IASB July 2008

The staff presented a staff draft of an exposure draft to replace IAS 27 Consolidated and Separate Financial Statements and SIC-12 Consolidation – Special Purpose Entities.

The objective of the session was to give the Board an opportunity to see how the tentative decisions it had made on the project might be represented in the form of an exposure draft. In this way the Board could assess the consistency of the tentative decisions and those areas that require additional analysis.

The Board did not reach any decisions about the working draft itself, but asked the staff to provide it with additional analysis of the definition of significant involvement, the disclosure requirements, reputational risk and  agency relationships. In addition, the Board asked the staff to consider the implications of the working draft for IAS 28 Investments in Associates and whether the concept of significant involvement, as envisaged in the staff draft, should subsume significant influence.

The Board also discussed the overall structure and direction of the staff draft. The staff draft is not an exposure draft, which the Board publishes only after completion of its due process as described in the IASB’s due process handbook. However, the staff draft will, after it has been amended to reflect the Board discussion, be available on the IASB’s Consolidation Project Web page and form the basis of discussions at public round-tables the Board will hold in September.

The Board expects to publish an exposure draft towards the end of this year.