At a previous Board meeting, the Board requested the staff to perform additional research and analysis on the way forward on the FICE project, after considering the comments of external reviewers.

The staff provided possible ways to proceed in the project ranging from continuing with the pre-ballot draft to abandoning the project. The Board agreed to proceed with a targeted amendment of IAS 32 Financial Instruments: Presentation. The discussion focused on convergence with the FASB and the potential for a common project in this area. The Board will discuss that way forward with the FASB at a next joint meeting.

The Board suggested moving forward in phases. In the first phase, both Board would analyse the most significant differences between IFRS and US GAAP and amend the standards so as to provide the same accounting outcome (even though with a different set of Standards, with the US GAAP having extensive guidance on specific instruments). The main differences relate to convertible debt, puttable instruments and fixed-for-fixed derivatives as well as mandatorily convertible preference shares. Subsequently, the Boards would discuss the need for specific guidance on specific instruments and try to converge further on the scope of the guidance.

Some Board members expressed their concerns with the proposed approach as they feared that it might lead to implicit adoption of detailed guidance currently in US GAAP by analogy. One Board member felt that the Board should drop the project as it is unlikely that a converged standard will be achieved in the short to medium term. He noted that the US would try to retain the specific guidance whereas the IASB seems to be satisfied with IAS 32 and the high level guidance included there. The Board agreed to discuss these issues at a joint meeting with the FASB in October.