IASB June 2007

The Board considered 12 issues for inclusion in the annual improvements process. This process is intended to eliminate inconsistencies between standards and to clarify wording. Proposed amendments to standards resulting from the process will be published in a single exposure draft each year. The first exposure draft will be published in October 2007.

Advertising and promotional activities

The Board reconsidered its tentative decision at its meeting in May that IAS 38 Intangible Assets should be amended to clarify that the cost of goods and services used in advertising and promotional materials should be recognised as an expense by an entity when those goods or services are available to that entity.

One Board member disagreed with this proposal on the ground that the purpose of paragraphs 68-70 of IAS 38 was to consider the accounting for assets that arise as a result of advertising having taken place rather than items purchased in anticipation of undertaking advertising. Additionally, many items of advertising, for example mail order catalogues, were tangible rather than intangible assets.

The Board considered these views, but reconfirmed its view that IAS 38 should be amended as agreed in May.