® International Accounting Standards Board A set of slides to support our outreach activities 2006/7

® Outline The Vision Improved independence Convergence Stability Due Process and Responsiveness Principles versus Rules Measurement Our agenda

® The Vision … one single set of high quality global standards....used on the global capital markets.

® The Critics Threatening stability of … Fair value fixated Too theoretical Don’t understand our region’s situation … US dominated Not listening

® News 2005 / 2006 Formation of a Trustee Advisory Group New and more Trustees Revised constitution Due process Handbooks Changes within the Board New and more staff on board

® Independent standard setting Independent board members All board meetings in public Internet simulcast Thorough due process Improved oversight Private funding

® IASB’s structure 22 Trustees Standards Advisory Council IASB 14 board members 35 technical staff IFRIC National Standard Setters

® IASB 2001 – five years of progress IFRS established as the role model for financial reporting for listed companies A substantial up-grade of standards completed 2004 : the Stable Platform Global convergence is now in true progress  Workplan agreed US and Europe  Japan and China moving towards IFRS

® Convergence ! Attracting investment by transparency Supports cross-border investments Reducing cost of capital Reducing operational expenses US, China, Japan, others

® Stability - with responsiveness Only one major change a year No new major standard change mandatory before 2009 After approval of standard:  12 months before mandatory

® Opinions encouraged The IASB work program is public and open for discussion Working groups and round tables are now common Discussion papers more frequent Due process handbook published

® Thorough due process Issuance of new standards, changes of existing and interpretations done only after allowing for opinions from anyone interested Comment periods enhanced

® Thorough due process Research National Standard Setters Discussion Paper Exposure Draft Standard Others Comment analysis Comment analysis Effective Date

® Thorough due process Research National Standard Setters Discussion Paper Exposure Draft Standard Others Comment analysis Comment analysis Effective Date

® What do we look for in comment letters? Information  Did we miss something? Argument  Does the proposal improve decision- useful information?  Is the benefit in proportion with the costs?

® The Due Process “…they will have to learn to listen to my views…” Does it mean to obey? - or to listen, consider, form an opinion and decide?

® Thorough due process Research National Standard Setters Discussion Paper Exposure Draft Standard Others Comment analysis Comment analysis Effective Date

® Principle-based standards PrinciplesRules

® Few, if any, scope exceptions Few, if any, special provisions Consistency across the set of standards Explain reasoning for deviating from principles

® Principle-based standards Implications for  preparers  auditors  regulators

® Measurement Open roundtable discussions as part of the framework project to consider:  What are the available measurement attributes?  What information does each provide?  How should the IASB think about the choices?

® Measurement Present Fair Value Measurement project – how, not when or whether The Canadian FVM discussion paper – part of the Framework project

® Convergence with FASB A MOU agreed between IASB and FASB publicly supported by USA and Europe  Aiming to eliminate reconciliation Short to medium term projects with quick implementation Projects with a medium or long term view and requiring substantial work

® The Active Agenda Conceptual framework Revenue recognition Financial Statement Presentation Business combinations Liabilities Insurance Fair value measurement Financial instruments Leasing Pensions Consolidations Small and Medium sized entities Emission rights trading Short term convergence x 10

® The Research Agenda Financial instruments Derecognition Liabilities and equity Extractive activities Intangible assets

® The Conceptual Framework A guidance for the board when setting standards and support for preparers when lack of applicable standards Present framework established 1989 A joint IASB – FASB long term project  8 phases  Discussion paper published over the first phase Objectives and Qualitative Characteristics

® Small and Medium sized Entities Much asked for  SMEs = 95% of all companies Simplification of the big book  Stand alone document  Recognition and measurement simplifications Designed with a company of 50 employees in mind  Each jurisdiction decides who uses  Not for listed companies or financial institutions Exposure Draft to be published 2006  250 pages

® Global convergence - a value creating activity High quality common standards:  Better understanding  Lower expenses = Better investments

® The World is getting smaller RED = IFRS Approved ORANGE = Stated move to adoption YELLOW = Adapting to IFRSs IFRSs Around the World

® The Vision … one single set of high quality global standards....used on the global capital markets.

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