The Board continued its discussions from its April meeting regarding potential initial agenda topics. However IASB did not make any formal agenda decisions because it must first discuss its proposed agenda with the Standards Advisory Council (SAC). SAC is expected to be constituted soon, and a July meeting is likely. Following the SAC meeting, IASB will probably discuss the agenda again with the national standard setters before making formal agenda decisions.

Based on Board discussions, the following appear to be relatively high priority projects:

• Improvements Project
• Transition to IAS and First Time Application of IAS
• Reporting Financial Performance
• Distinguishing Between Liabilities and Equity
• Consolidation Policy, especially Special Purpose Entities
• Share-Based Payments
• Measurement (fair value vs. other measurements bases) including Present Value.
• Other Conceptual Framework Issues, including definitions of the elements of financial stastements, liability recognition, and revenue recognition
• Insurance Contracts
• Business Combinations: whether to eliminate uniting of interests (pooling), accounting for goodwill (amortisation/impairment or impairment model), and common control transactions
• Measurement of Financial Instruments
• Derecognition of Assets and Liabilities
• Financial Reporting by Small Entities
• Research and Development Costs or possibly a broader project on Intangibles

IASB met with the chairs or other representatives of eight leading national standard-setting boards: Australia, Canada, France, Germany, Japan, New Zealand, United States and United Kingdom. Support for the IASB and for convergence emerged from the discussions. An approach to achieving convergence was considered:

• IASB and the national standard-setters would agree on convergence projects and, to the extent possible, each would place them on their agendas.
• One national standard setter would be the leader on a project, one or more others would agree to provide project support resources, and one or more others would agree to be consultants.
• Flexibility would be needed to accommodate the varied due processes of the national standard setters.

IASB decided that International Financial Reporting Standards (IFRS) should not distinguish between black (bold type) and grey letter (plain type) paragraphs. IASB will expose that decision for public comment.

Other stylistic changes to standards agreed to were:

• IFRS will include a "main features" section at the beginning and a definitions section at the end of the standard.
• The word "should" as used in IAS will be replaced by "shall" in IFRS to provide clearer indication as to what is required.
• The word "enterprise" as used in IAS will be replaced by "entity". This will reflect IASB's focus will be on reporting issues for entities participating in international capital markets.

A subcommittee of IASB was appointed to consider the 400 pages of suggestions received from IASB consistuents regarding Improvements to existing IAS. The subcommittee will also consider areas in which alternatives might be eliminated. The subcommittee will meet in June and report to the June Board meeting.

The IAS 39 Implementation Guidance Commiittee (IGC) should finalise the 5th and 6th batches of questions and answers on IAS 39. IGC should continue to answer further questions during in the first year of the Standard's implementation.

The Board considered a draft revision to the preface to IAS and proposed a number of additional changes. A further draft will be considered at the June meeting.

The Board briefly discussed the issue of first-time application of IAS. A paper is to be tabled at the June Board meeting.

The Board was informed that the Standing Interpretations Committee is reconsidering SIC-D27, Transactions in the Legal form of a Lease and Leaseback (to base it more on a general principle rather than a specific fact pattern) and the proposed SIC-D28, Business combinations--Measurement of Shares issued as Purchase Consideration (similar interpretations have recently been issued in several national jurisdictions).

SIC was been asked to consider recent guidance in other jurisdictions before finalising its draft consensus.

The IASC project on Business Reporting on the Internet should be handed over to the International Federation of Accountants, which has a committee working on this issue.