Five issues were tabled for the Board to consider and on which the staff recommended that:
1. The term 'comprehensive income' is replaced with 'recognised income and expense'.
A lengthy debate took place over this issue and the Board eventually agreed to use the term 'total recognised income and expense' in its literature although preparers would be allowed to use any other description.
2. The titles of the four primary financial statements are:
- statement of financial position,
- statement of changes in equity,
- statement of profit and other recognised income and expense; and
- statement of cash flows.
The Board agreed with the staff recommendation provided the FASB concurs.
3. The term 'profit or loss' is used to describe the mandatory subtotal in the statement of profit and other recognised income and expense (subject to the decision on issue 1 above).
The Board agreed with the staff recommendation on the basis that this issue will be revisited and considered as part of the concepts project.
4. Accumulated other recognised income and expense is presented on the face of the statement of changes in equity, and represents items that have been initially recognised in other recognised income and expense (that is, outside profit or loss) and will be recognised in retained earnings in the future.
The Board agreed with the staff recommendation.
5. The tax effects associated with each component of other recognised income and expense is not required to be disclosed in the financial statements.
The Board agreed to follow the FASB approach which is to require disclosure of tax effects associated with each component of other comprehensive income, either on the face of the statement or in the notes to the financial statements. Joint issues (that is, IASB and FASB)
The Board was asked to consider a memorandum addressing Segment A issues that are common to both the IASB and the FASB with regard to finalising work on Segment A.
Questions asked of the IASB were as follows:
Does the IASB agree that the IASB's Amendment to IAS 1 should be effective for annual periods beginning on or after January 1, 2007, with earlier application encouraged?
The Board agreed.
Do the Boards agree that transitional provisions are not necessary for the forthcoming Statement or Amendment?
The IASB agreed. The FASB will be asked to consider this issue at the forthcoming joint meeting of the two Boards. Do the Boards agree that the comment period should be 120 days? The IASB agreed. The FASB will be asked to consider this issue at the forthcoming joint meeting of the two Boards.
Single statement or two?
The Board was informed of the resistance that seems to be prevalent amongst constituencies about the move to a single statement of profit and other recognised income and expense as opposed to a two statement approach. Board members discussed this issue with many questioning the source of the resistance as there appeared to be no conceptual arguments for a two statement approach besides 'paranoia'. Some Board members indicated that they still had a preference for a single statement and some indicated that they would allow either a single or a two statement approach, whichever route the FASB would find acceptable in order to achieve convergence. The issue was deferred to the forthcoming joint meeting of the two Boards.