Date recorded:

Two papers were discussed, one by Andrew Lennard, Deputy Technical Director of the UK ASB, and Geoff Whittington, and the other by Warren McGregor.

  • The measurement project would seek a consistent approach related to selection of the appropriate measurement objective for items recognised in the financial statements. There was general agreement that the aim is to recognise assets at what they are worth, but the question 'value to whom?' remains.
  • The Board discussed fair value, replacement cost, net selling price, and value in use as bases for measurement, including how to define them and difficulties in applying them.
  • Some of the main issues to be resolved include:
    • Valuations where there is no active market or, alternatively, multiple markets.
    • Measuring fair value for assets, such as tangible plant and equipment, where separate cash flows do not exist.
    • Measuring fair value when transaction costs are significant.
    • One measurement attribute for all assets in all circumstances versus different attributes for different circumstances.
    • Aggregation - at what level should the measurement take place.
    • Measurement of specialised assets.
    • The objective of measurement - is it recovery of cost incurred or reflection of some sort of current value.
  • No decisions were reached during the meeting in respect of the above issues.
  • Future of the project:
    • This project will be all embracing as it has an effect not only on measurement of assets and liabilities but also on performance reporting (are changes in value are of a capital or income nature). Therefore the project will be a long-term one and would most likely result in a change to the Framework.
    • However, convergence remains the key priority for the Board.
    • The Board will try to improve consistency of some aspects of measurement as part of the improvements project.
    • A paper will be prepared for the Board that will take an inventory of how assets and liabilities are currently measured under the existing standards.
    • The Board will consider the measurement paper that was previously presented to the G4+1 as part of their discussion on impairment.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.