INTERNATIONAL FINANCIAL REPORTING STANDARDS Jennifer Tam Lynn Wang Mike Zaretsky Erin Larson Ashish Jain

Audience “Institutional investors are pension funds, mutual funds, money managers, insurance companies, investment banks, commercial trusts, endowment funds, hedge funds, and some hedge fund investors. They account for half of the volume of trades on the New York Stock Exchange. They move large blocks of shares and have tremendous influence on the stock market's movements. Institutional investors are considered to be knowledgeable and, therefore, less likely to make uneducated investment.” Source: Investopedia.com

Message  IFRS is for YOU  Benefits of IFRS include:  Cost savings  Comparability  Confidence  Transparency

Media  Print media  Institutional Investor magazine and others  Wall Street Journal  Internet  Information “hub” at Web site address identified in print ads  Automatically receive mobile/electronic news and updatesnews and updates

Deficiencies in U.S. GAAP  Rules-based accounting provides loopholes and makes companies less accountable

Deficiencies in U.S. GAAP  Investor confidence is at all-time low  No one else follows it – higher cost, less comparability  Lower Income by allowing LIFO

IFRS Overview  A set of country-neutral accounting standards that continue to evolve  Over 100 countries require or permit IFRS

IFRS Rocks  Cost savings and increased earnings  Single set of global accounting standards  International comparability  Improve investor confidence by suggesting proper accounting treatments

Increased Earnings  LIFO not allowed – this will force companies to report accurate and higher earnings

Increased Earnings  Revaluation of PPE (Property, Plant, and Equipment) allowed  Most Leases would be classified as Operating Leases

Increased Earnings  Significantly shorter than full IFRS for small and medium sized entities (SMEs) (95% of all companies will be covered)

Cost Savings  Lower Cost of Capital – global comparability among companies will provide them with access to worldwide capital  A single set of financial standards - less time to prepare and fewer resources needed worldwide

Questions?

Sources    AICPA webcast “What IFRS Means to You”  reporting/index.jhtml reporting/index.jhtml  _GAAP_basics_Jan09/$file/IFRS_v_GAAP_basics_ Jan09.pdf _GAAP_basics_Jan09/$file/IFRS_v_GAAP_basics_ Jan09.pdf