Discounting in Financial Statements

Our work on discounting in financial statements aims to provide greater clarity on the conceptual basis that should govern the use of discounting in financial statements.  It currently focuses on two issues.

The first is how income and expenses relating to discounted amounts should be presented and described in the profit and loss account and/or in other comprehensive income (OCI).  Interest is one example of such income and expense, and is significant as it is part of the calculation of Earnings Before Interest and Tax (EBIT). This part of our work will include outreach to investors, to gain an understanding of the presentation that they find most useful. 

The second issue within this work is that of considering the significance and relevance of measuring assets and liabilities by discounting, other where the objective is to estimate fair value.  If a factor that would be reflected in a fair value estimate are excluded (for example, liquidity risk) what does the resulting measurement (and changes in it) mean?