Comment letter on DTC 1 Oct 05 final

KPMG IFRG Limited Tel +44 (0) 20 7694 8089 1-2 Dorset Rise Fax +44 (0) 20 7694 8429 London EC4Y 8EN mark.vaessen@kpmgifrg.com United Kingdom Ms Patrina Buchanan Project Manager International Accounting Standards Board 30 Cannon Street Our ref MV/288 London EC4M 6XH United Kingdom Contact Mark Vaessen +44 (20) 7694 8089 31 October 2005 Dear Patrina Draft Technical Corrections to IAS 21 The Effects of Changes in Foreign Exchange Rates - Net Investment in a Foreign Operation We appreciate the opportunity to comment on Draft Technical Correction 1 (“DTC 1”) Proposed amendments to IAS 21 The Effects Of Changes In Foreign Exchange Rates - Net Investment in a Foreign Operation. This letter expresses the views of the international network of KPMG member firms. We support the changes proposed in DTC 1 to IAS 21. However, from a process standpoint we are concerned that the Board is using its Proposed Policy on Technical Corrections (“the proposed policy”) to change a standard when the proposed policy is in ‘draft’ and has neither been reconsidered in light of the views provided by constituents nor ratified by the Board. We set out our views in more detail in the remainder of this letter. Net investment in a foreign operation We support the clarification in DTC 1 that a reporting entity or any of its subsidiaries which have a monetary item that is receivable or payable to a foreign operation, for ...