1. 0 Copyright © 2008 Deloitte Development LLC. All rights reserved. Dong Hee Kim, Audit Manager donghkim@deloitte.com IFRS Conversion For 11.2.2010 seminar

2. Contents Selected U.S. GAAP vs. IFRS Differences SEC’s IFRS Roadmap IFRS Overview & Update Implementation Considerations Q & A Copyright © 2009 Deloitte Development LLC. All rights reserved. 1

3. 2 Copyright © 2008 Deloitte Development LLC. All rights reserved. IFRS Overview & Update

4. What Is IFRS?  IFRS is a set of accounting standards that is rapidly gaining worldwide acceptance  Promulgated by the London-based International Accounting Standards Board (IASB) –Includes members from various 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 50 standards and 30 interpretations Copyright © 2009 Deloitte Development LLC. All rights reserved. 3

5. Why IFRS?  What is changing? –Globally, there is a clear movement toward a single set of financial reporting standards  Why these changes? –Continuing globalization of capital markets –Appeal of one global set of financial reporting standards  When will these become relevant to US companies? –IFRS is already starting to affect U.S. companies Copyright © 2009 Deloitte Development LLC. All rights reserved. 4

6. The Global Move to IFRS Copyright © 2009 Deloitte Development LLC. All rights reserved. 5

7. The Global Move to IFRS (continued)  Limited use of IFRS until 2005  Today IFRS is used in over 100 countries: –Required across all EU countries, Australia, South Africa starting in 2005 –Brazil and India have announced mandated use –Ongoing convergence efforts between FASB and IASB  By 2011, it is expected that: –All major countries will have adopted IFRS to some extent –China and Japan will be substantially converged to IFRS Global Fortune 500 Copyright © 2009 Deloitte Development LLC. All rights reserved. 6

8. 7 Copyright © 2008 Deloitte Development LLC. All rights reserved. SEC’s IFRS Roadmap

9. 200820092010201120122013201420152016 Certain U.S. issuers may begin using IFRS for fiscal years ending on or after December 15, 2009 (milestone 5). Non-accelerated filers could be required to make the transition to IFRSs for fiscal years ending on or after December 15, 2016 (milestone 7). Accelerated filers could be required to make the transition to IFRSs for fiscal years ending on or after December 15, 2015 (milestone 7). Large accelerated filers could be required to make the transition to IFRSs for fiscal years ending on or after December 15, 2014 (milestone 7). SEC to decide whether to mandate use of IFRSs for all U.S. issuers on the basis of the progress of milestones 1–4 (milestone 6). Period in which milestones 1–4* will be evaluated. SEC’s IFRS Roadmap  The SEC issued the proposed IFRS “roadmap” on November 14, 2008. The roadmap includes a timeline for IFRS adoption by public companies and seven related milestones that need to be achieved before mandating IFRS use. * Milestones 1 - 4  Improvements in accounting standards  Funding and accountability of IASC Foundation  Improvement in the ability to use interactive data for IFRS reporting  Education and training on IFRS in the United States Copyright © 2009 Deloitte Development LLC. All rights reserved. 9

10. SEC’s IFRS Roadmap (continued)  Milestone 5, Early adoption option: Certain U.S. issuers may begin using IFRS for fiscal years ending on or after December 15, 2009  Scopes out other types of financial reports that are filed by regulated entities, such as registered broker-dealers  Intended to identify categories of U.S. issuers whose use of IFRS would promote comparability with global competitors Copyright © 2009 Deloitte Development LLC. All rights reserved. 10

11. Copyright © 2008 Deloitte Development LLC. All rights reserved. Selected U.S. GAAP vs. IFRS Differences

12. 11 Copyright © 2008 Deloitte Development LLC. All rights reserved. General

13. 12 Copyright © 2008 Deloitte Development LLC. All rights reserved. Consolidation – from the perspective of a subsidiary

14. 13 Copyright © 2008 Deloitte Development LLC. All rights reserved. Leases

15. 14 Copyright © 2008 Deloitte Development LLC. All rights reserved. Long-lived assets – Property and equipment

16. 15 Copyright © 2008 Deloitte Development LLC. All rights reserved. Income taxes

17. 16 Copyright © 2008 Deloitte Development LLC. All rights reserved. Inventories Copyright © 2009 Deloitte Development LLC. All rights reserved. 16

18. 17 Copyright © 2008 Deloitte Development LLC. All rights reserved. Presentation of Financial Statements Copyright © 2009 Deloitte Development LLC. All rights reserved. 16

19. 18 Copyright © 2008 Deloitte Development LLC. All rights reserved. Implementation Considerations

20.  Tax structures  Treasury and cash management  Legal and debt covenants  People issues, including education and training, compensation structures  Internal communications  External and shareholder communications Organizational Issues Technology Infrastructure  General ledger and chart of account structure, including performance metrics  Sub-system issues related to configuration and data capture  Capabilities to manage multiple GAAP accounting during transition Process and Statutory Reporting  Internal controls and processes, including documentation and testing  Management and internal reporting packages  Reporting packages Technical Accounting  Overall approach to IFRS implementation  First time adoption policy considerations, including reporting dates and use of exemptions  Ongoing policy considerations, including alternatives and approach to “principles” Additional Implications of IFRS Implementation Copyright © 2009 Deloitte Development LLC. All rights reserved. 18

21. Transition Date 2008 2007 2011 2010 2009 Statutory Implementation Select Exemption “Dry Runs” US GAAP & IFRS opening balance Quarterly IFRS Investor Communications Audit Procedures Change Standards Transition to IFRS Quarterly Reporting Investor Communications Convert Systems Rationalization and standardization of statutory reporting IFRS Competence Alignment with other initiatives and training for appropriate personnel Targeted Statutory Implementation Systems Implementation Impact Analysis Assessment Strategic Implementation Roadmap Technical Accounting Technology & Processes Organizational Issues Illustrative IFRS Adoption Strategy Reporting Date Copyright © 2009 Deloitte Development LLC. All rights reserved. 19

22. 21 Copyright © 2008 Deloitte Development LLC. All rights reserved. Questions? ?