1. (c) Rita Ilisson Dec. 20051 IAS/IFRS in Estonia and IAS/IFRS and SMEs Rita Ilisson Member, IASBs Standards Advisory Council 2001-2005 Chairman, Estonian Accounting Standards Board 1993-2001 ilisson@online.eeilisson@online.ee, 372 53323713

2. (c) Rita Ilisson Dec. 20052 IAS/IFRS and Europe 2005  listed companies & consolidated accounts listed companies & separate accounts? to include mamma in the group accounts  mamma restates mamma to IFRS ? other companies & IAS/IFRS? to include baby in group accounts  mamma restates baby to IFRS?......

3. (c) Rita Ilisson Dec. 20053 IAS/IFRS and Europe 2005 Baltics - three different approaches to the EU directives and regulations ! Estonia – all entities may use IFRS - 2003? EAS - in compliance with IAS as of 1994 Latvia - if IFRS complies with Latvian law ! LAS – few... Lithuania – unlisted  only local GAAP NAS – in compliance with IAS as of 2003

4. (c) Rita Ilisson Dec. 20054 IAS/IFRS in Europe 2005...IFRS as adopted by the EU? political posing or legal necessity?...IAS adopted by the EU  or  IFRS? …the fate of local GAAPs based on IAS/IFRS e.g. Est (1993), Lith (2003)...?...how can countries aspiring to enter the EU incorporate IFRS into their legal framework?

5. (c) Rita Ilisson Dec. 20055 IAS/IFRS in Estonia Estonian-American, living in Sweden appointed Chairman of the EASB on Feb 12, 1993 Strategy  IAS = accounting platform  mix of Common/Roman law traditions  framework law/ independent standard- setter to issue IAS compliant standards  mandatory application of standards  enact company law via the accounting law

6. (c) Rita Ilisson Dec. 20056 IAS/IFRS in Estonia Framework Accounting Law - 06.94 IAS basis for accounting by law EU formats balance sheet in order of liquidity Treasury stock (Own shares) in equity Conclusion: if right options picked from the directives  IAS in 1993

7. (c) Rita Ilisson Dec. 20057 IAS/IFRS in Estonia EU expert opinion 4 Jan 1994 … would prefer or insist would prefer - unrealized gains in equity and unrealized losses in P&L insist on the true and fair override continental law  standard setter and mandatory standards cannot conform to IAS and directives 1997 - IAS/directives mix considered feasible!

8. (c) Rita Ilisson Dec. 20058 The Accounting Reform Cookbook no mandatory chart of accounts think! if the accountant is not capable?… separate financial accounting and taxation set up an independent standard setter with the might to issue and enforce financed by the state or set up a trust framework law + mandatory standards

9. (c) Rita Ilisson Dec. 20059 The Accounting Reform Cookbook encompass the regulation of all accounting entities under 1 hat banks, insurance, manufacturing, retail work across the board – privatization issued company registries address any and all accounting issues natural monopolies

10. (c) Rita Ilisson Dec. 200510 The Accounting Reform Cookbook disclosure - carrot or the stick? examples – use the press! Flagship of …Accounting lead/times – 3-5 standards…wait two years address SMEs in two standards -need to know principle address impairment issues allow all group entities consolidated into IFRS group accounts to apply IFRS!