Discussion of Improvements Project

Date recorded:


The proposal is to remove the option of using LIFO as a cost formula for measuring inventory. National standard setters advised to go ahead and expose.

IAS 17

The tentative proposal is to remove the option of expensing lessors' initial direct costs for finance leases. More thought needs to be given to lease accounting in general, but it was felt that this was a self contained area that would not get in the way of the separate project and would be consistent with the Board's goal of eliminating choice. The proposal is in line with IAS 39, which requires capitalisation of initial acquisition costs. A decision was made to go ahead and expose.

IAS 23

The proposal is to eliminate the option to capitalise certain borrowing costs and instead to require that they all be expensed as incurred. It was felt that this area needed more consideration, as the proposed treatment would not be in line with many countries' current treatment. Additionally, where countries do capitalise borrowing costs, they are not always capitalising the same costs.


IAS 1 permits a true and fair override in extremely rare circumstances. Not all countries currently permit this, and are wary about doing so. Countries that do permit this pointed out that only a very few times is this used. The Board needs to debate this further, and is planning to do so later in the week.

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