Accounting Standards Advisory Forum (ASAF)

Date recorded:

Yael Almog, Executive Director of the IFRS Foundation, introduced an extended session on establishing an Accounting Standards Advisory Forum.  She explained the background of the proposal and the results of the consultation, including stating that the Memorandum of Understanding and Terms of Reference would be amended to clarify that membership of the Forum would be open to jurisdictions that had not adopted IFRSs, but were otherwise qualified (i.e., had the technical capacity and infrastructure to make a significant contribution to the ASAF).

Council members queried certain aspects of the proposals, in particular the composition and geographical distribution embedded in the proposal.  Others expressed concerns over the apparent haste with which the ASAF was being established.  Another area of concern was the commitments implied in the proposed Memorandum of Understanding.  Some supported the proposed commitments and others did not see them as necessary, except perhaps the commitment to mutual respect of independence of the standard-setters.

Several Council members queried whether the existing bilateral arrangements (e.g., the MoUs between the IASB and the FASB, the ASBJ and EFRAG) would continue.  The IASB Chairman gave inconsistent answers – at first saying he was tempted to keep them, but later in the same session suggesting that the existing bilateral would not continue.

The Council was invited to address the following issues:

  1. Do members agree that the Advisory Council’s mandate is reasonably clear and remains appropriate in light of the proposed formation of the ASAF? If not, what changes would they propose and why?
  2. Do members think the proposed mandate of the ASAF is reasonably clear and appropriate? If not, what changes would they propose and why?
  3. What additional steps should be taken, if any, or what changes should be made, if any, in how the Advisory Council operates, to ensure that the work of the Advisory Council and ASAF complement one another?
  4. Assuming that the role of the Council and ASAF are clear and complementary, should changes in the composition of the Advisory Council be considered? If so, what changes and why?

The Council broke into discussion groups and discussed these topics.  Afterwards, each group reported the results of their discussions.  Many themes were common to all.  The Advisory Council chairman summarised the Councils views as follows:

  • As currently articulated in the IFRS Foundation Constitution and the Council’s own Terms of Reference, the role of the AC is appropriate [although some groups expressed concern that the IASB Chair would chair the ASAF];
  • There was support of a clear, technically-focused mandate for the ASAF, one not duplicative of the Council;
  • It would be productive for Council to keep a watching brief of ASAF; and
  • Ceteris paribus, there is no reason why an ASAF Member might not also be a member of the AC.

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