It may be helpful to start with a brief explanation of objectives-oriented standards, as was laid out in the 2003 Staff Report*:

[T]he optimal principles-based accounting standard involves a concise statement of substantive accounting principle where the accounting objective has been incorporated as an integral part of the standard and where few, if any, exceptions or internal inconsistencies are included in the standard. Further, such a standard should provide an appropriate amount of implementation guidance given the nature of the class of transactions or events and should be devoid of bright-line tests. Finally, such a standard should be consistent with, and derive from, a coherent conceptual framework of financial reporting.

*Study Pursuant to Section 108(d) of the Sarbanes-Oxley Act of 2002 on the Adoption by the United States Financial Reporting System of a Principles-Based Accounting System, released July 25, 2003.

Endorsement process starts as soon as COM receives a new IFRS standard or IFRIC interpretation from the IASB. COM then asks EFRAG for its endorsement opinion and notifies members of the Standards Advice Review Group that the endorsement advice has been requested indicating the approximate time of its delivery. Upon delivery of EFRAG's final opinion on endorsement, Standards Advice Review Group has three weeks to give its advice to the Commission. In exceptional circumstances this may be extended to four weeks.

The role of the Group is to assess whether EFRAG's opinion on endorsement is well-balanced and objective.

After COM receives EFRAG's opinion and advice of SARG, it will draft the endorsing Regulation, with standard or interpretation in its Annex. Together with all required documents it will be sent for consultation with other Commission services – so-called Inter-service consultation.

COM will also send this Regulation to members of the Accounting Regulatory Committee and schedule a meeting of the Accounting Regulatory Committee to vote on proposal for endorsement. Accounting Regulatory Committee (ARC) is composed of representatives from Member States and is chaired by the Commission.

The role of ARC is to ensure the formal representation of Member States interests in the endorsement process under so-called Comitology procedure. Accounting Regulatory Committee approves implementing measures by qualified majority.

Draft implementing measures should be also sent to the European Parliament two months before the meeting. After the meeting, the EP has another one month to consider whether the Commission has exceeded its implementing powers.

These comitology rules will be modified in the future. IAS Regulation will be amended to include a new 'regulatory procedure with scrutiny'. Under this new procedure the Commission will, after obtaining Accounting Regulatory Committee's favourable opinion, submit the draft measure for scrutiny by the EP and the Council. The new procedure will extend the time for EP and Council to react to 3 months, unless a fast track procedure will be adopted.

The need to progress toward internationally recognised financial reporting standards has been a central issue in the global financial services markets for some time. IOSCO has done much in this field and has consistently focused on convergence, implementation and also application, through the building of an IOSCO Database which is administered by the IOSCO General Secretariat that will facilitate the sharing by securities regulators of decisions relating to the enforcement of IFRSs. In January 2007, the IOSCO IFRS Database became fully operational and the indications are that the database will provide a useful reference source for regulators that will further aid coordination and convergence.

3-4 May 2007, London

Thursday 3 May

• Customer Loyalty Programmes (IFRIC D20) - Revised draft Interpretation
• IAS 18 – Real Estate Sales
• IAS 19 Employee Benefits – Timetable for outstanding items
• IAS 19 – The Asset Ceiling and Minimum Funding Requirements (IFRIC D19)
• IAS 21 – Hedging a Net Investment in a Foreign Operation
• IAS 18 – Guidance on Identifying Agency Arrangements
• IAS 27 – Demergers and other in-specie distributions

• IAS 18 – Customer Contributions to Property, Plant and Equipment of a Supplier
• Review of Tentative Agenda Decisions Published in March IFRIC Update
  • IFRS 3 – Re-assessments on a business combination
  • IAS 1 and IAS 39 – Current or non-current presentation of derivatives classified as 'held for trading' under IAS 39
  • IAS 16 and IAS 18 Revenue – Sale of assets held for rental
  • IAS 19 Employee Benefits – Curtailments and negative past service costs
• Staff Recommendations for Tentative Agenda Decisions
  • IAS 39 – Gaming transactions
  • IAS 39 – Hedging future cash flows with purchased options
  • IAS 39 – Hedging multiple risks with a single derivative hedging instrument
  • IAS 39 – Scope of IAS 39 paragraph 11A
  • IAS 39 – The meaning of 'commonly used currencies' in AG 33(d)
  • IFRS 5 – Plan to Sell the Controlling Interest in a Subsidiary
  • IFRS 5 – Disclosures
  • IAS 12 – Deferred tax arising from unremitted overseas earnings [this item added 18 April 2007]

• Australia
• Hong Kong SAR
• Indonesia
• Japan
• Malaysia

• New Zealand
• Philippines
• Taiwan
• Thailand