Due Process Oversight Committee
David Sidwell, Chairman of the DPOC, gave an impressive report of the DPOC's activities. The intensity of the Committee's activities is evident, the level and quality of documentation has been enhanced significantly and the timing of the Committee's involvement is more appropriate.
The meeting was presented with the results of the Committee's assessment of due process surrounding IFRSs 10-12, IFRS 13, IASs 19R, 27R and 28R and amendments to IAS 1. These assessments noted all mandatory and non-mandatory steps that the IASB and the staff had undertaken and the results from them. Mr Sidwell noted that the documentation helped the Committee to ensure itself that it had reviewed the due process related to each IFRS in a disciplined, logical and consistent manner. The Committee had met the IASB on 16 March to discuss the matters on which the Committee was reporting and had satisfied itself in all areas. The Committee had concluded that the due process standards had been met and that the IFRSs noted above could be issued.
Mr Sidwell then went on to discuss the 'enhanced' due process assessment that was being put in place with effect from the 'big four' MoU/ G20 standards. The Committee was involved pro-actively throughout the re-deliberation process, corresponding regularly with Sir David Tweedie and Alan Teixeira, noting especially the activities being undertaken in areas in which the IASB needs to resolve differences (both with the FASB and its own constituents). Given the sensitivity of the final MoU/G20 projects, the Committee has asked for monthly meeting and updates on those projects.
Mr Sidwell noted that the Committee's revised approach to due process governance was based on a 'through the life cycle' approach. The Committee would be involved throughout the process and would review and report at regular intervals on each project. The Committee would report at least quarterly. The Committee would need to develop protocols and procedures, while acknowledging that the oversight of due process must continue to evolve.
The Committee is also engaged with the IASB as it prepared its Agenda Consultation document. Both the current Board leadership and the Committee had agreed that the incoming IASB leadership should have a say on the shape of the consultation. The Consultation will be issued after it is discussed with the Advisory Council in June and the Trustees in July 2011.
On the Committee's involvement with XBRL, the most important observations were that the IFRS Taxonomy needs to be less focused on 'IFRSs as issued' (as now) and more on developing a taxonomy that had more extensions and could be accepted world-wide without jurisdictional amendment/adaptation. This means that XBRL will need to be 'integrated into the standard-setting process' and that the development of tags/extensions will be integrated with (but distinguished from) the standard-setting activities. The Committee wanted to avoid multiple versions of the same taxonomy. At the same time, it would not help the global uptake of IFRSs if the IFRS Taxonomy was not accepted.
In a Q&A session that followed, Mr Sidwell noted that the IFRSF approach to post-implementation reviews was different to that being adopted by the US Financial Accounting Foundation. The FAF undertakes post-implementation reviews in the US. The IFRSF, on the other hand, sees such reviews as a technical activity best done by the IASB and subject to proper oversight by the Committee. Post-implementation reviews are designed to identify technical problems, best addressed by the IASB. This had been discussed with the Advisory Council, which agreed with the Committee's assessment. Trustees also agreed, noting that the reviews were 'a different work stream' in the standard-setting activities of the IASB.