Amendments related to insurance contracts

The Board agreed to amend IFRS 4 Insurance Contracts to be consistent with the new IFRS, with modifications to reflect the Board's temporary special treatment in phase I of the insurance project for insurance contracts.

The Board agreed to permit a choice of sensitivity analysis disclosures for insurance risk only. However, the staff was asked to consider this issue further and will come back to the March Board meeting.

Proxy disclosure

The Board agreed that the IFRS should require disclosure of the amount of change in the fair value attributable to changes in the instrument's creditworthiness. The requirement will provide that entities may use a surrogate or proxy suggested by the Board or a better number, if an entity can develop one. There would be examples provided to explain the Board's intention.

'Day 1' profit recognition

The Board agreed to amend ED 7 paragraph 23 to require disclosure of the accounting policy for determining when any difference between the transaction price and any valuation based not solely on observable market data ('mark-to-model') is recognised in profit or loss.

The Board agreed to require, for financial instruments within the scope of IAS 39, (a) the difference between transaction prices at initial recognition and valuations made at the time of the transactions that were not based solely on data from observable markets; and (b) a reconciliation of changes to the amount disclosed in (a) from the previous period. There would be an example of the application of this requirement.

Other issues

The Board agreed a number of minor changes (not detailed in the Observer materials) without significant debate.

Timetable for completion of the IFRS

The staff estimated that the IFRS would be available late in Q2 or early in Q3 2005.