Financial Reporting Committee Sir David Tweedie Chairman ...

Sir David Tweedie
Chairman
International Accounting Standards Board
30 Cannon Street
London
EC3M 6XH
Dear Sir David
Round-table Meetings
Financial Reporting Committee
22 May 2006
We understand that the Board intends to hold round-table meetings later in 2006 to discuss
its proposed amendments to IAS37 “Provisions, Contingent Liabilities and Contingent
Assets”.
At a recent meeting of The Hundred Group’s Financial Reporting Committee an opportunity
was given for members to report on the Round-table meetings that were held in London in
November 2005 to consider the Board’s proposals on the future accounting for business
combinations. Five of the Committee’s members attended the meetings either as
participants or observers. We are writing to offer our feedback with the intention of assisting
you in planning for future Round-table meetings.
Conduct of the meetings
In summary, our members were disappointed with the conduct of the meetings. It was felt
that the meetings were stage-managed and that proper consideration was not given to the
fundamental principles underlying the Board’s proposals. Regrettably, there was the
perception that Board members were intent on avoiding the fundamentals by quickly
focussing the debate on the detailed matters raised in the comment letters that had been
submitted by participants. It also has to be said that the rather aggressive way in which the
meetings were conducted was not appreciated.
Overall, our members unfortunately came away with the impression that they were dealing
with closed minds.
We believe that if the Round-table format is to operate effectively in the future it is important
that participants feel that their voices are properly heard and that the issues that they raise
are given full and proper consideration. Only then will more people be encouraged to join the
debate. Otherwise, there is the danger that even those who currently take the time to
participate will be turned off.
Page 1 of 2

Some of our members attended Round-table meetings held recently by the United Kingdom
Accounting Standards Board to discuss the Discussion Paper “Measurement on Initial
Recognition” that was prepared by the Canadian Accounting Standards Board. It was felt
that the format of those meetings – presentations by selected interested parties followed by
an open-forum question and answer session – was more effective in facilitating a proper
discussion of the issues.
Timing of the meetings
We accept that by the time an exposure draft has been issued entrenched positions are likely
to have been established and, frankly, it would be difficult for the Board to change radically
its proposals.
We therefore believe strongly that exposure drafts on significant issues should be preceded
by a discussion paper. At this stage, there would be the opportunity for the Board to respond
to comments without feeling that it has to make an embarrassing u-turn. Consistent with this
view, we believe that Round-table meetings would be and would be seen to be much more
effective if they were held at the discussion paper stage.
Roadmap for the future
We acknowledge that the Round-table meetings on business combinations were somewhat
experimental. Although we have our criticisms of those meetings, we believe that the
Round-table meeting has an important role to play in the development of accounting
standards. We are therefore pleased that the Board has decided to hold similar meetings on
its proposals on provisions and contingencies.
Following those further Round-table meetings we would encourage the Board to make it
clear whether it intends to continue with the Round-table format and, if so, at what stage they
will they will be incorporated into the due process surrounding the development of accounting
standards.
Please feel free to contact me if you wish to discuss our comments.
Yours sincerely
Ken Lever
Chairman
The Hundred Group - Financial Reporting Committee
Page 2 of 2