Market Risk Disclosures: A Comparison between Companies in Japan and China

概要

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This paper presents a comparative analysis of market risk disclosure by Japanese and Chinese companies whose stocks are traded on New York Stock Exchange (NYSE) as American Depository Receipts (ADRs) as well as on stock exchange of their own home country. All the companies selected in this study made quantitative disclosures on Item 11 in their 20-F reports to the U.S. Securities and Exchange Commission (SEC).However, in Japan, only two companies made quantitative disclosures outside the financial statements and none of them disclosed information specified for market risks in their notes to the financial statements in their annual securities reports. In China, only one company made quantitative disclosures outside the financial statements in their A-shares reports and the number of companies making quantitative disclosures in the notes to the financial statements in the 20-F reports exceeded those in their Ashare reports. It appears that the Japanese companies disclose information specifically required by the SEC but not disclosing them anywhere else. It also appears that the Chinese companies don't disclose identical information in the U.S. and China although the financial statements reported in the U.S. used International Financial Reporting Standards (IFRS) and Hong Kong financial reporting standards and those reported in China used China's accounting standards which are similar to IFRS.