Presentation held to Swissholdings Accounting working group on 31 May 2010.

1. Analysts
@
as represented by
Christian Dreyer, CFA

2. Group profile
currently 14 members, 3 meetings p.a.
provide input into concepts &
proposals
assist in contacting users in order to
facilitate outreach
offer advice on practical implications
of intended proposals

3. Members‘ backgrounds
Countries Industries
Canada Analyst Societies
France Consultants
Japan (Investment)
Netherlands Banking
Spain Rating Agencies
Switzerland Venture Capital
UK
US

4. Recent discussions
ARG‘s own structure, objectives etc
Convergence
Employee benefits / IAS 19
Financial Instruments: Impairment &
Hedging
Financial Statement Presentation
Liabilities / IAS 37

5. There is no such thing ...

6. There is no such thing ...
divergent preferences
due to different -
objects of analysis
analytical models
conflicts / biases
single common
purpose: value
pragmatic approach
no respect for format

7. A stable platform?
Research
premium
efficiency of
cap. allocation
Profitability
Cost of
Accessibility
coverage

8. The Holy Grail

9. The Holy Grail

10. y
i li t
l
The Holy Grail
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n ab cr
t ai Ac
S us
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t io
n
t io
bu
tri
ea
Dis
Cr

11. Required information

12. Required information

13. Required information
Resources
Obligations
Ability to generate
inflows of resources
Ability to convert
resources into cash
Short- & long-term
Risk

14. Book vs Market
CPA’s CFA’s
domain domain
Cut-
off
date
expected future expected future
development of development of
known business future business

15. Resources
Obligations
Ability to generate
inflows of resources
Ability to convert
resources into cash
Short- & long-term
Risk

16. Expectations rule!
Resources
Obligations
Ability to generate
inflows of resources
Ability to convert
resources into cash
Short- & long-term
Risk

17. Expectations rule!
Resources
Obligations
Ability to generate
inflows of resources
Ability to convert
resources into cash
Short- & long-term
Risk

18. Expectations rule!
Resources
Obligations
Ability to generate
inflows of resources
Ability to convert
resources into cash
Short- & long-term
Risk

19. Measuring value
The unit is currency - but with what attribute?

20. ?
1€ + 1€ = 2€

21. Twelve
Principles
to enable financial reporting
to more faithfully represent
economic reality

22. Price discovery, ca. 1920
Valuation Expec- Valuation Expec-
concepts tations concepts tations
Bid Ask
Fundamental Fundamental
Information Information

23. Price discovery, ca. 2000
Valuation Expec- Valuation Expec-
concepts tations Bid Ask concepts tations
Fundamental
information

24. Price discovery, ca. 2015
Expectations Bid Ask Expectations
Valuation Fundamental
concepts information

25. Dizzy, yet?
no interest in complexity, if -
economic reality is represented
valuation assumptions are disclosed
reverse feedback loop from users via
standard setters to preparers

26. Happy to
discuss!
Chris Dreyer CFA
M +41 76 334 0800
christian@dreyer.ch
http://iorp.eu