The IASB and the FASB met for a special meeting in London to discuss the consolidation project as well as other minor issues. Several IASB members, FASB members and FASB staff joined the meeting via video link or teleconference. Mr. Garnett chaired the meeting. Three IASB members were not present at the meeting.
 Consolidation
Investment companies – disclosures
The Boards discussed the disclosure package for investment companies. The Boards agreed that, in addition to the information currently required to be disclosed (related to fair value under IFRS 7 Financial Instruments: Disclosures), an investment company should be required to disclose whether it has provided any financial or other support to any of its controlled investment that it was not previously contractually required to provide.
The Boards also agreed that an investment company should disclose the nature and extent of any significant restrictions on the ability of its controlled investees to transfer funds to the investment company.
The Boards discussed the proposal to require disclosures of the most recently available summarised financial information for any individually material controlled investee that otherwise would have been consolidated. The Boards disagreed with the proposed disclosures as they noted that if fair value is the most relevant measure, fair value is also the right attribute to be disclosed. As it would often be a level 3 fair value calculation, additional disclosures relevant to the calculation would have to be provided.
One Board member noted that the disclosures on related partiy transactions should be applied in that scenario as they will not be eliminated. The Boards agreed.
The Boards also discussed additional disclosures that are currently required under US GAAP for investment companies. These requirements under US GAAP are standalone requirements for investment companies, whereas under IFRS presentation and disclosure requirements of all other IFRSs would apply to investment companies. The IASB asked the staff to perform a detail comparison of the requirements required under US GAAP and the requirements currently required under IFRSs. The Boards will re-discuss this issue at one of the following meetings.
Disclosures for subsidiaries and unconsolidated structured entities
The Boards continued their discussion about a disclosure package for subsidiaries as well as unconsolidated structured entities. The Boards started by discussing the general disclosure principle. Nonetheless, it was soon clear that the Boards did not agree with the proposed principle as they believed that it confused structured and operating entities as well as consolidated and non-consolidated entities. The FASB members suggested taking the principle in Statement 167 as the basis. The Boards will revisit the principle at the following Board meeting.
On more specific disclosures, the IASB members tentatively agreed to require disclosure of a list of individually material subsidiaries containing the name, country of incorporation and as well as proportion of interest and summarised financial information. The FASB members were reluctant to require such disclosure.
With regards to the unconsolidated structured entities, the Boards decided that a reporting entity has an involvement with an unconsolidated structured entity that is relevant for disclosure purposes when it is exposed to the variability of returns of that entity.
The Boards discussed whether the disclosure requirements for unconsolidated structures entities should apply only to a reporting entity's involvement with entities that exposes the reporting entity to significant variability of returns. Many Board members were uncomfortable with inclusion of the word significant. The FASB members noted that under US GAAP, the reference to significant has been recently deleted. The Boards preliminary agreed not to refer to significant in the next due process document. The IASB asked the FASB to undertake an outreach on the practicalities of that change under US GAAP. Based on the results of such outreach, the Boards would re-discuss the issue at one of the next meetings.
After a brief discussion the IASB agreed to require disclosure of income from involvements with structured entities that the reporting entity has set up or sponsored as well as the fair value of assets recognised by those structured entities at the time that these structured entities are established. Both these disclosures would be requires regardless of whether the assets of the structured entities were acquired from a third party.
The FASB disagreed with this disclosure requirement as they believed it should be covered by the general disclosure principle.
The Boards agreed that the further specific disclosures will be discussed at a next meeting together with the general disclosure objective. In particular the Boards would like the staff to address the question when the financial instruments disclosures are relevant and when the consolidation guidance should apply. Some Board members were uncomfortable with prescribing these disclosures to normal commercial truncations (such as an insurance policy or bank guarantee).
Presentation of Comprehensive Income
The Boards discussed the title of the statement of comprehensive income. After a very brief discussion the IASB with a large majority of votes supported the alternative to call the statement of comprehensive income 'Statement of Profit or Loss and Other Comprehensive Income'. The IASB members suggested that this change would better reflect the nature of the statement and would help to gain the Board a more positive reaction to its proposal. Nonetheless, usage of the new title will not be prescribed.
The FASB disagreed and decided to retain the original title. The FASB members noted that the current title is understood and the change could be seen as trying to hide the true nature of the change.
Finally, the Boards agreed to go with two different names, one in the US GAAP literature and one in the IFRSs literature with the reference to the other as an alternative name (similar to the reference to 'Profit or Loss' under IFRSs and 'Net income' under US GAAP).
Conceptual Framework – Measurement
The Boards discussed the next step in the measurement chapter of the conceptual framework. The Boards unanimously disagreed with the staff proposal to develop a neutral discussion paper. Given the fundamental importance of the issues and relevance of them to constituents, the Boards decided to develop a preliminary views paper and deliberate the questions. Without discussing any question at the meeting, the Boards asked the staff to base the agenda papers for deliberations on the list of issues identified in the staff paper.
One IASB member noted that the questions to constituents should be based on the issues on which the Boards would not reach consensus together with alternative views. In addition, he suggested that the questions to constituents should also focus on the usage of particular measurement attributes (fair value, amortised cost, expected value) that the Boards struggled to use consistently at the Standard level. The Boards agreed.
This summary is based on notes taken by observers at the joint IASB-FASB meeting and should not be regarded as an official or final summary.
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