The staff noted that this project is also being taken on by the US FASB and that the Board should seek additional convergence with the FASB. There was some concern that the FASB is diverging from the positions the IASB has already taken. The FASB is currently working on definitions that would distinguish between "business activity" and "financial activity" - a distinction the IASB and the G4+1 had determined to be fruitless. Additionally the FASB has not taken any decision yet regarding the format (2 columns versus 1 column). The staff was asked to continue to work closely with the FASB staff.

The purpose of this discussion was to convey the findings of the initial field visits with the Board and staff. The staff and Board members noted the following major themes and issues:

• Many users and preparers asked for a single number as "the" measure of performance (like net income).
• Preparers want more flexibility to represent their company in a way that is consistent with their business.
• Concern that the proposed approach did not work for a financial institution or a conglomerate with financial activities.
• Many users see merit in the approach proposed.
• The Board has a major educational task at hand.

The Board also discussed the following details:

(a) Net income and recycling. The Board agreed to retain the current model (13-1). There will be a future discussion of how this decision will affect IAS 32/39.

(b) Inventory impairments. The Board agreed (9-5) inventory impairments should be presented in the remeasurement column.

(c) Write-downs of accounts receivable. The Board agreed (8-6) that the item should be presented in the operating profit and the remeasurement column.

(d) Pensions.Some concerns have been raised regarding the interim report as the entities reported that it would be difficult to split the pension costs because they will not have the information. This issue will be discussed later. The Board agreed (12-2) to stay with the current model.

(e) Provisions. It was agreed that the initial recognition should be in column 1 (profit before remeasurements) and subsequent remeasurement in column 2 (remeasurements).

(f) Other business profit. The Board decided to retain the category of other business profit and to allow items in this category to be moved up to operating profit.

(g) Income from associates. The Board agreed (8-6) that income from associates should be presented in financial income. The Board agreed (14-0) that income from associates should be presented net of tax.

(h) Financial and financing distinction. The Board agreed to keep the distinction that interest on liabilities would be presented in financing expense while interest income from financial assets would be presented in operating. This would require an entity that switches from an overdraft to a positive cash position to track the interest income and expense. This may be an area of divergence with the FASB.

(i) Banking activities. Several Board members expressed concern that the current proposals do not address well issues related to financial institutions and conglomerates. No decisions were made.

The Board will address the following items at its next meeting:

• Tax
• Earnings and earnings-per-share
• Function versus nature
• Adoption date
• Convergence with the FASB
• Descriptors
• Presentation on the face of the statement
• Segment reporting and cash flow statement