1. 1 CURRENT DEVELOPMENTS IN THE DIVISION OF CORPORATION FINANCE 8 th Annual Financial Reporting Conference Baruch College Wayne Carnall Chief Accountant Division of Corporation Finance April 30, 2009

2. 2 The Securities and Exchange Commission, as a matter of policy, disclaims responsibility for any private publication or statement by any of its employees. Therefore, the views expressed today are our own, and do not necessarily reflect the views of the Commission or the other members of the staff of the Commission. Disclaimer

3. 3 Agenda Rules Communications Reviews/Current Environment Miscellaneous Items Goals for the Future

4. 4 Rules IFRS in the US - Proposal   Two Parts – roadmap and limited early use   Comment period – recently ended Oil and Gas   Disclosure   Accounting FIRE XBRL Technical Amendments

5. 5 COMMUNICATIONS INTERNAL/ EXTERNAL & TRANSPARENCY

6. 6 Communications Outreach Program   Accounting Firms   Investor Groups   Other Organizations Letters – waivers, interpretations, etc. dcaoletters@sec.gov dcaoletters@sec.gov E-mail vs. phone calls   Efficiency   Future Guidance

7. 7 SFAS 157 – Dear CFO Letters Letters sent to approximately 30 financial institutions, plus posted on our website given the much broader applicability of the guidance http://www.sec.gov/divisions/corpfin/guidance/fai rvalueltr0308.htm http://www.sec.gov/divisions/corpfin/guidance/fai rvalueltr0908.htm

8. 8 Wayne Carnall, Chief Accountant Steven Jacobs, Associate Chief Accountant Hugh West, Accounting Branch Chief Mark Kronforst, Accounting Branch Chief Kevin Woody, Accounting Branch Chief Angela Crane, Accounting Branch Chief Kevin L. Vaughn, Accounting Branch Chief Joel Parker, Accounting Branch Chief Brian Bhandari, Accounting Branch Chief Division of Corporation Finance November 2008 SEC Staff Review of Common Financial Reporting Issues Facing Smaller Issuers

9. 9 PCAOB Forum - Smaller Issuers Topics - 2008 Overview of the Agency and Division Recent Developments The Comment Letter Process Financial Reporting Issues Frequently Raised in Comment Letters Management Report on Internal Control over Financial Reporting Resources

10. 10 PCAOB Forum - Smaller Issuers New Topics - 2009 Impairments and Related Disclosure (including SOP 94-6) ·Back-door Registrations and the Reporting Requirements ·Related Party Transaction ·Restricted Net Assets ·SRC Transitions and Determinations ·ICFR

11. 11 History of the “Training Manual ” Developed around 1990 Prepared by the staff of the Division of Corporation Finance for the staff of the Division of Corporation Finance Last version was 2000 Goals for updating   End of Summer 2008 – 11:44am September 22   October 31, 2008   12:08pm December 9, 2008 Contest for new name

12. 12 Financial Reporting Manual Location http://sec.gov/divisions/corpfin/cffinancialrepor tingmanual.pdf http://sec.gov/divisions/corpfin/cffinancialrepor tingmanual.pdf Updating   March 31, 2009   Next update

13. 13 Financial Reporting Manual Topic 1 – Registrant’s Financial Statements Topic 2 – Other Financial Statements Topic 3 – Pro Forma Information Topic 5 – Smaller Reporting Companies Topic 6 – Foreign Private Issuers Topic 7 - Related Party Matters Topic 8 – Non GAAP Measures Topic 9 – MD&A Topic 12 – Reverse Acquisitions Topic 13 – Subsequent Events Topic 14 – Tender Offers Topic 15 – Employee Stock Benefit Plans Topic 16 - MJDS

14. 14 CF-OCA: Reorganization Craig Olinger Deputy Chief Accountant (Operations) Associate Chief Accountants Mark Kronforst Deputy Chief Accountant (Policy) New Associate Chief Acct (New), Staff Accountant, Academic Fellow Wayne Carnall Chief Accountant

15. 15 Reorganization Reason & Responsibility Reason for the new group Responsibilities of the new group  Work closely with the AD groups to facilitate the sharing of information with and the resolution of issues among the accounting staff in the entire Division  Coordinating the updating and publication of the Financial Reporting Manual on a real time basis  Creating and issuing other forms of guidance – primarily internal, but also external guidance on financial reporting and disclosure  Developing/revising policies and programs with respect to the Division’s accounting, technical and interpretative program  Organizing and developing accounting training sessions

16. 16 REVIEWS REVIEWS

17. 17 Filing Review Process Document on our website that explains the review process and provides names and numbers with people to call with questionsDocument on our website that explains the review process and provides names and numbers with people to call with questions http://www.sec.gov/divisions/corpfin/cffilingre view.htm http://www.sec.gov/divisions/corpfin/cffilingre view.htm Responding to comment letters  Bad practice  Good practice

18. 18 Current Issues Impairment of goodwill   Market cap below book value   Determining fair value of reporting unit   Not just accounting – implications to the business   MD&A disclosure – critical accounting assumptions Accounting for income taxes   Valuation allowances   Disclosures   Implications to the business   APB 23 – Undistributed earnings

19. 19 Current Issues Pension – assumptions, curtailments Investments – OTTI   New FSPs Segments –   Disclosure   Reporting units – impairment   Aggregation Liquidity

20. 20 Current Issues Going concern IFRS 7 Statement of cash flows TARP, TALF, etc Codification

21. 21 Materiality Experiences this past yearExperiences this past year In preparing a “SAB 99” memo -In preparing a “SAB 99” memo -  Companies are simply listing the 8 points in SAB 99 and indicating “no” and concluding the error is not material  Companies should provide company specific information on their assertion

22. 22 Miscellaneous Items Disposal of interest in equity affiliates and significance test for 3-09 financial statements Form S-8 – change in financial statements that require retroactive application Item 11(b) of Form S-3 – SFAS 160 et al Transitional Provisions of FSP APB 14-1 Consents – C&DI – Question 141.02 Non GAAP – C&DI – Question 102.05

23. 23 Goals for the Future Complete CF-OCA reorganizationComplete CF-OCA reorganization Continue the outreach programContinue the outreach program Keep current the Financial Reporting Manual and develop interpretations that will be part of C&DIsKeep current the Financial Reporting Manual and develop interpretations that will be part of C&DIs Update/eliminate certain information on our websiteUpdate/eliminate certain information on our website Develop “No Action” style letters for certain itemsDevelop “No Action” style letters for certain items Keep current the guidance for smaller issuersKeep current the guidance for smaller issuers Issue guidance on areas of focus for community banksIssue guidance on areas of focus for community banks