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The Discussion Paper provided a framework for making classification requirements, identifying the choices that need to be taken and suggesting an order in which they could be taken. It also identified the consequences of taking certain choices, including how they might conflict with the identified objectives of classification.
Respondents to the Discussion Paper generally supported the identified framework and choices to be taken, but in a number of cases disagreed with how the identified objectives were described and derived and/or the relative priority assigned to them.
As well as answering regarding the identified framework, most respondents went further and explicitly called for a binary classification model, with a positive definition of a liability and a negative definition of equity. As was identified in the Discussion Paper, this is the approach taken in current IFRS. In making this call, the respondents suggested that the definition of a liability should be adjusted (but without suggesting how) in order to address current problems in financial reporting but that the overall approach should remain the same.
The Discussion Paper identified a number of ways in which the objectives could conflict with each other, and in particular within a binary classification model that did not appear to be consistent with meeting all of the identified objectives. It stated that a three-element classification model could potentially assist in meeting more of the objectives, and identified some potential third elements.
In calling for a binary classification model respondents did not support further exploration of whether any of these third elements could assist with financial reporting.
A number of minor comments were made with respect to the glossary, and most respondents welcomed it as a worthwhile addition to the topic.