We generally agree with the proposed drafting of the "Day 1 gain or loss" disclosures to be included in IFRS 7 Financial Instruments: Disclosures. However, we believe an entity should be required to determine categories of instruments for which the "Day 1 gains or losses" issue is relevant (for example, derivative commodity contracts and structured financial products). A requirement to describe these categories should be inserted into IFRS 7.

This brings us to one of the greatest benefits of IFRS – that it should ultimately lower the cost of capital. First, because the internal costs of compliance – all the accounting systems necessary to maintain the same basic information according to different accounting standards – will be reduced. More of the company's productive capacity can be spent on being productive, rather than on compliance. Second, because investors, analysts, and regulators will have to know only one or two accounting languages, they should be able to price securities more efficiently. As they become familiar with the language of IFRS, and as more companies report using IFRS, users, especially analysts, will be able to compare companies from different countries directly, without making rough and ready adjustments.