Dissent of Anthony T Cope and Harry K Schmid

DO1 Messrs Cope and Schmid dissent from the issue of IFRS 5.

Dissent of Anthony T Cope

DO2 Mr Cope dissents because, in his view, the IFRS fails to meet fully the needs of users in this important area.

DO3 In deciding to undertake this project, the Board had two objectives—to improve users' ability to assess the amount, timing and uncertainty of future cash flows, and to converge with US GAAP. The ability to identify assets (or asset groups) whose value will be recovered principally through sale rather than through operations has significant implications for future cash flows. Similarly, separate presentation of discontinued operations enables users to distinguish those parts of a business that will not contribute to future cash flows.

DO4 The importance of identifying and disaggregating these components was emphasised in the 1994 report of the Special Committee on Financial Reporting of the American Institute of Certified Public Accountants (the AICPA Jenkins Committee). The Jenkins Committee report, arguably the most extensive and authoritative survey of user needs ever undertaken, recommended that:

[The definition of discontinued operations] should be broadened to include all significant discontinued operations whose assets and results of operations and activities can be distinguished physically and operationally and for business reporting purposes.

The sections of SFAS 144 dealing with discontinued operations were the direct response of the FASB to this recommendation.