IASCF Trustees complete Constitution Review Part 2

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15 Feb, 2010

The Trustees of the IASC Foundation, the oversight body of the IASB, have completed part two of the 2008-2010 Constitution Review – announcing a number of changes aimed at enhancing public accountability, stakeholder engagement, and operational effectiveness.

The changes include:

  • Introduction of three-yearly public consultations on the IASB's technical agenda: In addition to consulting the Trustees and its advisory council annually on the existing and future agenda, the IASB will undertake a three-yearly public consultation on its future technical agenda.
  • Emphasis on adoption of IFRSs: The Constitution will emphasise that convergence is a strategy aimed at promoting and facilitating the adoption of IFRSs, but is not an objective by itself.
  • A commitment to a 'principle-based' approach: The Constitution will call for IFRSs 'based upon clearly articulated principles'.
  • Specific designation of investors: The new Constitution specifically identifies investors as a target audience for financial information (in addition to other participants in the world's capital markets and other users of financial information).
  • A requirement for due process and the introduction of an emergency procedure: The Constitution will include a provision for an accelerated due process only in the most exceptional circumstances and only after approval by at least 75 per cent of the Trustees.
  • Creation of vice chairs for both the Trustees and the IASB: The new Constitution will establish the possibility of two vice chairs for both the Trustees and the IASB. This will both ease the burden on the chair, and give the option of wider geographical distribution in the leadership.
  • Improved language to account for a broad range of stakeholders, both by type and location: The Constitution will note the need to 'take account of, as appropriate, the needs of a range of sizes and types of entities in diverse economic settings'.
  • Reduction in duration of possible second term of IASB members to ensure practical experience: While the Constitution will still permit the possibility of a second term for IASB members, the Trustees have reduced the second term from five years to three for IASB members not serving as the chair or a vice chair.
  • Names in use across the organisation to be streamlined: The names in use across the organisation will be more closely aligned with the standards. The IASC Foundation will become the IFRS Foundation, as soon as the practical arrangements can be made. The interpretations committee and advisory council will be known as the IFRS Interpretations Committee and IFRS Advisory Council, respectively. Stakeholders supported retaining the name of the IASB, and the Trustees concurred.

The changes take effect 1 March 2010. Click for IASCF Press Release (PDF 109k).

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