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IASB's Due Process Handbook Review

Description

The IFRS Foundation Due Process Handbook (Handbook) sets out the due process procedures that apply to the International  Accounting Standards Board (the IASB) and the IFRS Interpretations Committee (the IFRS IC). The Trustees of the IFRS Foundation committee - the Due Process Oversight Committee (DPOC) - is responsible for monitoring the IASB and the IFRS IC compliance with these due process procedures. The DPOC also reviews and, if necessary, amends the due process procedures in the light of changing due process conventions and comments from stakeholders.

On 29 April 2019 the IFRS Foundation issued an Exposure Draft Proposed amendments to the IFRS Foundation Due Process Handbook (the ED) with a comment period ending on 29 July 2019. The ED's main proposed amendments to the Handbook :

  • clarify the scope and role of the effect analysis throughout the standard-setting process;

  • clarify the status of agenda decisions published by the IFRS IC and the nature of explanatory material contained therein;

  • provide the IASB with the ability to publish its own agenda decisions;

  • reflect that entities should be entitled to sufficient time to consider an agenda decision and if necessary, implement an accounting policy change;

  • refine the categorisation and review of educational material produced by the IFRS Foundation;

  • refine the consultation required before adding major projects to the IASB’s work plan;

  • clarify the DPOC’s oversight of the IFRS Taxonomy due process; and

  • highlight the role of the IFRS Advisory Council as a strategic advisory body.

In its draft comment letter EFRAG acknowledges that most of the proposals in the ED provide necessary clarifications to the existing processes, reflect recent developments in working practices and improve internal consistency and understandability of the Due Process Handbook.
However, EFRAG suggests that for major projects, detailed effect analysis reports should be issued at each stage when key due process documents are issued.
EFRAG is also concerned about the ambiguity of the status and objectives of IFRS IC agenda decisions. EFRAG considers that the IASB should ensure in its due process that agenda decisions only contain explanatory material and references to the mandatory content of IFRS Standards and that diversity in practice and IFRS-like guidance is addressed through standard-setting such as through the annual improvements process. EFRAG also raises concerns about the proposed Board agenda decisions.

EFRAG has issued its draft comment letter on 14 June 2019 with a comment period ending on 12 July 2019. The draft comment letter can be found here.​


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