1. Copyright © 2010 Deloitte Development LLC. All rights reserved. Understanding the impact of IFRS Cost effective assessment Americas' SAP Users' Group – Chicago April 16, 2010 Nick Difazio Partner – National IFRS PMO Deloitte & Touche LLP Ben Resch Partner – Regional IFRS PMO Deloitte & Touche LLP

2. Copyright © 2010 Deloitte Development LLC. All rights reserved. 1 Worldwide IFRS adoption map – For public companies Global use — Used in over 100 countries by more than 40% of the Global Fortune 500 Current: European Union (EU) countries, Hong Kong, Australia, New Zealand and many Middle East and South American countries Future: Chile (2009); Brazil (2010); Argentina, Canada, India and South Korea (2011); Mexico (2012), Japan early adopters (2010) Proposed: U.S. mandatory (2015) may provide early adoption, Japan mandatory (2015) — Based on Regulatory Roadmaps Europe 2005 Australia 2005 Canada 2009*/2011 China 2007 Brazil 2010 India 2011 Chile 2009-11 Japan 2010*/2015 South Africa 2005 Adopted or will adoptDeveloping plans to adopt No plans or unknown Mexico 2012 United States 2009 ‒ 14 Argentina 2012 * Early adopters

3. Copyright © 2010 Deloitte Development LLC. All rights reserved. 2 SEC statement on convergence and global standards Summary SEC statement on convergence and global standards  Overview of the SEC (“the Commission”) statement −Reviews Commission’s IFRS activities to date −Summarizes public feedback on the IFRS roadmap −Outlines an approach going forward  Includes a “Work Plan” setting forth specific areas and factors for consideration before potentially transitioning to IFRS  Withdraws the initial proposal on early use; although does not rule out an ability to early adopt in the future  Execution of the Work Plan, combined with the completion of the convergence efforts, could position the Commission to make an informed decision on an IFRS mandate in 2011  Future SEC rulemaking would be required to implement– likely effective in 2015 On February 24, 2010, the SEC issued a statement expressing its continued support for the development of a single set of high-quality globally accepted accounting standards and recognized IFRS as being best positioned to serve that role.

4. Copyright © 2010 Deloitte Development LLC. All rights reserved. 3 IFRS in the U.S. – Revised SEC timeline 2011: SEC to decide whether to mandate IFRS January 1, 2013 Beginning of the first comparative IFRS year under current proposal December 31, 2015: Companies could be mandated to report financial results using IFRS 2010: Expected release of revised “IFRS roadmap” and SEC workplan Dual reporting period: IFRS & U.S. GAAP Transition date 201020112012201320142015 IFRS Reporting date Proposed SEC timeline (as revised) U.S. GAAP Financial Statements (through third-quarter 2015) IFRS Financial Statements

5. Copyright © 2010 Deloitte Development LLC. All rights reserved. 4 Role of convergence  SEC statement reinforces support for the ongoing convergence activities of the FASB and IASB  SEC statement emphasizes completion of current initiatives by June 30, 2011 Convergence considerations  Convergence does not necessarily result in identical standards; focus is on converging general principles, not every detail  Ongoing convergence is limited to a defined group of projects  Several of the most time consuming areas of IFRS conversion deal with areas not subject to convergence  “Convergence” will not result in a transition to IFRS by U.S. issuers in and of itself

6. Copyright © 2010 Deloitte Development LLC. All rights reserved. 5  Planning to help ensure a cost effective implementation −Answering key stakeholder questions regarding impact (e.g., earnings) −Determining high-effort and long lead-time items −Developing resource estimates and a plan of attack by area −Preparing for and accomplishing statutory conversions, as required  Monitoring the statutory reporting environment  Evaluating the impact on in-process ERP implementations and upgrades  Considering long-term benefit opportunities −Simplification and streamlining of statutory reporting −Simplified internal controllership processes—platform for finance transformation in selected areas −Identification of impact on in-flight system modifications −Tax planning opportunities Based on our experience and knowledge, many companies are doing the following: Many companies are performing or planning an IFRS impact analysis in light of IFRS developments and ongoing convergence efforts What are U.S. companies doing now?

7. Copyright © 2010 Deloitte Development LLC. All rights reserved. 6 2011 Plan and design Solution development Implementation and dual reporting 20122013201420152016 Cutover to IFRSBegin U.S. GAAP and IFRS Dual Rptg. 2010 Technical accounting Statutory reporting Program management Tax Process and controls Systems Organization and change Develop Structure Model IFRS chart of accounts Create global IFRS policies Develop reporting package Gather system requirements Design, build, and test changes to ERP and other systems Deploy systems Evaluate dependencies on other Company Initiatives Obtain IFRS tax assessment Assess process and control impacts Redesign processes and controls Assess organization impacts Prepare IFRS compliant financial statements Identify Impacts on other internal and external stakeholders IFRS conversion by Country Implement organizational changes Conduct user training Assist business units in adopting IFRS Assist Company to run U.S. GAAP and IFRS in parallel Identify and address reporting gaps Identify/address process and control gaps Identify and address system gaps Identify and address org and people gapsDevelop user training Identify other initiatives Ongoing program management, change management, and communication Obtain IFRS Tech Acctg assessment Identify tax implications of global IFRS policies Set Conv. Sequence Evaluate tax alternatives Determine hand-offs Align with operating model Develop communication plan/infrastructure Transition phases High-level IFRS conversion roadmap The following high-level IFRS conversion roadmap illustrates a potential IFRS adoption timeline and would need to be tailored to a company's unique facts and circumstances. Note that the expected date of IFRS adoption is based on the February 24, 2010 SEC Statement in Support of Convergence and Global Accounting Standards.

8. Copyright © 2010 Deloitte Development LLC. All rights reserved. 7 IFRS considerations in a systems implementation  Consider areas of overlap with an IFRS conversion throughout the implementation process  Evaluate the interdependencies in the assessment phase. Common areas of focusSuggested activities as part of assessment Chart of accounts (COA) structure Understand what additional COA may be required under IFRS Understand if there is certain COA detail that might ultimately facilitate or simplify disclosures requirements under IFRS Map the IFRS sub ledger impacts to system functionality Facilitate COA rationalization effort is consistent with dual reporting approach New entities potentially requiring consolidation Assess existing legal entity structure and COA under IFRS Consider legal entity structure changes for entities that could potentially be consolidated under IFRS Dual reporting strategyDevelop a dual reporting strategy which comprehends the system Create journal entry methods/templates to accommodate new requirements Ledger interfaces Understand that the differences in the accounting treatment between current accounting standards and IFRS will likely drive changes to general ledger design Facilitate that the system legal entity structure and account structure can accommodate IFRS reporting Timeline/roadmap for implementation Mapping/integration of systems and IFRS Roadmaps

9. Copyright © 2010 Deloitte Development LLC. All rights reserved. 8 Sub-LedgerGeneral LedgerConsolidation Level Pros Provides detailed data for financial analysis and reporting Accounts for changes in the subsidiary’s financial statements May integrate with existing general ledger system and structure Balances between level of detail and effort of implementation Accounts for changes in the subsidiary’s financial statements May integrate with off-line and 3 rd party solutions Requires less implementation effort Enables parallel / dual reporting with no impact on transactional ledgers or general ledger chart of accounts Cons May require additional effort to capture necessary detail May require additional system modules, off-line or 3 rd party solutions Limits detail available for management reporting Requires reconciliation efforts between off-line solutions and general ledger Limits detail available for management reporting Limits ability to reconcile between ledgers at subsidiary level Requires manual intervention — prone to error Is less sustainable as a long-term solution Best fit High financial statement impact Information is available at required level of detail Sub-ledger detail is integral for managing the business Limited financial statement impact Decreased need for detail for internal/external reporting Low financial statement impact Calculations for adjustments are centralized Decision drivers Financial statement impact Current system release level Current sub-ledger and G/L structure Current chart of accounts structure Long-term business/IT strategy IFRS conversion strategy Time to conversion Additional benefits derived from proposed solution Solutions Options are available for parallel / dual reporting

10. Copyright © 2010 Deloitte Development LLC. All rights reserved. 9 Our experience with IFRS implementations has provided valuable insights  Issue Prioritization is Critical - Frequently a handful of issues will drive the vast majority of the work  Clearly Defined and Communicated System Requirements - Gaps typically exist between accounting conclusions and information finance technology needs  Effective Communication, Training and Change Management - Typically under- scoped, leading to ad-hoc questions and concerns  Granular Implementation Planning - Implementation roadmaps often are not sufficiently detailed to be actionable to identify key resource requirements and interdependencies  Disciplined Project Management Coordinated with Other Functional Initiatives - Downstream process and system analyses are frequently dependent on accounting policy selection  Consider U.S. GAAP Convergence as Well as IFRS - IFRS is driving significant changes to U.S. GAAP, in some cases on a more accelerated timeline

11. Copyright © 2010 Deloitte Development LLC. All rights reserved. 10 Contact information Nick Difaziondifazio@deloitte.com+1 313-396-3208 Ben Reschbenresch@deloitte.com+1 312-486-2492 Information on IFRS can be found on the following sites: www.deloitte.com/us/ifrs www.iasplus.com

12. Copyright © 2010 Deloitte Development LLC. All rights reserved. 11 This presentation contains general information only and Deloitte is not, by means of this presentation, rendering accounting, business, financial, investment, legal, tax, or other professional advice or services. This presentation is not a substitute for such professional advice or services, nor should it be used as a basis for any decision or action that may affect your business. Before making any decision or taking any action that may affect your business, you should consult a qualified professional advisor. Deloitte, its affiliates, and related entities shall not be responsible for any loss sustained by any person who relies on this presentation.