How many listed companies use IFRS Standards?

A new analysis by the IFRS Foundation shows that more than 25,000 of the approximately 48,000 domestic listed companies on the 85 major securities exchanges in the world use IFRS Standards. And of the companies that do not use IFRS Standards, over 80 per cent are listed in China, India, Japan, and the United States.

Of the approximately 2,500 foreign listed companies on those 85 major securities exchanges, the analysis has, so far, identified more than 1,000 of those companies using IFRS Standards.

The analysis reflects a combination of data on use of IFRS Standards as reported in the IFRS jurisdiction profiles and data on the number of domestic and foreign listed companies reported by the two global organisations of securities exchange—the World Federation of Exchanges and the Federation of European and Asian Stock Exchanges.

 

The following data are as of December 2015 (for a few exchanges the WFE or FEAS data is for an earlier month in 2015):

Number of member exchanges Number of listed companies
World Federation of Exchanges 58 45,923
Federation of European and
Asian Stock Exchanges
27 4,433
Totals 85 50,356

The tables below categorise those 50,356 listed companies as to whether they use IFRS Standards. Developing the tables required some assumptions, which are set out after the tables. We believe that the margin for error due to those assumptions is small and does not materially affect the IFRS adoption picture presented on this web page.

Reasonable overall observations based on the data in the tables below are that:

  • More than 25,000 of the approximately 48,000 domestic listed companies on the 85 major securities exchanges in the world use IFRS Standards. And of those domestic listed companies that do not use IFRS Standards, over 80 per cent are listed in China, India, Japan, and the United States.
  • Of the approximately 2,500 foreign listed companies on the 85 major securities exchanges, we are aware of more than 1,000 of those companies using IFRS Standards. We are working to develop better data on the other cross-border listings.

Table 1 shows the financial reporting frameworks used by domestic listed companies on the WFE and FEAS exchanges:

Table 1 Domestic Listed Companies

DOMESTIC LISTED COMPANIES 31 DECEMBER 2015
Number of member exchanges Number of domestic listed companies IFRS Standards required for all or most companies IFRS Standards permitted or required for at least some (but not all or most) companies IFRS Standards neither required nor permitted for any companies —use local standards Accounting framework unknown— no profile
World Federation of Exchanges 58 43,406 21,273 3,752 * 18,303 78
Federation of European and Asian Stock Exchanges 27 4,412 3,550 0 250 612
Totals 85 47,818 24,823 3,752 18,553 ** 690

* Of these, 112 Japanese companies and 149 Swiss companies use IFRS Standards.

** Of the 18,553 companies, 14,886 (80 per cent) are listed in China, India, Japan, and the United States.

Table 2 Domestic Listed Companies Adjusted for Japan and Switzerland

Among the 85 WFE and FEAS exchanges, the use of IFRS Standards by domestic listed companies is an option, rather than a requirement, in Bermuda, Japan and Switzerland. Table 2 adjusts the data in Table 1 to count as IFRS users the domestic companies in Japan and Switzerland that use IFRS Standards. Currently, we do not have similar data for Bermuda. Because there are only 14 domestic listed companies in Bermuda, we believe Table 2 presents an accurate picture of the use of IFRS Standards by domestic companies on the world’s largest securities exchanges:

DOMESTIC LISTED COMPANIES 31 DECEMBER 2015
Number of member exchanges Number of domestic listed companies Number of companies using IFRS Standards Number of companies not using IFRS Standards Number of companies accounting framework unknown—
no profile
World Federation of Exchanges 58 43,406 21,534 21,794 78
Federation of European and Asian Stock Exchanges 27 4,412 3,550 250 612
Totals 85 47,818 25,084 22,044 690
Per cent 100% 52.5% 46.1% 1.4%

 

Table 3 Foreign Listed Companies

Table 3 shows the financial reporting frameworks used by foreign listed companies (ie cross-border listings) on the WFE and FEAS exchanges:

FOREIGN LISTED COMPANIES 31 DECEMBER 2015
Number of member exchanges Number of foreign listed companies IFRS Standards required for all or most companies IFRS Standards permitted or required for at least some (but not all or most) companies IFRS Standards neither required nor permitted for any companies —use local standards Accounting framework unknown—no profile
World Federation of Exchanges 58 2,517 251 2,246 * 13 7
Federation of European and Asian Stock Exchanges 27 21 10 4 0 7
Totals 85 2,538 261 2,250 13 14

* We are aware that approximately 500 of these companies are users of IFRS Standards whose securities trade in the United States, and another 250 companies are mainland China companies that use IFRS Standards for listings in Hong Kong. Adding these 750 companies to the 261 foreign listed companies known to be using IFRS Standards brings the total foreign listed companies known to be using IFRS Standards to over 1,000.


Assumptions and other comments

The jurisdiction profiles group the jurisdictions as to their use of IFRS Standards into three categories, as follows:

  • IFRS Standards required for all or most domestic listed companies.
  • IFRS Standards permitted or required for at least some (but not all or most) domestic listed companies.
  • IFRS Standards neither required nor permitted for any domestic listed companies – companies must use local standards.

Our profiles have similar categories for foreign listed companies.

Both the WFE and FEAS report separately, for each securities exchange, (a) the number of domestic listed companies and (b) the number of foreign listed companies. Some jurisdictions have different accounting requirements for domestic and foreign listed companies.

Among the WFE and FEAS jurisdictions, one – Saudi Arabia – requires IFRS Standards only for financial institutions, but not all listed companies. Saudi Arabia is classified as ‘IFRS Standards permitted or required for at least some (but not all or most) companies’. Saudi Arabia is in process of adopting IFRS Standards as a requirement for all listed companies effective in 2017. For now, our tabulation of the number of listed companies using IFRS Standards does not include the Saudi companies.

Four of the WFE jurisdictions (Argentina, Israel, Mexico, and Peru) require IFRS Standards for all listed companies other than financial institutions. The number of financial institutions is small relative to the number of non-financial listed companies, but we do not currently have the data to remove the financial institutions from the total IFRS count.

Some jurisdictions require IFRS Standards for domestic companies but permit (rather than require) foreign listed companies to use IFRS Standards or their home accounting standards or some other financial reporting framework. For those jurisdictions, we have accurate data for the number of domestic listed companies using IFRS Standards but not for the number of foreign listed companies using IFRS Standards because we do not know which financial reporting framework the foreign listed companies have chosen. However, the number of foreign listed companies tends to be relatively small in most jurisdictions. We are working to get better data on the choices that foreign listed companies have made.

Many jurisdictions have small securities exchanges that are not members of the WFE or FEAS. The data in the tables above reflect only the number of companies listed on WFE and FEAS member exchanges. Companies listed on many of the small exchanges also use IFRS Standards, but they are not included in the tables above.

We have not yet developed IFRS profiles for several of the jurisdictions whose exchanges are members of WFE or FEAS, so they are not included in our tabulations. Those jurisdictions are:

  • World Federation of Exchanges. We do not have a profile for Kazakhstan. Note that the Kazakhstan Stock Exchange is a member of both WFE and FEAS.
  • Federation of European and Asian Stock Exchanges. We do not have a profile for Iran, Kazakhstan, Kyrgyzstan, or Montenegro.

Securities exchanges in those three jurisdictions together list 378 companies (371 domestic and 7 foreign).

25 July published on: http://www.ifrs.org/Features/Pages/How-many-listed-companies-use-IFRS-Standards.aspx