report as of June, 2009)

- Final decision is to be made in 2012 - At least three years for preparation - Starting from 2015 at the earliest

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IFRS in Japan3. Future

2) Mandatory Implementation

　 (comments by Minister of FSA as of June, 2011)

- Mandatory Implementation will start in or after 2016

- At least five years for preparation

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IFRS in Japan4. Insurance

1) IFRS for "Insurance Contracts" (IFRS 4)

- Various comments for the exposure draft are under consideration

- A revised exposure draft will be released in 2012

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IFRS in Japan4. Insurance

2) Other Issues Concerned

Other issues concerned with IFRS are;

- Supervisory Solvency Assessment

- ERM

Consistency between the frameworks

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IFRS in Japan4. Insurance

3) A company's preparation for IFRS

- Building databases

- Developing calculation systems

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IFRS in Japan4. Insurance

3) A company's preparation for IFRS 2008 2009 2010 2011 2012 2013

Stock databases

Flow databases

Calculation systems

Final

revision

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IFRS in Japan4. Insurance

4) Actuaries 16th EAAC

"Venture into Uncertainty"

"Capture Opportunities"

Each actuary will have to handle various issues on; - IFRS - Supervisory Solvency Assessment - ERM

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IFRS in Japan

Thank you.