Date recorded:

The staff presented its proposals on linked presentation for inclusion in the upcoming ED. The session was structured as follows:


  • Description of linked presentation and appropriateness
  • Scope of linked presentation
  • Display of linked transactions
  • Measurement in case of presenting items linked in the statement of financial position

Description of linked presentation and appropriateness

The staff explained the merits of linked presentation as it would 'ameliorate' the grossing up of the linked items in the statement of financial presentation. The Board was split about the issue and had a lengthy discussion about pros and cons of linked presentation. Many Board members objected to linked presentation in the statement of financial position, but would accept note disclosure of linked items with appropriate narratives. The Board agreed to go forward with linked presentation.

Scope of linked presentation

Staff continued to address the transactions that would be scoped into a linked presentation. The staff proposed to allow only a subset of transactions under flowchart 2. It further proposed to include only transactions where the transferor's exposure is explicitly limited to a fixed and prefunded monetary amount. Board members were concerned over the implications of the proposal and where this could end up. It was decided to discuss the display (that is, face or footnotes) first, to enable the Board to decide on the scope.

Display of linked transactions

The staff identified two alternatives for displaying linked transactions: either present the liability deducted from the asset on the face of the financial statement or in the notes.

It was recommended to use a notes approach for implementing the linked presentation principle. While Board members seemed to agree that note disclosure was appropriate, they were split over the scope issue. After some debate, the Board decided that for flowchart 1 a broader scope was to be adopted while for flowchart 2 in general only non-recourse transactions would qualify for linked presentation.

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