The Board discussed the types of contractual rights and obligations that could give rise to revenue. The Board determined that conditional rights (performance has not occurred) should not give rise to revenue.

The Board noted that under the staff's proposal, conditional rights could give rise to a fair value gain or loss. For example, if an entity submitted a purchase order for 1 unit at the fair value price of 100and, prior to delivery, the fair value increased to 105, the purchaser would have a gain of 5 and the seller a loss of 5. Therefore, the seller would record revenue of 100, cost of sale (say 80), and a loss of 5 from the fair value movement of its stock prior to delivery.

The board decided that pre-performance assets and liabilities would be carried at fair value at initial recognition and subsequent remeasurement. Post-performance assets and liabilities would be subject to another standard. The staff was asked to continue consideration of this model in co-operation with the FASB staff.