The Financial Reporting Standards Council (FRSC) has issued an Invitation to Comment on IFRIC’s draft Interpretation D23, Distributions of Non-cash Assets to Owners.

The IFRIC was asked to provide guidance on how an entity should measure distributions of assets other than cash when it pays dividends to its owners acting in their capacity as owners. At present, International Financial Reporting Standards do not address the measurement of distributions to owners.

The proposed Interpretation addresses the following two issues:

1. How should an entity measure an obligation to distribute non-cash assets to its owners (a dividend payable)?
2. When an entity settles the dividend payable, how should it account for any difference between the carrying amount of the assets distributed and the carrying amount of the dividend payable?

IFRIC D23 would apply to all types of distributions of non-cash assets with one exception. It would not apply to a distribution of an asset to another entity within the same consolidated group.

IFRIC D23 proposes that all types of distributions of non-cash assets would be measured at the fair value of the assets distributed. The IFRIC proposes that the guidance should be applied only to future distributions because it recognizes the difficulty entities would face in recognizing past distributions at their fair values.

The FRSC Invitation to Comment and IFRIC D23 may be downloaded from the Philippine Financial Reporting Standards (PFRS) website, within the PICPA website (www.picpa.com.ph). IFRIC D23 may also be downloaded from the IASB website (www.iasb.org).

The FRSC invites comments on the IASB ED by April 11, 2008 to enable the Council to consider and include comments from Philippine respondents in its response to the IASB.