Measurement on Initial Recognition

Date recorded:

The purpose of the discussion at this meeting was to ascertain whether IASB members object to the publication by the IASB, with a 'wrap-around' invitation to comment, of the discussion paper, Measurement Bases for Financial Accounting: Measurement on Initial Recognition, prepared by staff of the Accounting Standards Board of Canada (AcSB).

IASB members were asked whether the paper appropriately identifies and discusses the issues and whether the Invitation to Comment appropriately positions the paper and asks the right questions to seek useful feedback for the IASB in its future standard-setting activities.

Individual Board members commented that the paper was thorough and that it approached the hierarchy in an appropriate manner. Some Board members expressed concern regarding some of the conclusions, and some expressed concern that some aspects had been omitted from the analysis. For example, it was pointed out that the paper seemed dismissive of the notion that a transaction price agreed on a particular date between a willing buyer and willing seller would result in fair value due to the passage of time if delivery takes place subsequently. The Board agreed to communicate the concerns to the AcSB staff.

Generally, the IASB members were supportive of issuing the document to trigger thought and responses on the issues. The Board asked that it be made clear in the paper that the IASB had not debated the issues and, therefore, that the views therein were not those of the IASB.

The Board discussed whether the Invitation to Comment appropriately positions the paper and asks the right questions in order to provide the Board with information to assist in future standard-setting activities. The Board discussed this in a fair amount of detail, with some IASB members disagreeing with specific points. On the whole, the Board agreed that the introductory remarks should be explicit in explaining where and how the paper fits into the IASB agenda as well as clarifying the relationship with the FASB equivalent document.

Regarding the proposed six-month comment period, some Board members expressed concern that this was insufficient time because about 249 pages of material would require translation into various languages. It was agreed that a summary of the key issues would be inserted into the paper to alleviate this problem.

It is anticipated that the paper would be issued in July 2005.

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