Preliminary summary of decisions at SIC meeting

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15 Nov 2001

At its meeting in London 12-13 November, SIC reached the following decisions: D27 (Lease/Leaseback): Agreed to delete paragraph 9 dealing with the classification of fees and resubmit to IASB D28 (Business Combination Measurement): Agreed to resubmit to IASB and keep "date of change of control" rather than "exchange date".

Staff will discuss individually with board members to try to convince them that IASB should reconsider its tentative decision at its October meeting to measure consideration at "exchange date".
  • D29 (Service Concessions): Agreed to some minor editorial changes.
  • D30 (Presentation Currency): Agreed to the consensus basically as drafted. There was considerable debate about using end-of-period rates vs. average rates. There was no debate about restatement in the situation of hyperinflation.
  • D31 (Barter Transactions): Agreed to the consensus basically as drafted. Agreed to keep "occurs frequently" but confirmed deletion of "expected to continue to occur".
  • D32 (Website Costs): Agreed to consensus but reverted back to the original draft instead of applying it based on an incremental, marginal approach.
  • D33 (Potential Voting Rights, or PVR): Agreed to consensus as drafted. Agreed to clarify that PVR is one of many considerations in assessing whether control exists. Agreed that unless the PVR is considered in substance a financing transaction (for instance, A sells 20% of its investment in B to C and enters into a forward to buy it back at a fixed price, in which case the amount under the forward is part of A's ownership in consolidation, not minority interest), the forward or option while it is outstanding is a derivative under IAS 39.
  • D34 (Puttable Instruments): Confirmed the consensus but agreed to delay for one year the effective date for certain enterprises
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