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IASB and Convergence

IASB and Convergence. Paul Cherry Chairman, Standards Advisory Council. Chairman, Standards Advisory Council. Momentum for IFRS Continues. 100+ countries already Includes EU, Australia Several countries in transition, including Canada , China, Japan, Korea, Mexico

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IASB and Convergence

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  1. IASB and Convergence Paul Cherry Chairman, Standards Advisory Council Chairman, Standards Advisory Council 2008 IASC Foundation  |   30 Cannon Street  |   London EC4M 6XH  |   UK  |   www.iasb.org

  2. Momentum for IFRS Continues • 100+ countries already • Includes EU, Australia • Several countries in transition, including • Canada , China, Japan, Korea, Mexico • Focus in most countries is on listed companies • Approach varies for private companies

  3. Global Market Trends (2007)* • Global Fortune 500 • US GAAP 42% • IFRS 32% • Japan 9% [switching to IFRS] • Canada 3% [switching to IFRS] • Other 14% * Centre for Audit Quality 2008 IASC Foundation  |   30 Cannon Street  |   London EC4M 6XH  |   UK  |   www.iasb.org

  4. Global Market Trends (2002-2008)* • Growth of listed companies on stock exchanges • Korea 163% • India 53% • Singapore 53% • China 27% • UK 10% • US ( 1)% * Center for Audit Quality 2008 IASC Foundation  |   30 Cannon Street  |   London EC4M 6XH  |   UK  |   www.iasb.org

  5. Global Market trends (2002-2008)* % of Global Market Capitalization on Exchanges 2002 2008 China 4% 9% UK 8% 6% US 48% 35% * Center for Audit Quality 2008 IASC Foundation  |   30 Cannon Street  |   London EC4M 6XH  |   UK  |   www.iasb.org

  6. Canada’s Changeover to IFRSs [1/2] • “Publicly accountable” • IFRSs; or • US GAAP [ SEC registrants only] • Private enterprises • IFRSs; or • Canadian Private Enterprise GAAP [not IFRS SMEs] • Non-for-profits: undecided • Government business enterprises: IFRSs

  7. Canada’s Changeover to IFRS [2/2] • Mandatory in 2011 • Interim and annual reports • Early adoption permitted, eg Brookfield • No carve-outs or add-ons • Unreserved statement of compliance with IFRSs • Notes to the financial statements • Auditors’ reports

  8. Status of Convergence • Financial crisis has put IASB and FASB under enormous political pressure • Has not slowed momentum for global standards (SEC) • IASB/FASB partnership strained but strong • Commitment to 2011 MOU remains • Enhanced work arrangements agreed in Oct/09 • All major new projects will be joint IASB/ FASB where possible

  9. What About the US? • SEC proposed roadmap • SEC will “redouble its efforts” [Kroeker] • Next milestone deadline is Dec 21/09 • Paul Volcker: • SEC should heed G20 call for global standards • David Tweedie: US needs to commit by 2011

  10. IFRS Already in Use in US (2007)* 2008 IASC Foundation  |   30 Cannon Street  |   London EC4M 6XH  |   UK  |   www.iasb.org

  11. What About Private US Companies? • Nearly 20 million private companies in US • Many are owned by IFRS parents • Many more have IFRS foreign operations • No general statutory requirement to use US GAAP • Very few use US GAAP per FASB • Growing interest in: • Full IFRS; or • IFRS SMEs 2008 IASC Foundation  |   30 Cannon Street  |   London EC4M 6XH  |   UK  |   www.iasb.org

  12. XBRL • Standard setters more aware of importance • IASCF Trustees and SAC also briefed • Projects of particular significance • Disclosure framework • Financial statement presentation • XBRL even more important for those using full IFRSs and also IFRS_ SME financial statements 2008 IASC Foundation  |   30 Cannon Street  |   London EC4M 6XH  |   UK  |   www.iasb.org

  13. Questions or comments? The views expressed in this presentation are those of the presenter. Official positions of the IASB on accounting matters are determined only after extensive due process and deliberation. 2008 IASC Foundation  |   30 Cannon Street  |   London EC4M 6XH  |   UK  |   www.iasb.org

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