Moggiee,nearly right V1 as defined with FAA part25-107 stipulates that the failure(VEF) has to be 'recognized' and 'reacted to'BY V!.....
the 2 seconds part is in the 25-109?"TAke off Distance"...In that a 2 seconds worth of distance ,at V1 speed,is included in the T/Off distance...FAA/JAR 25-109(a)(2)
JAR reads the sameway(JAR 25-107(a)(1)
