Tokyo markets are sorting out accounting issues and other limits encountered by the data format, with an eye toward compatibility with international reporting standards.

The eXtensible Business Reporting Language (XBRL) has started to take hold since first being adopted in Japanese markets in 2008, and is removing the need to re-enter data into a more workable format, as well as gaining acceptance by Japan's accounting standards body, said Makoto Shibata, principal analyst in the e-business and IT initiatives division at The Bank of Tokyo-Mitsubishi UFJ, who presented a case study at the Tokyo Financial Information Summit sponsored by Incisive Media.

"XBRL enabled faster provision of information to investors," he said. "XBRL data can be captured and new methods can be used for online analysis."

Accounting issues have been a challenge for XBRL adoption, said Shibata. Discrepancies have been a problem, sometimes because of different interpretations of data, based on XBRL, and in response the Japan Accounting Association set accounting procedures for preparing XBRL data, and will begin putting these into practice, he added.

XBRL had been limited to just certain types of financial information in Japanese markets, according to Shibata, but is now being promoted for accounting, as he explained, and for pricing data and corporate sustainability reports. "By using XBRL, there will be more effective and efficient analysis or re-use of this information," he said. "But it's limited so far, because the analytical tool has yet to be developed and the methodology of the analysis is not well developed either."

In Japan, corporate actions are still largely done on paper, and therefore are another function that calls for application of XBRL, said Shibata. To that end, Japan is turning to US organizations such as DTCC and Swift for help in standardizing XBRL's use to handle corporate actions. "They will develop a taxonomy or standard process," he said. "They will experiment with how they can handle and proceed with the process." This effort will also require identifying all the stakeholders in this transition and working with them, according to Shibata.

Adoption of XBRL in Japan is also a key step toward meeting international financial reporting standards (IFRS), as Shibata sees it. Japanese markets had been due to implement IFRS by 2015, but recently postponed this goal to 2017. Still, eventual implementation of IFRS is inevitable, he believes. "I'm sure IFRS will be adopted, so the corporate side needs to be prepared," he said. "IFRS will be a growing burden for multi-national companies because they need to really adapt and adjust to a different system."