20-23 January 2004, London

Tuesday 20 January 2004

Short-term Convergence: Asset Disposals and Discontinued Operations

The Board continued its deliberations of ED 4 by addressing issues raised in the comment letters on question 5-9 in the Exposure Draft.

Question 5 asked for comments on the proposed accounting for impairment losses arising from revalued assets. The Board retained its requirements in ED 4 that revaluation decreases (and revaluation increases) should be accounted for in accordance with the standard under which the assets were revalued upon initial classification as held for disposal. The change in valuation related to the recognition of costs to sell should be included in profit or loss for the period.

The Board decided that the measurement of current and non-current assets under IAS 40, Investment Property, and IAS 41, Agriculture, would continue under those standards. That is, if an asset is accounted for at fair value under IAS 40 or IAS 41, it would be outside of the scope of ED 4 if held for sale as an individual item. Non-current assets previously accounted for under IAS 40 and IAS 41 would, however, be within the scope of ED 4 if part of a disposal group.

Question 6 of the Exposure Draft asked for comments on the proposed removal of the exemption from consolidation for subsidiaries acquired and held exclusively with a view to resale. The Board confirmed the decision in ED 4 to remove this exemption. Several members of the Board were clearly concerned about practicability issues and suggested a single line item be presented on the balance sheet that would be marked to market (therefore avoiding a requirement to assign fair values in the purchase price allocation). In the end, the Board noted that this project was on the agenda as a convergence project and that a consistent approach with FAS 144 was desired.

Regarding Question 7, the Board reaffirmed that assets and liabilities of the disposal group should be presented separately on the balance sheet. Additionally, items representing revenue, expenses, pre-tax profit and loss and tax of the operations held for disposal (along with any gain or loss on remeasurement) shall be presented.

Question 8 asked for comments on the criteria for when a component of an entity should be classified as a discontinued operation. The Board noted serious concern over the proposal in the Exposure Draft as a result of comments received. For example, the Board was comfortable that a men's clothing store that decided not to sell shoes anymore would have a discontinued operation. However, the Board was not comfortable with the fact that the current wording in ED 4 would require the sale of an investment property by a Real Estate Investment Trust (REIT) to be classified as a discontinued operation. A company (such as a REIT) that buys and sells items as part of its primary business would then have a discontinued operation every year. Additionally, the requirement to restate prior periods for the discontinued operation would render the comparative period continuously invaluable.

The Board is concerned about this issue and suggested further work be done in this area before a final standard could be issued. The Board noted the EITF is addressing this issue. However, some Board members noted that if this issue cannot be solved, they would view ED 4 as not operational. The Board will address this further at its February meeting.

Question 9 addressed the presentation of discontinued operations in the income statement. The Board concluded that it would not require that revenue, expenses, pre-tax profit or loss, and any related tax expense be separately presented on the face of the income statement. If a single item (net of tax expense) is presented on the face of the income statement for discontinued operations, separate presentation of revenue, expenses, pre-tax profit or loss, and related tax expense is required in the notes to the financial statements.

The Board discussed some concerns over whether the application of IAS 8 on the transition to the proposed standard would be operational. The Board decided to clarify that retrospective application would be allowed only when the information to comply already exists. This wording would incorporate aspects of the definition of impracticability in the revised IAS 8 and the wording in ED 2 on the retrospective application of that standard to share-based payments prior to the effective date.

The Board also confirmed that assets from insurance contracts (such as deferred acquisition costs) would be within the scope of ED 4.

Post-Employment Benefits

The limited revision to IAS 19 includes:

• adding an option to recognise actuarial gains and losses outside of the income statement,
• adding an exemption from defined benefit plan accounting for subsidiaries, and
• additional disclosures.

During the discussions, it was noted that six Board members would potentially dissent because of the proposed exemption for subsidiaries from defined benefit plan accounting. One Board member noted that the subsidiary could dividend up to the parent the plan contribution without recognising an expense under this proposal. The Board will address this issue further at its February or March meeting.

The Board decided to add the following disclosure requirements to IAS 19:

• A reconciliation of beginning and ending balances of the benefit obligation showing separately, if applicable, the effects during the period attributable to each of the following: service cost, interest cost, contributions by plan participants, actuarial gains and losses, foreign currency exchange rate changes, benefits paid, plan amendments, business combinations, divestitures, curtailments, settlements, and special termination benefits.
• A reconciliation of beginning and ending balances of the fair value of plan assets showing separately, if applicable, the effects during the period attributable to each of the following: actual return on plan assets, foreign currency exchange rate changes, contributions by the employer, contributions by plan participants, benefits paid, business combinations, divestitures, and settlements.
• A narrative description (along with amounts) of the basis used to determine the overall expected long-term rate of return on assets assumption, such as the general approach used, the extent to which the overall rate of return on assets assumption was based on historical returns, the extent to which adjustments were made to those historical returns in order to reflect expectations of future returns, and how those adjustments were determined.
• The employer's best estimate, as soon as it can reasonably be determined, of contributions expected to be paid to the plan during the next fiscal year beginning after the date of the latest statement of financial position presented. Estimated contributions may be presented in the aggregate combining (1) contributions required by funding regulations or laws, (2) discretionary contributions, and (3) noncash contributions.
• Sensitivity analysis for all key assumptions on the aggregate of the service and interest cost components of the benefit costs.
• Any substantive commitment, such as a past practice or a history of regular benefit increases, used as the basis for accounting for the benefit obligation should be disclosed in the summary of the plan.

Wednesday 21 January

Revenue Recognition

The Board discussed several issues related to the enforceability of contracts under the conceptual model for assets and liabilities arising from contractual rights and obligations.

The staff noted that the discussion related to sales agreements that are enforceable, legally or otherwise. It was further noted that "enforceable" may differ in different legal jurisdictions.

The Board agreed that this would be incorporated into a definition for clarity. This would avoid a need to describe any underlying features of a legal agreement.

The staff expressed a view that it does not change whether there is an intention to enforce the contract. The Board agreed but noted that this may have an impact on measurement.

In addition the staff noted that this would apply equally to probability. The Board agreed. Certain Board members noted that this would need an amendment to the IASB Framework. The Board agreed that if this was the conclusion when everything was brought together the Framework would need to be amended.

The Board agreed that cancellation rights do not render contracts unenforceable and would affect measurement.

Business Combinations Phase I

Intangible Assets

The Board considered removing the current requirement on residual values on intangible assets with a finite life. This was suggested because:

• The requirement for the residual value of an intangible asset to be assumed to be zero was initially included in IAS 38 as a means of preventing entities from circumventing the requirement to amortise all intangible assets. For example, by claiming that the residual value of an intangible asset was equal to or greater than the asset's carrying amount, an entity could avoid amortising the intangible asset because its depreciable amount would be nil.
• This rationale will not be relevant under the revised version of IAS 38, given that intangible assets with indefinite useful lives will not be amortised.
• It is reasonably plausible that an intangible asset, such as software, might be sold before the end of its economic life. In such cases, its residual value, as defined in IAS 38, would not be zero irrespective of whether the current conditions are met.

The staff noted that they did not disagree with the above analysis but believed the change would require re-exposure and recommended that the Board do not change the requirement. The Board agreed.

The Board previously agreed to include guidance on measuring the fair value of an intangible asset. It was noted that if the fair value of an intangible asset acquired in a business combination cannot be measured reliably, it is not recognised separately from goodwill. It has been suggested that:

• If the fair values of complementary assets cannot be individually determined, an entity should be required to recognise, rather than not precluded from recognising, those complimentary assets as a single asset, so as to ensure such assets are not inappropriately subsumed within goodwill.
• The requirement for the complimentary assets to have similar useful lives should be removed. As noted above, although some intangible assets are so closely related to other identifiable assets or liabilities that they are usually sold as a package, it would still be possible to measure reliably the fair value of that package. If the requirement for similar useful lives is not met, the fair value of that package would be subsumed in goodwill. Board members have suggested that more useful information is provided if the package is recognised separately from goodwill.

The staff proposed that the guidance be changed to:

• (a) an intangible asset acquired in a business combination might be separable, but only together with a related tangible or intangible asset. For example, a magazine's publishing title might not be able to be sold separately from a related subscriber database, or a trademark for natural spring water might relate to a particular spring and could not be sold separately from the spring. In such cases, the acquirer recognises the complementary assets as a single asset separately from goodwill if the individual fair values of the complementary assets are not reliably measurable.
• (b) similarly, the terms 'brand' and 'brand name' are often used as synonyms for trademarks and other marks. However, the former are general marketing terms that are typically used to refer to a group of complementary assets such as a trademark (or service mark) and its related trade name, formulas, recipes, and technological expertise. The acquirer recognises as a single asset a group of complementary intangible assets commonly referred to as a brand if the individual fair values of the complementary assets are not reliably measurable. If the individual fair values of the complementary assets are reliably measurable, an acquirer is not precluded from recognising them as a single asset, provided the assets that make up that the group have similar useful lives.

The Board agreed subject to some wording changes (for instance, "complementary" would be changed to "package").

Business Combinations

The Board agreed to include an amended objective paragraph.

The Board considered the proposed requirements when an entity uses provisional values. The staff recommended that this be amended to require restatement of prior reported numbers when the values are finalised. It was noted that the Basis for Conclusions should reflect that this is not an error.

The Board discussed the requirement to not recycle goodwill previously written off against equity. The Board agreed not to change the current proposal.

Impairment

The Board previously decided that if the initial allocation of goodwill acquired in a business combination could not be completed before the end of the annual period in which the business combination is effected, that initial allocation should be completed before the end of the first annual period beginning after the acquisition date. It was queried why this was different to the time required to finalise asset values.

The Board agreed not to change the requirement but to include an explanation as to the differing requirements in the Basis for Conclusions.

As part of the Board's recent improvements to IAS 16, Property, Plant and Equipment, IAS 36 was consequentially amended to require the future cash flows used in measuring an asset's value in use to exclude estimated future cash inflows or outflows expected to arise from future costs to add to, replace part of, or service the asset. However, IAS 36 was also consequentially amended to require estimates of future cash flows to include future costs necessary for the 'day-to-day servicing of the asset.

The staff recommended that, for consistency with IAS 16, IAS 36 continue to require estimates of future cash flows for measuring an asset's value in use to include future costs necessary for the day-to-day servicing of the asset.

However, the staff also recommended that, for consistency with IAS 16, the requirement for the estimates of future cash flows to exclude 'costs to service the asset' be amended to require the estimates to exclude 'costs for major inspections'.

The Board agreed.

The Board considered whether the description as to the level at which goodwill is tested for impairment, together with the additional guidance, properly convey the Board's intention on this issue.

The staff believed that the wording used properly conveyed the Board's intention on the level of the goodwill impairment test and recommended that no changes be made.

The Board agreed subject to some wording changes.

Thursday 22 January

Business Combinations Phase I (continued from 21 January)

The Board discussed the measurement of the recoverable amount of a cash generating unit when the price paid for the CGU is based on projections that include major restructuring costs (which must be excluded from the recoverable amount calculation). The Board was concerned that the current wording in the Exposure Draft would require the recognition of an immediate loss. The Board intends to clarify that a recent price paid for a CGU is likely to be the best source of its fair value to avoid recognition of this immediate loss.

Insurance Contracts Phase I

The Board continued its review of comments received on ED 5, Insurance Contracts.

Measurement of Investment Contracts

The Board discussed which costs should be capitalised for investment contracts and concluded that there should be symmetry between the final standard on insurance and the requirements in IAS 39. That is, only items that are integral to the effective yield should be recognised. The asset should be written-off over the life of the contract.

Discretionary Participation Features

The Board discussed the accounting for discretionary participation features. The Board concluded that a minimum liability be recorded equal to the determinable participation amount. The Board further noted that the remainder should also be recorded as a liability-unless an entity can prove that an amount relates to equity. The Board noted that consideration of whether a constructive obligation exists should be considered.

There was concern about how to measure the liability under IAS 39 after initial recognition (which requires fair value or amortised cost). The Board concluded that companies can continue using the method used for initial recognition (similar to an IAS 37 amount). The Board noted that a company should disclose its accounting policy for discretionary participation features.

Assets Backing Insurance Contracts

The staff provided a summary of the potential approaches previously discussed. The staff noted that discussions with a number of insurance entity CFOs had indicated that they did not want to use the held to maturity classification for investments with credit risk exposure as these may need to be sold if there was an anticipated deterioration in the credit rating of the investment. In addition they were concerned about potential sales to meet cash flows arising from a high level of unanticipated lapses or a catastrophe.

The staff recommended that the Board not pursue further any specific treatments to eliminate the effect of the 'mismatch' caused by the use of fair value for some assets backing insurance liabilities and cost-based measurements for some insurance liabilities.

The Board agreed with the staff recommendation (11 - 3).

They further agreed to incorporate guidance on alternative treatments, which would be directionally towards fair value for liabilities, in line with the allowance to adopt a better accounting treatment assessed in accordance with the framework. It was discussed that this may include applying a current interest to some but not all of the insurance liabilities. The Board agreed that this could be done.

The staff proposed an amendment to IAS 40, Investment Property, to allow a different election to be made between the cost and fair value models in respect of investment property backing contracts that pay a return linked directly to the fair value of, or returns from, assets including that investment property and other investment property.

The Board agreed and noted that this did not need to be re-exposed.

The staff noted that if an insurer elects to use shadow accounting in respect of owner-occupied property, changes in the liability relating to revaluations of the property would be recognised directly in equity, through the statement of changes in equity.

The staff proposed that no exemption should be provided in respect of the elimination of internal transactions. The Board agreed.

Financial Guarantees and Credit Insurance

The staff proposed that a financial guarantee contract should be within the scope of IAS 39 if it is not an insurance contract. A financial guarantee will qualify as an insurance contract if it requires the issuer to make specified payments to reimburse the holder for a loss it incurs because a specified debtor fails to make payment when due under the original or modified terms of a debt instrument, provided that the resulting risk transfer is significant. The Board agreed with the staff proposal but required the accounting treatment stipulated for financial guarantees in IAS 39. (Initially at fair value and subsequently under IAS 37 if higher.)

Embedded Derivatives

The staff proposed that the loss recognition test should not require an insurer to consider cash flows from all embedded guarantees and options. The staff noted that they believed this was consistent with the interpretation of ED 5. Certain Board members expressed concern that this was not what they believed had been proposed in ED 5.

The Board agreed with the staff's proposal provided there is disclosure of whether they have been included or not.

In addition the staff proposed that a derivative embedded in an insurance contract should be regarded as closely related to the host insurance contract if the embedded derivative and host insurance contract are so interdependent that an entity cannot measure the embedded derivative separately (ie without considering the host contract).

The Board agreed.

Discretionary Participation Features

The staff recommended giving no specific guidance on the treatment of unallocated deficit. The Board agreed.

The staff recommended that the continued presentation of the premium for contracts with discretionary participation features, as revenue, both for insurance contracts and for investment contracts be permitted.

It was noted that this would allow the inclusion of the receipt of a premium in respect of a financial instrument in Revenue. The Board agreed.

It was also noted that this would allow the inclusion of both the liability and equity component in Revenue. The Board agreed that the equity component should not be in Revenue.

Disclosures

The staff tabled proposed disclosures as currently drafted (see IASB observer notes). It was noted that further changes would be made.

Income Tax

The staff recommended that standard not deal with issue of the tax on the 'policyholder portion' of investment income being included within income taxes in the income statement. The Board agreed.

The staff recommended that the standard not allow discounting of deferred tax relating to insurance contracts. The Board agreed and noted it was already discounted.

Transition and Effective Date

The staff recommended the following for both entities already applying IFRSs and first-time adopters:

• The standard should be mandatory for annual periods beginning on or after 1 January 2005. Early adoption should be encouraged.
• There should be an exemption from applying the standard to comparative information that relates to annual periods beginning before 1 January 2005. Entities should be permitted to adopt the recognition and measurement components of the proposed standard early as a complete package.
• An entity need not disclose information about claims development that occurred earlier than five years before the end of the first financial year in which it applies the standard. Furthermore, it may be impracticable to disclose information about claims development that occurred before the beginning of the earliest period for which an entity presents full comparative information under the standard. If so, an entity should disclose that fact. IAS 8 (revised) explains the meaning of the term 'impracticable'.
• When an insurer changes its accounting policies for insurance liabilities, it should be permitted, but not required, to reclassify some or all financial assets as 'at fair value through profit or loss'. This reclassification should be permitted if an insurer changes accounting policies when it first applies the standard and if it makes a subsequent policy change permitted by the standard. The reclassification is a change in accounting policy and IAS 8 should apply.

The Board agreed but would only apply the exemption in respect of comparative information to certain limited items and would add an impracticable allowance.

The Board considered the changes to ED 5 both individually and collectively and decided that no re-exposure was necessary (13-1).

Five Board members indicated that they would dissent from the standard and one Board member indicated uncertainty as to whether they would dissent or not.

Friday 23 January

Financial Instruments - Macro Hedging – The Board will continue its review of comments received on the ED, Financial Instruments - Fair Value Hedge Accounting of a Portfolio Hedge of Interest Rate Risk.

Core Deposits

The ED proposed that a core deposit cannot qualify for fair value hedge accounting for any time period beyond the shortest period in which the counterparty can demand payment.

The staff noted that many respondents requested that core deposits be included in a portfolio hedge by scheduling them to the date when, based on conservative assumptions, the entity expects the total amount of core deposits in the portfolio to fall because of net withdrawals. This expected repayment date is typically a period several years into the future.

The Board considered an alternative approach of including core deposits in a portfolio hedge based on the expected repayment date of the existing balance (ignoring any replacements of existing deposits by future new deposits). The Board also considered under this approach whether the expected repayment date of the existing balance should be determined by:

• attributing outflows of cash to the oldest deposits making up the existing balance (a 'FIFO approach'). Applied to a chequing account, this approach would likely give an expected life of a few months; or
• attributing outflows of cash to the most recent deposits making up the existing balance (a 'LIFO approach'). Applied to a chequing account, this approach would likely give an expected life for a 'base level' or 'minimum balance' on the account of many years.

The Board also considered whether the above would imply it should also change in its view as to what is the fair value of such a core deposit or whether the fair value of a core deposit cannot be less than the present value of the amount that the depositor can demand (which is the present requirement of IAS 39), but that there is also an intangible asset for the customer relationship (a 'core deposit intangible') whose value changes as interest rates move and hence that might qualify as the hedged item in a fair value hedge of interest rate risk.

The staff recommended that:

• a. The proposal in the ED that a core deposit cannot qualify for fair value hedge accounting for any time period beyond the shortest period in which the counterparty can demand payment be reconsidered.
• b. A core deposit be permitted to be included in a portfolio hedge of interest rate risk based on the expected repayment date of the existing balance. Rollovers or replacements of existing deposits by new deposits would not be included in the expected repayment date.
• c. Consistent with (b), the expected repayment date of the existing balance is determined using a FIFO approach.
• d. Consistent with (b), the requirement in IAS 39.49 for fair valuing core deposits be changed to read as follows:
  
  "The fair value of a financial liability with a demand feature (eg a demand deposit) is not less than the amount payable on demand, discounted from the first date that the amount could be required to be paid reflects when the amounts payable are expected to be paid. Rollovers or replacements of existing liabilities by new liabilities (eg from new deposits being made into a demand deposit account) are excluded in estimating when the amounts payable are expected to be paid."
• e. IAS 39 requires that any difference between the fair value on initial recognition of a core deposit and the amount deposited is recognised as a separate liability, being prepaid servicing costs, and is amortised on a systematic and rational basis over the expected life of the deposit.

The Board did not support the staff's recommendations and retained the approach to core deposits as exposed. They reiterated that cash flow hedging remained available and requested the staff to continue working on the core deposit measurement issue.

The Board further agreed that hedging of fixed term accounts should also be considered further.

Designation and Hedge Effectiveness

The staff gave a brief recap of the exposure draft's proposals as follows:

• The hedged item may be designated as an amount of assets or liabilities rather than as individual assets or liabilities.
• Although the portfolio may include, for risk-management purposes, assets and liabilities, the hedged item is designated is an amount of assets or liabilities. Designation of a net amount including assets and liabilities is not permitted.
• When the hedged item is based on expected repricing dates, the effect that changes in the hedged interest rate have on those expected repricing dates shall be included when determining the change in the fair value of the hedged item. Accordingly, when interest rate changes cause prepayment estimates to change, hedge ineffectiveness will arise, both when such changes cause the entity to become over-hedged and when they cause it to become under-hedged.

The staff provided details of comments on those issues.

The staff recommended the following:

• a. The proposal that the net position cannot be designated as the hedged item be retained.

  The Board agreed.

• b. When the hedged item is designated as an amount, guidance on how that amount is to be determined is retained. The method for designating the hedged item and measuring effectiveness should not be left completely open .

  The Board agreed.

• c. A method of designation that results in ineffectiveness when interest rate changes cause prepayment estimates to change, regardless of whether such changes cause the entity to become over-hedged or under-hedged should be retained. That is, the requirement that the change in the value of a hedged prepayable asset that is attributable to interest rates should include the effect that interest rates have on prepayment rates should be retained. However, this may be achieved in one of two ways:
  • If the prepayment option is required to be separated and measured at fair value, or if the entity is able to separately measure the fair value of a non-separated prepayment option, it should use this method. (It was clarified that this would merely be a more precise measure than what is allowed below.)
  • In other cases, the entity should use the percentage method proposed in the exposure draft.

  The Board agreed. It was noted that this meant that prepayments as a result of interest rate changes needed to be included in the hedge.

• d. It should be clarifed that when prepayment estimates change because of factors other than changes in interest rates, no ineffectiveness arises.

  The Board deferred a decision on (d) unless the staff provided further details and proposed wording.

3 Board members indicated that they may dissent based on decisions to date.

Leases

It was noted that the Board had previously discussed the foundations for a model for lease accounting based on the analysis of contractual rights and obligations and the identification of resulting changes to assets and liabilities.

The Board continued by considering accounting for cancellation and renewal options in leases applying this model where the options are under the control of the lessee.

The Board considered the following examples using a ten year lease with an option to cancel after three years.

Example A: Lessee has an option to renew at a market rent at year 3.

The staff proposed that in the first three years the lessee and lessor had unconditional rights to use the equipment, receive payment, and have the equipment returned at the end of the lease and corresponding obligations.

In years four to ten they had a conditional right and obligation to receive and make payment. In addition there is an unconditional right to make use of the equipment and an unconditional obligation to 'stand ready' to provide the equipment.

The Board agreed with the staff's analysis.

Example B: Lessee has an option to renew at year 3 at a rent that is predetermined at the beginning of the lease.

The staff proposed the same analysis as for example A but noted that the call option may have an initial value.

In addition the staff noted an alternative view to recognise the entire 10 year lease term on delivery of the equipment if it is considered probable that the Lessee will keep the equipment for the full term.

The Board indicated a level of discomfort with the alternative view.

Example C: Lessee has an option to cancel at year 3; a cancellation payment is required.

The staff proposed the same analysis as for example B but that the cancellation payment is accrued over the first three years and deducted evenly from the payments in years four to ten if the lease is not cancelled.

Example D: Lessee has an option to cancel after a minimum period of 12 months; no cancellation payment is required.

The staff proposed a similar analysis to example A. The staff noted that the lessor may expect renewals and this may indicate the existence of an intangible asset.

Example E: Lessee has an option to renew at year 3 at a rent that is predetermined at the beginning of the lease and below the expected market rent (this type of arrangement is sometimes referred to as a 'bargain renewal').

The staff proposed the same analysis as for example B.

The staff noted the following example related to rentals contingent on the lessee's usage:

A lessee enters a three-year lease on a motor vehicle at an annual rental of CU 10,000. In addition, an extra CU 1 per mile is payable if the lessee exceeds 60,000 miles. The excess mileage charge reflects fair compensation for the additional wear and tear of the vehicle.

The staff proposed the following analysis:

• The lessee has an unconditional right to use the vehicle for 3 years or 60,000 miles and an unconditional obligation to pay CU 30,000 to the lessor.
• The lessee does not have an obligation to pay more than CU 30,000. The lessee has an unconditional right to obtain use of the vehicle for more than 60,000 miles. However, the lessee's actual right to use the car for more than 60,000 miles is conditional on the lessee assuming another liability.
• The lessor has an unconditional right to receive CU 30,000 and to have the vehicle returned when the lease comes to an end.
• The lessor has a conditional right to receive consideration for excess mileage. The lessor also has an unconditional obligation to stand ready to make the excess mileage available to the lessee at a predetermined price.

The staff believes that the call option over additional use represents a present unconditional right of the lessee (so may be an asset) and a present unconditional obligation of the lessor (so may be a liability). However the option may have little value at inception of the lease.

In addition the staff noted an alternative view will be considered of accounting for the expected value of the contingent rent payments at inception of the lease.

The Board expressed concerns as to both of the above views.

IFRIC Update

The Board noted a report on IFRIC's activities.

This summary is based on notes taken by observers at the IASB meeting and should not be regarded as an official or final summary.