Regarding the definitions of income and revenues, the staff recommended that:

• it is important to define income before defining revenues;
• definitions of income and revenues should be based on Approach A (defining the items that compose income) and not Approach B (defining the inflows of economic benefits - recognised increases in assets and decreases in liabilities - that are excluded in arriving at income);
• the definition of income under Approach A should be developed from the following initial draft:

  "Income is: (a) recognised increases in assets or decreases in liabilities arising from a transaction or event in respect of which there are also related recognised decreases in assets or increases in liabilities that result from the provision of goods or services to customers; and (b) increases in equity resulting from other recognised changes in assets or liabilities, except those resulting from investments by owners."

The Board discussed whether the distinction in part (a) of this definition should be based on customers vs non-customers as currently drafted or based on activities of the business. This would determine which transactions are reported gross and which are reported net.

The Board agreed with the first two staff recommendations and asked the staff to develop further the definition of income.