The Board discussed how to proceed with the comments received on the exposure draft Discontinued Operations: Proposed Amendments to IFRS 5.

The Board discussed a staff recommendation that because the disposal of or classification to held for sale of an operating segment may or may not represent a strategic shift in the entity's operations, the Board should adopt a principles-based approach and define a discontinued operation as a component of an entity whose disposal of or classification to held for sale represents a strategic shift in the entity's operations.

Many Board members were unhappy about the proposal, not least because the staff were not proposing to define or elaborate significantly on what a 'significant shift' represented. To these Board members, this was an open invitation to 'do what you want' reporting. Others preferred to see the effects of discontinued (and discontinuing) operations reported in the segment disclosure note. However, other Board members had a problem with that approach, primarily because the segment disclosure may be based on non-IFRS measures and lacks discipline.

Ultimately, the Board referred itself to a possible approach being developed by the FASB. This approach was described as:

• (a) Eliminate the requirement to present discontinued operations (except for businesses that meet the criteria to be classified as held for sale on acquisition) on the face of the statement of comprehensive income. The effects of businesses that meet the criteria to be classified as held for sale on acquisition would continue be presented separately from continuing operations (but possibly with a label that better describes these items).
• (b) Disclosures would be required for all components of an entity that have been disposed of or classified as held for sale, for the items proposed in the exposure draft, for all periods presented.

The Board agreed that they owed it to their constituents and to the FASB to explore this possible approach. They undertook to contact their users' forum, the Corporate Reporting Users Forum, as well as representatives in industries for which the issue is significant, such as REITS and retail groups. Board members noted that the FASB approach might not change or conform the definition of discontinued operations, but enhancing the disclosure in a useful way in this area would be a significant improvement. It is likely that, if the FASB approach is developed, it would trigger re-exposure.

The Board agreed that the staff should coordinate their constituent outreach activities with those of the FASB staff.