The chairman of IFRIC gave an update of IFRIC activities.

• Two Interpretations on IFRS 2 would soon be with Board members for their review and approval.
• Comments received on IFRIC D11 were consistent in that respondents believed the cancellation provisions only applied where an entity cancelled a scheme. Read literally, this would not include a situation where the employee cancelled participation in a scheme. Board members roundly dismissed that notion, indicating that employees could cancel a scheme. The point was made that such a narrow reading of the cancellation provisions in IFRS 2 was inconsistent with the notion of principle based standards.
• Regarding the footnote contained in the April 2005 edition (page 7) of IFRIC Update, the IFRIC Chairman clarified that the issue to be discussed at the next meeting is the wording and not the decision itself.
• Regarding IFRIC 3, the Board was asked to consider amendments to IAS 38. The Board disagreed and some Board members stated that it would be irresponsible to take any action without clear reasons as to why IFRIC 3 is an incorrect Interpretation of IFRS.
• A Board member raised a concern over what was perceived to be IFRIC's position on the issue of business combinations achieved by contract alone. The IASB had clearly stated in the past, that entities would not be precluded from considering IFRS 3 as guidance in accounting for such transactions (considering the hierarchy in IAS 8). It was understood that IFRIC's position was that this was not allowed. The IFRIC Chairman indicated that he would seek clarity on IFRIC's position.

The IASB chairman thanked the outgoing IFRIC chairman, Kevin Stevenson, for his contributions and service over the years.

Wednesday 20 April 2005

Meeting of the IASB and the Liaison National Standard Setters Location: The Council Room, One Great George Street, Westminster, London SW1P 3AA