Date recorded:

The Board held a brief discussion of what might constitute an 'element' of the financial statements. The staff noted that before the IAS and the FASB considered the issues of identifying and defining potential missing elements or seeking to converge the existing definitions of elements, they should be clear about what an element was.

Basic elements

The Board agreed that:

  • The elements definitions should continue to define the economic things (resources and claims) and changes in them that pertain to a particular entity. (Those things and changes in them are also called "stocks" and "flows.")
  • The elements definitions should focus on the most fundamental of the real-world economic phenomena that pertain to an entity. Distinctions that are made for purposes of financial statement display or presentation go beyond the notion of basic elements.

At least one Board member expressed some disquiet about this conclusion. The member accepted that if one adopted this approach, there would be only assets and liabilities; that was conceptually pure but not especially helpful. In particular, 'flows' needed to be defined more closely than simply 'changes in resources and claims' so as to distinguish revenue from contributions by owners and expenses from distributions to owners (i.e. 'equity' items). The staff acknowledged that this was a debate still to come; noting that the conclusion reached was on the basic elements and that there might be subsidiary elements as well.

Procedures for finalising the Framework

The Board reviewed the procedures for finalising the Framework. Specifically, the Board considered whether each of the IASB and the FASB should issue the new common conceptual framework as a single document after completion of all phases or issue each chapter as they complete their final round of redeliberations and balloting for individual chapters. The staff suggested that the issues concerning the finalization of the conceptual framework related to the standing of the framework within the hierarchy of authoritative guidance. Thus, the finalization may need to be readdressed when the Boards discuss the placement of the framework within the IASB and FASB hierarchies at the April joint meeting.

The Board agreed that this issue needed to be addressed at the April 2007 joint meeting, by which time both Boards would have begun redeliberations of the chapters on Objectives and Qualitative Characteristics.

Project status and planning

The US-based staff introduced a short document outlining the work plan for the period to May 2007. There was no discussion.

Phase B-Elements and Recognition

The Board concurred with a suggestion from the Canada-based staff that there should be consultations with selected technical experts and others such as the IASB's Standards Advisory Council (SAC) and the FASB's Financial Accounting Standards Advisory Council (FASAC) on the milestones related to work on asset definitions and options over assets, without waiting for completion of the remaining milestones.

Correction list for hyphenation

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