(Morning Only)

Tentative project timetable

The Board considered the tentative project timetable (provided in Agenda Paper 7 of the observer notes) and milestone reports from the project managers. It was noted that in the future, when the technical plan was considered (quarterly) the project page on the website for each project would also be updated. This would ensure more up to date project information is available on the website than is currently the case.

Board members asked staff to clarify the approach to the issuance of documents in relation to the Conceptual Framework. A number of Board members had understood that Exposure Drafts would be issued on different sections as and when they were completed, but final guidance would not be issued until the entire project was complete. The tentative project timetable indicates that final guidance on certain sections (objectives and qualitative characteristics) would be issued concurrent to certain other sections being exposed. Staff members noted that the entire project could take up to seven years, and it would be inappropriate to do nothing with an exposure draft for seven years, and therefore the Board had previously decided to issue final guidance which acknowledged that it could be subject to change when a final 'omnibus' standard was issued. The Board agreed to continue to consider this issue as the project progresses.

The Board noted that the tentative project plan suggests a number of EDs and standards will be issued in the next two years. It was noted that some constituents may become concerned at the sheer volume of projects for which Exposure Drafts or Standards are expected. The tentative project plan represents the best estimates of the project managers at this time, and staff noted that it is generally fairly accurate for the next six months, with the ability to predict accurately being greatly reduced thereafter. Staff noted that of the documents to be issued in quarters one and two of 2006, they only had doubts about the practicality of this in relation to two projects, indicating that seven or more Exposure Drafts can be expected in the next six months. It was noted that items in the project plan only move in one direction - that is projects are not usually completed substantially in advance of the expected date.

It was noted that the issuance of a final standard in relation to non-financial liabilities in Quarter 4 of 2006 was considered a very optimistic estimate.

The Board agreed that appropriate communication of the plan was required. The project plan will not be added to the website until the roadmap for elimination of the reconciliation requirements with US GAAP has been completed, which will probably not be until February. It was agreed that in the future when the Board considers the technical plan they will also consider the proposed communication with constituents.

Precedential topics

The Board had asked staff to prepare a paper explaining what they believe to be 'precedential topics'. The conclusions from the discussion are to be used as an aid for resource allocation decisions.

Staff had defined precedential issues as those that:

• Involve 'cross-cutting' issues (that is, have significant impact on more than one project of the Board);
• The Board has developed significant intellectual capital in relation to such that there is a real possibility of the decisions on these topics contributing positively to the work of the Board;
• Have progressed sufficiently through due process that decisions will be available for use in other projects in the short term; and
• If the Board failed to progress would inhibit work on other projects.

Based on these criteria the staff had identified that work on non-financial liabilities, control and fair value measurement (in that order) was considered precedential. It was noted that certain other issues had far reaching consequences (such as debt/equity) but were insufficiently progressed to be of value to the Board in using 'precedential projects' to shape decisions in other areas.

Some Board members raised the issue of performance reporting, believing that it should also be treated as a precedential project. It was noted that if the performance reporting project would not develop clear characteristics of those items that should go through 'other comprehensive income' rather than net income, this would not be a satisfactory outcome. However, many Board members noted that there is not a robust conceptual basis for putting items through other comprehensive income, rather it is required in response to certain political pressures. The Board agreed that for the purposes of resource allocation, performance reporting should be considered a precedential project.