In September the ASB participated in two meetings hosted by IASB. The first was a meeting of world standard setters, which was attended by representatives of thirty nine countries. The meeting focused on two technical issues: accounting by enterprises that are small or medium sized (‘SMEs’) and Reporting Financial Performance. The discussion of these topics was organised round break-out groups: the ASB participants thought that these were helpful and promoted fruitful discussion.
Most participants seemed to support an IASB initiative to develop a reporting framework for SMEs. Most agreed that modifications to the requirements of IFRS would more likely be on issues of disclosure and presentation and only in rare instances on recognition and measurement. It was interesting that the consensus of the meeting seemed to have much in common with IASB’s tentative decisions (made the previous week) which were reported to the meeting only after the break-out groups had reported back.
On Reporting Financial Performance (a joint project between the IASB and the ASB) the break out groups were given the opportunity to discuss a number of discrete issues. Perhaps the most fundamental was whether a statement of comprehensive income with no recycling of previously recognised gains and losses should be required specifically in the context of available-for- sale securities. The considerable support for this was impressive.
The IASB meeting with the eight liaison National Standard Setters took place on the following day. The meeting received an educational report on the background to IASB’s exposure draft on macro hedging and discussed the future working relationship between IASB’s Interpretations Committee (IFRIC) and national interpretation bodies (such as the ASB’s Urgent Issues Task Force).
Much of the meeting was devoted to a discussion of a paper on the principles of measurement of assets and liabilities on initial recognition. Participants showed a keen interest in understanding the relationship between fair value, cost and deprival value approaches to this issue, and the circumstances in which these might lead to different results.
