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Conceptual framework Phase D — Reporting entity

Date recorded:

The staff presented an analysis of comment letters from the recent ED Conceptual Framework for Financial Reporting: The Reporting Entity. The feedback from the exposure draft was generally positive, nonetheless, constituents raised several significant issues that need to be re-deliberated. No formal decisions were made at this meeting.

The Board spent a considerable amount of time discussing whether to include in re-deliberations issues related to the nature of guidance on control in the Reporting Entity Chapter or in the Consolidation guidance on the standard level. The Boards also noted that several other issues need to be included in the re-deliberation process — the combined financial statements, providing separate financial statements as well as perspective of financial reporting (entity perspective vs. proprietary perspective). The Boards did not discuss the issues in detail as they will be subject of separate papers at a later stage. Some Board members expressed their concerns that the Board will re-discuss issues that were already discussed as part of the discussion paper stage or in the remits of the first chapter of the conceptual framework that was finalised earlier this year.

The Boards also discussed the timing of the project and asked the staff to analyse the nature of the issues that need to be re-deliberated. The staff will provide this analysis in November. In general, the Boards noted that given the priorities of the Boards to finish the MoU projects by June 2011, finalising of this project seems to be less urgent. The Boards will decide in November whether given the nature of the issues on the project the Boards could finalise the guidance speedily. Nonetheless, most of the Board members seem to be unconvinced that the Boards will be able to finalise the project in that timeline and in light of the priorities suggested deferring re-deliberations beyond June 2011. The IASB Chairman suggested waiting for the staff analysis in November before making final decision on timing of the project. At that point the Boards will also consider an updated project plan and plan for outreach activities.

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