The staff updated the Board on the progress of the pilot field tests conducted in the UK. The Board was not asked to make any decisions during this meeting. The Board plans to discuss this project at its June 2003 meeting.

Participants did not raise any major objections during the pilot tests, and there seemed to be a general understanding of the purpose of this standard. The preparers noted that the performance reporting standard would require a specific format for the income statement, which may not present the results in a manner consistent with an entity's business model. On the other hand, the users recognise the benefits of a single format for making comparisons between companies and across industries.

The staff presented the Board with details of some of the issues raised during the field tests:

Definition and Presentation of 'Financial' and 'Financing'

Participants expressed concerns whether financing activities should be separated, problems with the definition of financing, and practical difficulties.

Presentation of Write-downs of Accounts Receivable

Intuitively, preparers and users believe that this charge should be in a different column and different row from what the Board intends to mandate.

Presentation of Inventory Impairments

The Board did not discuss this issue.

Allocations of Tax

Many participants want to allocate the tax expense between columns (remeasurements vs. non-remeasurements).

Definition of 'Earnings'

Many participants would like to add this item, as it is a key for communication to the market.

Proposed Voluntary Early Adoption in 2005

Some participants raised concerns that if the standard is issued before 31 December 2005, an option to early adopt would hurt comparability. Conversely, some constituents wanted to change once for the adoption to IFRS and therefore wanted to adopt by 2005.

Issues Regarding Banking Activities

Financial institutions expressed some concerns on the split between operating and financing activities. They believe it is not really relevant for their businesses, as much of the expenses would be in operating, but all of the income in financing. Financial institutions also noted that the requirement to present gross interest income and interest expense is not meaningful as the institutions manage net interest. That is, the gross numbers are volatile with offsetting positions.

Financial institutions also believe it may be more appropriate to show gains and losses from trading activities in the first column, as it is a margin generating activity and not a true remeasurement.

The Board will deliberate and make decisions on many of these and other issues at its June 2003 meeting.