The Board had previously agreed the following:

• Conditional rights and obligations do not meet the definitions of assets and liabilities.
• Unconditional rights and mature rights meet the definition of an asset if they are enforceable and give access to future economic benefits.
• Unconditional obligations and mature obligations meet the definition of a liability if they are enforceable and oblige the entity to make a future sacrifice of economic benefits.
• Unless a contract is enforceable, the obligations that it imposes on the contracting parties will not meet the definition of liabilities, and the corresponding rights that it conveys to counterparties will not meet the definition of assets.
• Contracting rights and obligations that qualify for recognition as assets and liabilities should initially be measured at their fair values.

The Board discussed the application of these principles in relation to revenue recognition in long-term construction contracts. The Board appeared generally supportive of the approach but expressed some reservations which needed to be further considered.