1. IASB/FASB Joint Income Tax Convergence Project A Closer Look Kathie Bugg, Deloitte & Touche LLP TEI/IFA IFRS Seminar March 25, 2009

2. Copyright © 2009 Deloitte Development LLC. All rights reserved. Agenda Overview of IFRS IFRS in the United States IASB/FASB Joint Income Tax Convergence Project

3. Overview of IFRS

4. Copyright © 2009 Deloitte Development LLC. All rights reserved. What is IFRS? IFRS is a set of established accounting standards that is rapidly gaining worldwide acceptance ‒ Standards are promulgated by the London-based International Accounting Standards Board (IASB) IASB includes representatives from major countries, including the U.S. Generally more focused on objectives and principles and less reliant on detailed rules and interpretations than U.S. GAAP ‒ IFRS currently consists of a single volume of approximately 40 standards and 25 interpretations ‒ Standards include IASs and IFRSs ‒ Interpretations include SICs and IFRICs

5. Copyright © 2009 Deloitte Development LLC. All rights reserved. The Global Move Towards IFRS Europe 2005 Australia 2005 Canada 2009/11 South Africa 2005 United States (2009-14?) Current or anticipated requirement or option to use IFRS (or equivalent) Brazil 2010 China 2007 India 2011 Chile 2009 Japan (?) Mexico 2008/12

6. Copyright © 2009 Deloitte Development LLC. All rights reserved. IFRS Today and Tomorrow Today, IFRS is used in more than 100 countries: Required for all listed companies in EU countries, starting in 2005 Argentina, Brazil, Canada, Chile, India, Korea, and Mexico all have announced mandated use Japan currently considering allowing IFRS beginning 2010, with a requirement in 2015 FPIs can now use IFRS in the U.S. SEC Roadmap contemplates use of IFRS beginning in 2014 By 2011, it is expected that: All major countries will have adopted IFRS to some extent Certain U.S. public companies will have the option to use IFRS SEC decision on IFRS mandate for all U.S. public companies Accounting Standards Used by Global Fortune 500 About 40% of the Global Fortune 500 Companies currently use IFRS. That number is expected to grow as more countries adopt IFRS over the next few years.

7. Regulatory Update

8. Copyright © 2009 Deloitte Development LLC. All rights reserved. SEC Developments December 2007 –Foreign private issuers can file under IFRS without a reconciliation to U.S. GAAP November 2008 –SEC issues proposed roadmap and rule changes (comments on roadmap due on April 20, 2009) Roadmap describes milestones for the mandatory transition to IFRS starting in 2014 Proposed rule change permits the largest U.S. companies (by market cap) in IFRS predominant industries an option to adopt IFRS starting in 2009 December 2008 –The G-20 adopted, as a medium-term priority, the implementation of a globally consistent set of accounting standards January 2009 –Paul Volker, chairman of the Economic Recovery Advisory Board under President Obama, former IASC foundation chairman, reiterated his support for IFRS in January 2009 –Mary Schapiro, SEC Chairman, in her Senate confirmation hearing, responded to questions from Senator Jack Reed, stating that she would carefully review the existing IFRS roadmap and proposed rule and would consider various factors, including the cost of implementation and independence of the IASB February 2009 –SEC extends comment period on the proposed roadmap to April 20, 2009 Recent SEC developments

9. IASB/FASB Joint Income Tax Convergence Project

10. Copyright © 2009 Deloitte Development LLC. All rights reserved. Income Tax Convergence Project Objective IASB / FASB Convergence – Accounting for Income Taxes The objective of project is to reduce the number of differences between IAS 12 and SFAS 109 ‒ Fundemental accounting for income taxes is not addressed in the project scope

11. Copyright © 2009 Deloitte Development LLC. All rights reserved. Timeline Launch of the “SEC/CESR Work Plan” to address application issues relating to the implementation of IFRS EC issues draft report on “equivalence” of national GAAPs and IFRS EC begins project on “equivalence” of national GAAPs and IFRS Reaffirmation of the convergence efforts by the FASB and IASB (“MOU”) Development of the SEC “IFRS Roadmap” by then Chief Accountant Don Nicolaison SEC eliminates the requirement for foreign private issuers that use IFRS to reconcile to U.S. GAAP SEC publishes for public comment a proposed Roadmap that could lead to U.S. investors using IFRS Final report on the “equivalence” of national GAAPs and IFRS The “Norwalk Agreement” between FASB and IASB. SEC issues “Concept Release” on allowing U.S. issuers a choice between IFRS and U.S. GAAP Revised MOU issued by the IASB and FASB 2008200720062005200420022009 Expected issuance of IAS 12 Exposure Draft

12. Copyright © 2009 Deloitte Development LLC. All rights reserved. Anticipated Next Steps FASB decided to rethink short-term convergence strategy due to anticipated movement to IFRS in the United States. FASB to expose amendments to IAS 12 as part of an Invitation to Comment (ITC) ITC will solicit responses from U.S. issuers regarding: ‒ IASB's proposed amendments to IAS 12 ‒ FASB's covergence process on a go-forward basis

13. Copyright © 2009 Deloitte Development LLC. All rights reserved. Speaker Bio Kathie Bugg is a Partner at Deloitte & Touche LLP where she specializes in International Financial Reporting Standards (IFRS) as well as global regulatory and professional issues. She is currently a member of Deloitte’s National IFRS PMO. Prior to that she was a member of Deloitte’s National Office SEC Services group where she regularly consulted with both domestic and foreign companies on SEC rules and regulations as well as the application of IFRS. From December 2002 through October 2004, Kathie served as a Practice Fellow at the International Accounting Standards Board (IASB). In this capacity, her primary responsibility was to serve as the project manager on the income tax short-term convergence project with the FASB. She was also actively involved in the IASB’s Improvements project including IAS 33 Earnings per Share and IAS 16 Property, Plant and Equipment. Kathie is a graduate of California Polytechnic State University, San Luis Obispo and holds a B.S. in Business Administration with a concentration in accounting. She is a Certified Public Accountant in California and Connecticut. She is a member of the American Institute of Certified Public Accountants E-mail: kbugg@deloitte.com

14. Copyright © 2009 Deloitte Development LLC. All rights reserved.