1. ® International Accounting Standards Board The Future of International Financial Reporting Sir David Tweedie IASB Chairman

2. ® Need for Convergence Attracting investment through transparency Reducing the cost of capital Increasing world-wide investment Reducing costs

3. ® IASC Developments Improvements Project

4. ® IASC Developments Improvements Project IOSCO Agreement

5. ® IASC Developments Improvements Project IOSCO Agreement The Restructuring

6. ® IASB Structure 19 Trustees Standards Advisory Council IASB IFRIC National Standard Setters

7. ® IASC Developments Improvements Project IOSCO Agreement The Restructuring EU 2005

8. ® IFRS Around the World IFRS Around the World CountriesChange Total in 2005 in 2006 in 2006 IFRSs permitted23 023 IFRSs required65+166 (for all domestic companies) IFRS required 6 0 6 (for some domestic companies) 94 +195

9. ® Role of National Standard Setter Deal with national issues Align agenda Influence IASB debate Lead on certain issues

10. ® The Agenda Improvements IFRS I

11. ® Grandfather Standards Insurance Extractive Industries

12. ® Share Based Payments Company not party to transaction Employees do not provide services No cost to company EPS hit twice Adverse economic consequences

13. ® FASB/IASB Agreement Remove differences Align Agendas Interpretation

14. ® Convergence Short-term Differences IASB – -Business combinations (goodwill/brands, acquisitions, IPR&D) - Asset Disposals and Discontinued Operations (IFRS 5) - Provisions (soon)

15. ® Convergence FASB - -EPS -Voluntary changes in accounting policy -Exchanges of non-monetary assets -Inventory spoilage and idle capacity - Share options

18. ® Conceptual Framework Issues The objectives of financial reporting Qualitative characteristics Definitions of assets and liabilities Recognition Measurement Presentation

19. ® DR = CR

20. ® Dr =Asset or Expense

21. ® Dr =Asset or Expense or Whatsit

22. ® Reconciliation Plan – Short Term IASB - Borrowing costs - Government grants - Joint ventures - Segments Joint- Impairment -Income Taxes

23. ® Reconciliation Plan – Short Term FASB-Fair value option -Investment properties - R&D -Subsequent events Joint-Impairment -Income taxes

24. ® Reconciliation – Major Projects Business combinations Consolidations/SPV Financial Instruments Derecognition Fair value measurement Revenue Recognition

25. ® Reconciliation – Major Projects (cont) Liability and Equity Leases Intangibles Performance Reporting Pensions

26. ® Performance Reporting  Statements  Comprehensive income/Cash flows  Recycling  Remeasurement MD&A

27. ® Pensions £m Deficit10 Less 10% of liabilities 4 6 Spread over 10 year working life Deficit per accounts - £600,000

28. ® Problems for IASB Principles v rules

29. ® Problems for IASB Principles v rules Acceptance of Standards  EU  SEC

30. ® Problems for IASB Principles v rules Acceptance of Standards  EU  SEC Enforcement

31. ® Other Projects Insurance Financial Risk Disclosure (IASB) SMEs (IASB)

32. ®