Improvements Project

Date recorded:

The following improvements were discussed and tentative decisions reached:

IAS 1 Presentation of Financial Statements

Items not covered by a specific Standard or Interpretation

IAS 1.22 provides guidance on how to account for items that are not covered by existing IAS or Interpretations of IAS by the SIC.

The Board agreed that when a specific Standard or Interpretation is not available on this subject, management should use its judgement considering requirements and guidance in IAS and Interpretations of IAS dealing with similar and related issues. This amendment is made because reference to the Interpretations of Standards by the SIC is not included in the current Standard.

Presentation issues around the classification between current / non-current liabilities

IAS 1.63 states that an enterprise should continue to classify its long term interest-bearing liabilities as non-current, even when they are due to be settled within twelve months of the balance sheet date, if the loan is to be refinanced on a long-term basis.

The Board tentatively agreed, for reasons of convergence with other standard-setters, that refinancing after the balance sheet date shall not be taken into account in the classification of liabilities as current/non-current, because it does not provide evidence of a condition that existed at balance sheet date.

IAS 1.65 deals with borrowing agreements that incorporate covenants which have the effect that the liability becomes payable on demand if certain conditions related to the borrower's financial position are breached. In these circumstances, the liability is classified as non-current only when specific conditions are met.

The Board agreed that if, at the balance sheet date, the lender holds an absolute right to demand repayment immediately, it is inappropriate to classify the liability as non-current.

IAS 8 Net Profit or Loss for the Period, Fundamental Errors and Changes in Accounting Policies

The decision made at the June 2001 IASB meeting to drop the distinction between fundamental errors and other material errors will be incorporated in the proposed revised Standard.

The Board agreed to delete the allowed alternative treatment for the treatment of changes in accounting policies and fundamental errors (recognition of the amount in the income statement). Therefore, material errors and retrospective changes in accounting policy will be accounted for by adjusting the opening balance of retained earnings.

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.