The second day of the Joint Board meeting started with an open meeting between both Boards and the Corporate Reporting Users' Forum (CRUF). The delegation of CRUF introduced the session as a discussion forum of users of financial statement founded in 2005 with the objective of influencing the future development of both US GAAP and IFRSs. CRUF is made up of users from the buy and sell side, equities and credit side, located around the world. The representatives noted that all views presented in this session are their personal views and not those of their respective companies.

The representatives said their overriding objective is to understand and forecast business activity. They noted that the view users would prefer is that of a rational external investor, not management. They requested an appropriate post-tax earnings figure and considered comprehensive income not relevant for their needs. Furthermore, the representatives made clear that they are in favour of a stewardship concept (making reference to the Framework Project on Objectives), as the information from financial statements is often used as an intervention trigger.

The CRUF delegation presented four major areas of concern:

• Firstly, cash flow information was considered extremely important, as cash flow is the ultimate driver of value. However, they highlighted that international standards on cash flow reporting are in dire need of change as they are open to abuse by prepares and sometimes show items that are not cash flows at all. They also noted that the question of the indirect versus direct method for presenting operating cash flows is not an issue. Also, it was noted that the current cash flow standard lacks the possibility to reconcile net debt to the cash flow statement.
• Secondly, as an example for 'good' standard setting, the delegation highlighted expensing share-based payments, especially stock option schemes, despite a considerable amount of resistance from certain constituents.
• Thirdly, as an example for 'not so good' standard setting they presented IFRS 3 as revised in 2008. Although the demise of goodwill amortisation was welcomed, the tendency to strip out more intangibles during the purchase price allocation brings back amortisation by the back door. It was noted that the selection of items to be capitalised and choosing the amortisation period are highly subjective. In the eyes of CRUF it does not provide useful information, although it was admitted that it cannot be generalised that intangible asset accounting does not provide any useful information at all. The revision of IFRS 3 was presented as adding complexity and cost for preparers without adding useful information for users.
• Finally, the CRUF representatives said that revenue recognition is not a major concern for most investors, and any revision to the current standard should stay close to the customer consideration model.

The delegation then moved on to discuss the subject of the future of standard setting. It was noted that standards should result in less uncertainty and reduce information risk. Also, accounting and disclosure should provide clear information on transactions and associated risks. Also, appropriate disclosure of accounting policies, choices, assumptions, and estimates are necessary. The representatives favoured more disclosures about ranges of estimates along with sensitivities.

One IASB member questioned the irrelevance of comprehensive income given that material items are presented there, such as the reserve for available-for-sale financial instruments and the reserve for actuarial gains and losses. One of CRUF's representatives made clear that pensions are very important for a range of reasons, especially as they replace cash salary and represent a long-term risk for entities. Another IASB member noted that significant items are missing on CRUF's list of issues like pensions, leasing, and consolidation. It was made clear that the list was not meant to be exhaustive. On consolidation, the representatives explained that disclosures would help understanding the underlying risk.

An IASB member asked why many items of other comprehensive income (OCI) would be reclassified to net income for analysis purposes. The CRUF delegation made clear that components of OCI are used, but not the comprehensive income figure. A FASB member cited empirical evidence implying that comprehensive income is more relevant and that the financial statement presentation project addresses many of the issues raised. In response, one of the CRUF members explained that comprehensive income is too complex to apply multipliers to it and is too complex to have predictive powers.

The FASB Chairman highlighted that the financial statement presentation project aims to disaggregate income and expense with different degrees of risk.

Another IASB member said that many others have represented that comprehensive income is important to them and that many of the issues raised in the CRUF presentation result from misapplication of the relevant IFRSs. He asked the CRUF members how they define 'net debt'. The CRUF representatives were reluctant to go into the details of their definition and explained the real issue is the inability to reconcile net debt to the cash flow statement.

It was also noted by one IASB member that it is even less relevant to 'bury' intangibles in goodwill. She also noted that while CRUF seemed to urge both Boards to give higher priority to issues that are causing real life problems, CRUF also prioritises the conceptual framework project, which address no specific issues. Responding to the latter one CRUF representative said that the basis for developing principle-based standards (that is, the Framework) must be clear, as rules add complexity.

Another IASB member asked why CRUF did not consider segment reporting to be important and if they are satisfied with the current standard (IFRS 8). The CRUF delegation said that this is an issue, but not an urgent one.

An IASB member asked whether the request for more disclosures will lead to information overload. The CRUF delegates' response was that only certain additional key disclosures were required, not extensive additional items.

The next question by a FASB member was on the topic of financial instruments accounting and the use of fair value. The CRUF members agreed that they prefer fair value and are concerned about the fact that many entities seem to be unsure about the reliability of their valuation models. Additionally, it was admitted that fair value might be pro-cyclic, but that this would not be the real issue.

The IASB Chairman thanked the CRUF members and closed the session.