--- a/spec/latest/index.html	Thu Aug 04 14:38:57 2011 -0400
+++ b/spec/latest/index.html	Thu Aug 04 12:51:58 2011 -0700
@@ -1617,7 +1617,6 @@
     initializing the <tref>active context</tref> with the <tref>initial context</tref>. If a <tref>local context</tref> is encountered,
     information from the <tref>local context</tref> is merged into the <tref>active context</tref>.
   </p>
-  <p class="issue">Should the document URL be used as the default for <code>@base</code> in the <tref>initial context</tref>?</p>
   <p>
     The <tref>active context</tref> is used for expanding keys and values of an associative array (or elements
     of a list (see <span a="#list-processing">List Processing</span>)).
@@ -1644,6 +1643,29 @@
   </ul>
 
   <section>
+    <h3>Initial Context</h3>
+    <p>The <tref>initial context</tref> is initialized as follows:</p>
+    <ul>
+      <li>
+        <code>@base</code> is set using <cite><href="http://www.ietf.org/rfc/rfc2396.txt">section 5.1 Establishing a
+        Base URI</href="http://www.ietf.org/rfc/rfc2396.txt"></cite> of [[RFC3986]]. Processors MAY provide a means
+        of setting the base IRI programatically.
+      </li>
+      <li><code>@coerce</code> is set with a single mapping from <code>@iri</code> to <code>@type</code>.</li>
+    </ul>
+    <pre class="example" data-transform="updateExample">
+    <!--
+    {
+        "@base": ****document-location****,
+        "@context": {
+          "@iri": "@type"
+        }
+    }
+    -->
+    </pre>
+  </section>
+  
+  <section>
     <h3>Coerce</h3>
     <p>
       Map each key-value pair in the <tref>local context</tref>'s
@@ -1679,9 +1701,9 @@
         suffix and no suffix (meaning the value contains no ':' string at all) are treated equivalently.</li>
       <li>If the IRI being processed is for a property (i.e., a key value in an associative array, or a
         value in a <code>@coerce</code> mapping) and the active context has a <code>@vocab</code> mapping,
-        join the mapped value to the suffix using the method described in [[!RFC3987]].</li>
+        join the mapped value to the suffix using the method described in [[!RFC3986]].</li>
       <li>If the IRI being processed is for a subject or object (i.e., not a property) and the active context has a <code>@base</code> mapping,
-        join the mapped value to the suffix using the method described in [[!RFC3987]].</li>
+        join the mapped value to the suffix using the method described in [[!RFC3986]].</li>
       <li>Otherwise, use the value directly as an IRI.</li>
     </ol>
   </p>