Future Opportunities and International Financial Reporting Standards (“IFRS”)

1. Future Opportunities and International Financial Reporting Standards (“IFRS”) Appraisal Institute of Canada June 6, 2008

2. Let’s understand the environment: • Over 100 countries, including UK, the EU nations, Australia and New Zealand have already adopted IFRS. • Japan, China, India, Brazil, South Korea and Israel are in the process of converging with IFRS. • Canada will adopt IFRS on January 1, 2011.

3. November 2007 - US Securities Exchange Commission decided to accept IFRS from foreign private issuers and these issuers will no longer be required to reconcile their IFRS statements to US GAAP. • January 2008, the Chartered Financial Analysts (“CFA”) announce that all real estate investments will require independent valuations every three years and internal valuations with disclosure of underlying assumptions will be reported quarterly;

4. February 2008, the Canadian Accounting Standards Board (“AcSB”) confirms IFRS will be adopted in Canada effective January 1, 2011. • February 2008, the Canadian Securities Administrators (“CSA”) issue a concept paper containing a tentative conclusion that financial statements may be prepared under IFRS for a financial year beginning on or after January 1, 2009.

5. April 2008 – G7 Summit - Financial Stability Forum “International Standard setters should enhance accounting, disclosure and audit guidance for valuation. Firm’s valuation processes and related supervisory guidance should be enhanced.” “The IASB will strengthen its standards to achieve better disclosures about valuations, methodologies and the uncertainty associated with valuations”

6. The International Accounting Standards Board (“IASB” issues IFRS) is populating its Fair Value Measurement project which is not only attempting to define what Fair Value is, but the basis of measurement. • The US Financial Accounting Standards Board (“FASB”) issued Financial Accounting Statement 157 (“FAS 157”) which permits assets and liabilities to be measured at “Fair Value”.

7. Why IFRS? Paul Cherry, Chair of the Canadian Accounting Standards Board (“AcSB”) “Canada cannot stand in isolation from the growing acceptance of a common financial reporting language. Capital Markets have gone global and Canada accounts for less than 4% of the global capital markets”

8. So when will it really hit our desks? Too late!

11. International Valuation Standards

12. International Valuation Standards (Eight Edition) Introduction  • Background to the International Valuation Standards Committee and the Standards  • Concepts Fundamental to Generally Accepted Valuation Principles (“GAVP”)• Code of Conduct  • Property Types International Valuation Standards• IVS 1 Market Value Basis of Valuation• IVS 2 Bases Other Than Market Value• IVS 3 Valuation Reporting International Valuation Applications• IVA 1 Valuation for Financial Reporting• IVA 2 Valuation for Secured Lending Purposes• IVA 3 Valuation of Public Sector Assets for Financial Reporting

13. International Valuation Standards (Eight Edition) Guidance Notes• GN 1 Valuation of Real Property   • GN 2 Valuation of Lease Interests   • GN 3 Valuation of Plant and Equipment • GN 4 Valuation of Intangible Assets • GN 5 Valuation of Personal Property   • GN 6 Business Valuation • GN 7 Consideration of Hazardous and Toxic Substances in Valuation   • GN 8 The Cost Approach for Financial Reporting-(“DRC”)• GN 9 Discounted Cash Flow (“DCF”) Analysis for Market Valuations and Investment Analyses• GN 10 Valuation of Agricultural Properties• GN 11 Reviewing Valuations• GN 12 Valuation of Specialised Trading Property• GN 13 Mass Appraisal for Property Taxation• GN 14 Valuation of Properties in the Extractive Industries• GN 15 Valuation of Historic PropertyGlossaryIndex

14. Professional Valuer Professional Valuer: • an individual who possesses intimate knowledge of a property market; understands the interaction of participants in the market; and is, thereby, able to judge the most likely prices to be concluded between buyers and sellers of property in that market. • an individual who has appropriate education, experience, is a member of a professional body and pursues professional learning throughout his or her career.

15. If your clients are Publicly Accountable Entities, (“PAE”) IFRS is mandatory. The boundaries of PAE are not yet finalized. • What IFRS will look like for Small and Medium sized Entities (“SME”) is also still to be determined. • Anyone, especially the development community, wanting to maximize value will likely opt to report Fair Value under IFRS.

16. IVA 1 Valuation forFinancial Reporting • IAS 16 Property, Plant and Equipment • Initially recognized at Cost • After recognition, Revaluation at Fair Value • IAS 17 Leases • Operating Leases • Finance Leases • Sale / Lease back • IAS 40 Investment Property • IAS 41 Agricultural Property

17. What should you be doing • Don’t panic … there is time. • Keep monitoring. (AIC and UBC websites) • IVS access is in the works with IFRS references. • Big Four (plus) accounting firms have lots of articles, planning around the transition to IFRS. • Realpac

18. Thank you for your attention.

19. Disclaimer Every effort has be made to ensure the statements and observations contained in this presentation are correct. If you discover an error, I would appreciate being advised of the error as soon as possible by email at brad@bradford.ca. Thank you. Brad Wagar 403-215-1050