The IASB and the FASB discussed the overall disclosure principles, disclosures for consolidated subsidiaries, disclosures for unconsolidated structured entities and the disclosures related to investment companies.
In March 2010, the boards tentatively decided that a reporting entity should disclose information that helps users of financial statements to understand the nature of, and changes in, the risks associated with the reporting entity's involvement with other entities and how those risks affect future cash flows. At the meeting on 4 May, the boards clarified that for disclosure purposes a reporting entity has an involvement with a structured entity when the reporting entity is exposed to variability of returns from its involvement with the structured entity.
The boards discussed whether a reporting entity should disclose (a) income from its involvement with structured entities that it has set up or sponsored and (b) the fair value of assets recognised by those structured entities at the time that the structured entities are established. The IASB tentatively decided that, subject to further drafting changes, these disclosures should be included in the disclosure standard. The FASB tentatively decided not to specifically require such disclosures, but that the disclosure related to the income from the entity's involvement with structured entities that it has set up or sponsored should be covered by the overall disclosure principles.
The boards discussed but did not reach any decisions on the overall disclosure principles or the disclosures for subsidiaries. The boards will continue their discussion at their next meeting.
The boards also discussed the disclosure requirements for investment companies. The boards tentatively decided that an investment company should disclose:
- whether it has provided any financial or other support to any of its controlled investees that it was not previously contractually required to provide; and
- the nature and extent of any significant restrictions on the ability of its controlled investees to transfer funds to the investment company.
The boards also tentatively agreed that an investment company should not be required to present summarised financial information for controlled investments. The IASB will discuss at a future meeting whether an investment company should provide additional disclosures about the investees, similar to the current disclosure and presentation requirements in US GAAP for investment companies.