International Financial Reporting Standards IFRS AGN World Congress

International Financial Reporting Standards (IFRS) AGN World Congress - Chicago 19 October 2009 The European Perspective Liam Mc. Quaid Managing Partner

Introducing Liam Mc. Quaid • • • Managing Partner - Duignan Carthy O’Neill Chairman AGN Europe Director AGN International Member of ASB CASE Committee Member of Accounting Committee Chartered Accountants Ireland

Introducing Duignan Carthy O’Neill, Chartered Accountants, Dublin, Ireland • Established over 40 years, Chartered Accountants • Services Include: - Audit & Accounting - Tax & Liquidations - Corporate Finance • Partners - Extensive Experience & International Work through AGN • PCAOB Registered to undertake audits in Ireland U. K. of US Public Company Subsidiaries

IFRS – The European Perspective Overview of Issues Ø IFRS use in European Union Ø Local European GAAP and IFRS Compared Ø IFRS for SMEs Ø AGN European Region IFRS Initiatives Ø IFRS in Practice Ø Conclusion

IFRS Use in European Union

IFRS Use in European Union IASB Quoted Companies - Cannot Impose Use of IFRS - Must use IFRS “As applicable in the E. U. ” Private Entities 4 th EU Directive Local GAAP - IFRS permitted in certain countries

European Unlisted Companies Use of IFRS

European Unlisted Cos. Use of IFRS Permitted in Consolidated Statements Prohibited in Separate Statements Austria Sweden X Belgium Spain X Czech Republic X France X IFRS Permitted in Consolidated Statements and Separate Company Statements Denmark Netherlands X Greece Norway X Ireland X Italy X (exclude small cos) Luxembourg X UK X Germany X (and local GAAP Statements also required)

Local European GAAP and IFRS Compared

IFRS/German/ French/ Ireland/UK GAAP Compared Subject IFRS German French Ireland/UK Legal Basis No Yes Commercial Code Yes True and Fair Override Yes No Yes Basis of Accounting Revaluations Used Historic Cost Specified None Balance Sheet Format Yes Yes Depreciation PPE Over Useful Life Tax Driven (1) Over Useful Life Revenue Recognition Substance of Arrangement Legal On Performance of Contractual Obligation Differences above highlight difficulties in implementing IFRS in Europe (1) As of 1 January 2010 the link between statutory accounts and tax accounts is not so strong as in the past.

IFRS for SMEs

IFRS for SMEs ─ ─ ─ Published July 2009 Use by Private Entities if Approved by Local Jurisdiction (i. e. 95% of all companies UK & Ireland) Excellent Standard EU Commission - Now Reviewing IFRS for SMEs as Part of EU Directive Project - Micros (Sales less than € 1 M) can be exempt from EU Directives Implementation - UK & Ireland Positive - South Africa Adopted - Others too early

AGN European Region IFRS Initiatives

AGN European Region IFRS Initiatives IFRS Seminar (Prague 18 Sept 2009) - 21 Firms – 25 Participants 100 % AGN – Speakers – Location – Attendees New Attendees (15) Free + on Friday + in suitable City IFRS Helpline - Designated member to answer IFRS Queries Minor Advice - No Fee Extensive Advice - Fee IFRS Blog - In Progress IFRS Referrals - In Progress AGN/IFRS University Prize - In Progress

IFRS in Practice

IFRS in Practice ─ Example of Financials (Curanum) ─ Good Example ─ Good Fees

Conclusion

Conclusion Quoted Companies Private Companies - IFRS Acceptance Obligatory - Differences in Local GAAP + IFRS causes implementation difficulties - IFRS for SMEs will force debate - Ireland & UK will most likely adopt IFRS for SMEs AGN IFRS Initiatives - Annual Seminar - Helpline - Referrals IFRS in Practice - Good Fees

Duignan Carthy O’Neill, Chartered Accountants 84 Northumberland Road, Dublin 4, Ireland Contact: Liam Mc. Quaid (01) 668 2404 liammcquaid@dcon. ie Web Site: www. dcon. ie