1. XBRL and Accounting Standards: A Canadian Perspective Paul Cherry Chair Accounting Standards Board

2. 2 Canada’s Decision to Adopt IFRS Improve access to capital Reduce cost of capital Make Canada more attractive to foreign investors and foreign businesses Facilitate financial reporting  External reporting  Internal reporting

3. 3 Canada’s IFRS Implementation Plan Canadian standards to be same as IFRS  No endorsement or carve-out mechanism Consider “unique” Canadian circumstances Mandatory only for “publicly accountable” enterprises Target date: January 1, 2011  Date to be confirmed by March 31/08

4. 4 Benefits of Being “Same as IFRS” Transparency:  Marketplace cannot evaluate degrees of similarity Avoids conflicting national subsets of IFRS Avoids costly reconciliations

5. 5 Interaction of XBRL and IFRSs Framework for disclosure  Avoiding information dumps  What is disclosed  How it is disclosed Comprehensive, cohesive classification scheme  Balance sheet, income statement, cash flows  Classified as operating, investing or financing

6. 6 Some Risks Posed by XBRL

7. 7 Risk # 1: Investors Ignore Important “Qualitative” Disclosures “Investors want current value information  Current value information often is very subjective  Dilemma: relevance vs reliability “Qualitative disclosures provide context  Necessary for a proper understanding

8. 8 Risk # 2: Investors Don’t Know Extent of Testing/Verification of Information Procedures & controls over completeness and accuracy  By management  Involvement, if any, by auditors Varies widely  By type of document within a jurisdiction  From one jurisdiction to another  Differences are not transparent to investors Canadian Capital Markets Leadership Task Force Discussion Paper

9. 9 Risk #3: Investors Don’t Look Beyond the Financial Statements Other sources are important  Management commentary or MD&A IASB project is struggling XBRL lagging?

10. 10 Risk #4: XBRL and IFRSs Exceed Available Resources “Standards overload” is a widespread complaint  Accounting standards  Auditing standards  Independence rules  Auditor oversight/inspection  Securities regulation  Basel II capital requirements, etc Certification brings additional concerns

11. 11 In Conclusion….. Avoid indiscriminate “data dumps” Qualitative, as well as quantitative, disclosures are important Some areas for attention:  Management commentary (MD&A)  Minimum procedure/controls over reliability and completeness of financial information  Encourage XBRL tagging of MC/MD&A