The Financial Accounting Foundation Advancing Financial Reporting

1. The Financial Accounting FoundationAdvancing Financial Reporting

2. Interactive Data and XBRLA Revolutionary Opportunity for Financial Reporting and the Capital Markets

3. FAF Overview • Non-stock, Delaware corporation • Incorporated in 1972 • IRC Section 501(c)(3) Status • Operating exclusively for educational purposes • Located in Norwalk, CT

4. FAF Purposes • Establish and improve financial accounting and reporting standards • Educate constituents as to standards • Responsible for oversight, administration, and finances of Standards Boards and Advisory Councils • Protect independence and integrity of standard-setting process

5. FAF Organizational Structure • Comprised of four groups • Two Standard-Setting Boards • The Governmental Accounting Standards Board • The Financial Accounting Standards Board • Two Advisory Councils • Governmental Accounting Standards Advisory Council • Financial Accounting Standards Advisory Council

6. Standard-Setting Boards • FAF has delegated all powers and authority of the Foundation to set standards of financial accounting and reporting to its Boards • GASB • Established by FAF in 1984 • Sets standards for state and local governmental units • FASB • Established by FAF in 1973 • Sets standards for public, private, and not-for-profit enterprises

7. Advisory Councils • Comprised of Constituents • GASAC/FASAC interact with the Boards on • Technical issues on the Boards agendas • Project priorities • Matters likely to require attention • Selection and organization of task forces

8. Constituents • Investors • Creditors • Preparers • Suppliers of financial information • Reporting entities • CPAs • Taxpayers • Donors • The public

9. FASAC GASAC User Advisory Council Small Business Advisory Committee Emerging Issues Task Force Investor Task Force Project Task Forces IASB SEC PCAOB Bank Regulators Public Hearings, Roundtables Liaison Meetings Comment Letters Public Board Meetings Constituent Involvement Due Process Channels Include:

10. Independence • Constituents have many competing interests • FAF ensures independent environment that protect investors and enhances public trust • Independence from political and commercial influence is key to our mission • Since 1973, FAF has committed to protect the independence and integrity of our financial reporting system

11. FAF Board of Trustees • 16 Trustees with business, professional, and government experience • 3 Government Officials • 3 Certified Public Accountants • 2 Financial Executives • 1 Investment Professional • 1 Investment Banker • 1 Accounting Educator • 5 At-Large • 3-year term, eligible for reappointment to a second 3-year term

12. FAF Nominating Organizations • 6 Financial Organizations nominate 8 trustees: • American Accounting Association (1) • AICPA (3) • CFA Institute (1) • Financial Executives International (1) • Institute of Management Accountants (1) • Securities Industry Association (1) • 2 Governmental Organizations elect 3 trustees • Government Finance Officers Association • National Association of State Auditors, Controllers, and Treasurers • 5 At-Large Trustees

13. FASB Codification • Major multi-year project • Purpose is to develop a comprehensive codification of all existing accounting literature • Easily retrievable database will be maintained • Codification will be immediately updated upon issuance of new standards

14. FAF/XBRL Connection • Mission includes the advancement of financial reporting • Accurate, transparent and accessible financial reporting information protects investors • Oversee the FASB and GASB • Established constituent relationships and processes • Experience with sophisticated initiatives balancing timeliness and constituent input • Proven leadership, capabilities, and organizational structure • Funding to advance financial reporting

15. FAF View of XBRL • Interactive data platform is essential for financial reporting • XBRL is the technology to enable this platform • Financial reporting taxonomy development will be the catalyst: • Preparers do not have all the tools • Software developers do not have clarity • Investors do not know what they are missing • XBRL – based financial reporting will: • Favorably impact the capital markets • Become an integral part of the standard setting process

16. FAF Role To Date • Partnered with SEC and XBRL-US to move initiative forward • Leveraged FAF constituency to: • Assess development efforts and direction • Identify reasons for lack of progress • Proposed a Taxonomy Development Model to advance financial community dialogue and commitment • Undertook a comprehensive feasibility study

17. FAF Taxonomy Development Model • Financial reporting taxonomies developed and maintained by the FAF • Taxonomies to be financial reporting centric and efficiently leveraged for broader application • Software development approach with Alpha, Beta and Release Phases • Constituent involvement through Advisory Council and Beta phase • Secure access to Intellectual Property • Secure commitments for full funding

18. FAF Feasibility Study • Authorized by FAF Trustees in May • Detailed study conducted June-October • Collaborative effort with XBRL and other constituents • Focus of study: • Strategic considerations • Organizational structure • Operating plan • Budget and funding • IP and other legal matters • Risks and opportunities

19. FAF Commitment • Assume leadership role in financial reporting taxonomy development and maintenance • Contracts with XBRL-US • $3 million in funding • Supplements SEC’s $5.5 million commitment • Fully funds financial reporting taxonomy development project • Access to FASB financial accounting and reporting expertise

20. XBRL Project Phases • Project documentation • Alpha Phase • XBRL technology and accounting subject matter experts create and internally test Alpha taxonomies • Advisory Council, XBRL-US, XBRL International and SEC collaboration • Completion of preliminary financial reporting taxonomies • Beta Phase • Field Testing • Investor, preparer, SEC, software developers, data service provider and other interested party involvement • Release Phase • Taxonomies issued for public use

21. FAF Short Term Objectives • Finalize definitive agreements with XBRL-US • Identify and hire project management and technical staff • Recruit XBRL technology and accounting subject matter experts • Secure rights to and safeguard existing Intellectual Property • Implement FAF facility and administrative support

22. Your Role • Commit XBRL technology and accounting subject matter expertise to the project • Commit existing financial reporting intellectual property that you control to the project • Continue to promote XBRL-based financial reporting with capital market participants • Commit to the objective of implementing XBRL based financial reporting on a timely basis with the opportunity for continuous improvement

23. Summary • FAF has a leadership role and responsibility in financial accounting and reporting • Protecting investors and advancing the capital markets • XBRL-based financial reporting will be a significant breakthrough for capital market participants • Successful XBRL financial reporting taxonomy implementation will be a milestone for broader XBRL application • FAF is committed to leading this advancement in financial reporting