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Minutes | Board Audit Committee (AC) Meeting

Published on 03 February 2017

AC Attendees: Steve Crocker, Asha Hemrajani, Erika Mann (Chair), and Mike Silber

AC Member Apologies: Bruno Lanvin

ICANN Executives and Staff Attendees: Susanna Bennett (Chief Operating Officer), Michelle Bright (Board Operations Content Manager), Xavier Calvez (Chief Financial Officer), John Jeffrey (General Counsel and Secretary), Vinciane Koenigsfeld (Board Operations Content Manager), Becky Nash (VP, Finance), Wendy Profit (Board Operations Specialist), Cherrie Teves (Controller), and Amy Stathos (Deputy General Counsel)

Invited Guests: Representatives from independent audit firm BDO, and Gary Rolfes – independent financial advisor to the Audit Committee

The following is a summary of discussions, actions taken and actions identified:

  1. Auditor’s Report on FY16 Audit – As an introduction, it was explained to the Audit Committee (AC) that this meeting is for the auditors to provide a final report on the FY16 Audit. It was further noted that the independent financial advisor to the AC was also in attendance. The BDO partner reported that the FY16 Audit is substantially completed and will be finalized following the AC’s review and approval. The expectation is that BDO will issue an unmodified opinion on the consolidated financial statements and release its report by the end of October 2016. BDO noted that ICANN’s FY16 accounting practices, policies, and estimates are consistent with the prior year. In conducting the FY16 Audit, BDO reviewed, among other things, ICANN’s revenue recognition, deferred revenue, general and administrative expenses, accounts receivable and allowances, investments, property and equipment, and cash and cash equivalents. The AC asked whether and how ICANN’s international offices are reflected in the FY16 Audit. BDO responded that information from the international offices is provided on a monthly basis, and is consolidated into and reflected in ICANN’s overall operations. BDO also noted that the Singapore office is required to perform a separate statutory requirement audit. The AC further asked how auction proceeds are recorded, and it was explained that, from an accounting standpoint, the triggering event to record auction proceeds is the date when the proceeds were collected. Any subsequent modification to certain auction proceeds will be noted at the date of such occurrence. The AC was then presented with an overview of the audited financial statements, which comprise the statements of financial position as of June 30, 2016 and 2015 and the related statements of activities and cash flows for the years then ended, and the related notes to the financial statements.

Domain Name System
Internationalized Domain Name ,IDN,"IDNs are domain names that include characters used in the local representation of languages that are not written with the twenty-six letters of the basic Latin alphabet ""a-z"". An IDN can contain Latin letters with diacritical marks, as required by many European languages, or may consist of characters from non-Latin scripts such as Arabic or Chinese. Many languages also use other types of digits than the European ""0-9"". The basic Latin alphabet together with the European-Arabic digits are, for the purpose of domain names, termed ""ASCII characters"" (ASCII = American Standard Code for Information Interchange). These are also included in the broader range of ""Unicode characters"" that provides the basis for IDNs. The ""hostname rule"" requires that all domain names of the type under consideration here are stored in the DNS using only the ASCII characters listed above, with the one further addition of the hyphen ""-"". The Unicode form of an IDN therefore requires special encoding before it is entered into the DNS. The following terminology is used when distinguishing between these forms: A domain name consists of a series of ""labels"" (separated by ""dots""). The ASCII form of an IDN label is termed an ""A-label"". All operations defined in the DNS protocol use A-labels exclusively. The Unicode form, which a user expects to be displayed, is termed a ""U-label"". The difference may be illustrated with the Hindi word for ""test"" — परीका — appearing here as a U-label would (in the Devanagari script). A special form of ""ASCII compatible encoding"" (abbreviated ACE) is applied to this to produce the corresponding A-label: xn--11b5bs1di. A domain name that only includes ASCII letters, digits, and hyphens is termed an ""LDH label"". Although the definitions of A-labels and LDH-labels overlap, a name consisting exclusively of LDH labels, such as"""" is not an IDN."