Reporting Performance
At prior meetings, the Board has tentatively decided on a performance statement along the following lines:
Column 1Total (Columns 2 + 3) | Column 2Income and Expenses Other than Remeasurements | Column 3Income and Expenses Resulting from Revisions to Prior Expectations about Future Periods (Remeasurements) | |
|---|---|---|---|
Business Activities | xxx | xxx | xxx |
Financing and Investing Activities | xxx | xxx | xxx |
Income Taxes | xxx | xxx | xxx |
Discontinuing Operations | xxx | xxx | xxx |
Net Income or Comprehensive Income | xxx | xxx | xxx |
At today's meeting, the staff proposed, based on discussions with the UK Accounting Standards Board, four alternative models for incorporating a notion of operating performance:
A. Column 2 to include some remeasurements so as to result in a total of operating profit with other remeasurements in column 3.
B. Column 2 and 3 unchanged, but a total of operating profit may be inserted into the Business section of column 2. Some remeasurements may be included within this subtotal and some excluded at the entity's discretion.
C. As for B but with a stipulation as to which items could be excluded from the operating profit subtotal.
D. As for B or C but with certain items such as foreign currency gains and losses arising on translation of net investments included below both of the business and financing categories.
The Board voted for option C (13-1). They Did not however specify what items should be excluded but would consider that at a later stage. The Board also agreed that limited field-testing could commence.
Three options were considered for performance reporting by financial institutions. These were:
1. No differences from other entities.
2. The same categories as other entities but that they could be rearranged to place financing on top.
3. Different classifications from other entities in particular to distinguish operating financing from regulatory capital financing.
The Board proposed that the financing section could be split between operating and non-operating areas provided it was presented together within the financing section. It was further proposed that any entity can choose whichever of business or financing it wished to present first. It was agreed that the staff would draft these proposals for further consideration by the Board.