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• We support the increased use of fair values for financial instruments in financial statements as part of the evolutionary process that may ultimately result in a full fair value accounting model for financial instruments. However, we will not support the recognition in the income statement of changes in the fair values of financial instruments that are not being held for trading until issues relating to performance reporting and fair value measurement are resolved.
• We believe that a movement to fair value accounting should be an evolutionary process that is accomplished in stages. IAS 32 started the movement by requiring disclosures of fair values of financial instruments. IAS 39 continued that movement by requiring that all derivatives and most financial instruments be reported at fair value. We believe the next step in the evolution could be a partial increase in the use of fair value accounting.
• We recommend that the next step in the process of moving to fair value accounting for financial instruments be accomplished by amending IAS 39 to eliminate the use of amortized cost for originated loans, held-to-maturity financial assets and financial liabilities. Enterprises would have a choice of recognizing changes in fair value in equity or in the income statement, except that there should be no choice for financial instruments held for trading. Enterprises would continue to be permitted to use hedge accounting.

The schedule for the Washington meetings:

• Monday 15 October 2001: Trustees meeting
• Tuesday and Wednesday 16-17 October 2001: IASB meets with Advisory Council
• Thursday-Saturday 18-20 October 2001: IASB Board meeting

We have posted updated versions of Deloitte Touche Tohmatsu's Model IAS Financial Statements and Presentation/Disclosure Checklist reflecting Standards and Interpretations that are in effect for financial reporting in 2001. Click:

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• We strongly support the development of an international accounting standard for mining and oil and gas companies.
• At the current time, an historical cost concept is more appropriate for accounting for the extractive industries than a model of accounting based on an estimate of the fair values of mineral properties and reserves.
• Within the context of an historical cost model, there is an urgent need to achieve consistency in recognition, measurement, and subsequent depreciation of extractive industry related assets, particularly pre-production expenditure. We favour the following treatment of pre-production costs:
  • Preacquisition prospecting and exploration: Charge to expense
  • Property acquisition (direct and incidental): Capitalise
  • Post-acquisition exploration: Capitalise
  • Evaluation or appraisal costs: Capitalise
  • Development cost: Capitalise
  • Construction cost: Capitalise
  • All capitalised costs are subject to depreciation and an impairment test based on disposal value of the acquired rights

We have updated the country information pages for

• Australia,
• China,
• Hong Kong,
• India,
• Indonesia,
• Malaysia,
• Philippines,
• Pakistan,
• Singapore,
• Taiwan, and
• Thailand.