Date recorded:

Disclosures - investment companies (IASB only)

The IASB debated whether to require investment companies to make a disclosure similar to that which is currently required by US GAAP: a financial highlights schedule. This schedule presents per share investment income or loss, realised and unrealised gains and losses per share, distributions to shareholders, purchase premiums, redemption fees, payments by affiliates, expense and net investment income ratios, total return, and capital commitments.

The staff admitted that the US GAAP requirements are incorporated in US GAAP by way of AICPA guidance, which in turn interprets the 1940 Investment Companies Act. A Board member noted that he was not enthusiastic about the proposal, but would support it in the spirit of convergence.

Other Board members spoke in favour of the proposal, noting that North American analysts see the financial highlights schedule as 'more important' than earnings per share information provided in the financial statements.

After a brief debate, the Board agreed that an investment company should disclose a financial highlights schedule. The schedule would present per share investment income or loss; realised and unrealised gains and losses per share; distributions to shareholders; purchase premiums; redemption fees; payments by affiliates; expense and net investment income rations; total return; and capital commitments.

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