IASB and Convergence

International Financial Reporting Standards

The views expressed in this presentation are those of the presenter, not necessarily those of the IASC Foundation or the IASB

IASC Foundation

IASB and ConvergencePaul Cherry

Chairman, Standards Advisory Council

November 2008

2008 IASC Foundation | 30 Cannon Street | London EC4M 6XH | UK | www.iasb.org

Chairman, Standards Advisory Council

Momentum for IFRS Continues

• 100+ countries already

– Includes EU, Australia

• Several countries in transition, including

– Canada , China, Japan, Korea, Mexico

• Focus in most countries is on listed companies

• Approach varies for private companies

Global Market Trends (2007)*

• Global Fortune 500

– US GAAP 42%

– IFRS 32%

– Japan 9% [switching to IFRS]

– Canada 3% [switching to IFRS]

– Other 14%

* Centre for Audit Quality


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Global Market Trends (2002-2008)*

• Growth of listed companies on stock exchanges

– Korea 163%

– India 53%

– Singapore 53%

– China 27%

– UK 10%

– US ( 1)%

* Center for Audit Quality


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Global Market trends (2002-2008)*

% of Global Market Capitalization on Exchanges

2002 2008

China 4% 9%

UK 8% 6%

US 48% 35%

* Center for Audit Quality


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Canada’s Changeover to IFRSs [1/2]

• “Publicly accountable”

– IFRSs; or

– US GAAP [ SEC registrants only]

• Private enterprises

– IFRSs; or

– Canadian Private Enterprise GAAP [not IFRS SMEs]

• Non-for-profits: undecided

• Government business enterprises: IFRSs

Canada’s Changeover to IFRS [2/2]

• Mandatory in 2011

– Interim and annual reports

– Early adoption permitted, eg Brookfield

• No carve-outs or add-ons

• Unreserved statement of compliance with IFRSs

– Notes to the financial statements

– Auditors’ reports

Status of Convergence

• Financial crisis has put IASB and FASB under enormous political pressure

– Has not slowed momentum for global standards (SEC)

• IASB/FASB partnership strained but strong

– Commitment to 2011 MOU remains

– Enhanced work arrangements agreed in Oct/09

• All major new projects will be joint IASB/ FASB where possible

What About the US?

• SEC proposed roadmap

– SEC will “redouble its efforts” [Kroeker]

– Next milestone deadline is Dec 21/09

• Paul Volcker:

– SEC should heed G20 call for global standards

• David Tweedie: US needs to commit by 2011

IFRS Already in Use in US (2007)*

# of SEC filers GAAP Used Market Capitalization (billions)

140 IFRS 3510

280 Canadian GAAP 54

750 US 1953

89 Other 613

Total foreign private issuers 1259

6130

US domestic Issuers 8484 US GAAP 11254

Total SEC registrants 9743 17384


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What About Private US Companies?

• Nearly 20 million private companies in US

– Many are owned by IFRS parents

– Many more have IFRS foreign operations

• No general statutory requirement to use US GAAP

– Very few use US GAAP per FASB

• Growing interest in:

– Full IFRS; or

– IFRS SMEs


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XBRL

• Standard setters more aware of importance

• IASCF Trustees and SAC also briefed

• Projects of particular significance

– Disclosure framework

– Financial statement presentation

• XBRL even more important for those using full IFRSs and also IFRS_ SME financial statements


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13Questions or comments?

The views expressed in this presentation are those of the presenter. Official positions of the IASB on accounting matters are determined only after extensive due process and deliberation.

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IASB and Convergence