Fujitsu and Fujitsu System Solutions today announced the development of updated functionality to its complete accounting solution, GLOVIA/SUPER COMPACT Pathfinder, bringing it in line with the International Financial Reporting Standards (IFRS). The upgraded solution has been deployed at Nihon Dempa Kogyo Co., Ltd. (NDK), a leading Japanese manufacturer of quartz crystal devices. Fujitsu and Fujitsu System Solutions are supporting NDK in its preparations to adopt IFRS in financial reporting disclosure for the fiscal period ending March 31, 2010, when IFRS will start being used in Japanese financial markets.
While allowing NDK to meet the requirements in Japan to disclose their financial reports using both IFRS and Japanese accounting standards, the deployment of Fujitsu’s updated solution will enable the company to reduce the administrative burden of such parallel reporting requirements. As well, the solution will enable the preparation of consolidated public financial reports in accordance to both standards quickly and efficiently during the first fiscal year of IFRS adoption.
NDK is a global company that is expanding its business internationally in regions such as Asia, Europe, and North America, with more than half of its group companies located overseas. As such, the company started issuing its English-language annual reports using IFRS in March 2002 to ensure that its financial reports would be well-accepted by international investors and business partners, as well as maintain a smooth flow of credit from international financial markets. IFRS will be compulsory in Japanese financial markets starting in 2015, but NDK is aiming to adopt IFRS for the company’s financial reporting disclosures beginning with the fiscal period ending March 31, 2010. If NDK succeeds, it will be the first company in Japan to adopt IFRS.
For the first year in which Japan businesses can voluntarily adopt IFRS, companies are required to disclose financial information using both Japanese accounting standards and IFRS. Due to this requirement, changes required to information systems and business processes stemming from the switchover to IFRS are viewed as being very costly and time-consuming.
To resolve this problem, NDK chose to deploy Fujitsu’s upgraded solution, which enables the company to meet parallel disclosure requirements using both IFRS and Japanese accounting standards while making the process of consolidated financial reporting more efficient.
Previously, NDK published financial statements in its English-language annual report using IFRS, with its Japanese group companies generating data using Japanese standards which then is manually converted to IFRS. Similarly, its group companies outside of Japan initially generate their data using IFRS and manually convert the data to Japanese standards. In both cases, this process results in extra work. Consolidated financial reports are subsequently generated using both standards, and take approximately 90 days.
By deploying Fujitsu’s updated solution, NDK has minimized the time required to prepare consolidated financial reports, using both IFRS and Japanese standards, to approximately 30 days. Furthermore, the new features of the solution dramatically reduce any extra work, making the overall process more efficient.
Fujitsu plans to incorporate the IFRS-support features it developed for NDK into an early IFRS edition of GLOVIA/SUPER COMPACT Pathfinder, scheduled for release in July 2010. Fujitsu will also be releasing an update to accompany expected changes in the IFRS system in 2011.