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EFRAG believes IASB should not extend its remit beyond the current focus of the organisation

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

05 Oct 2015

The European Financial Reporting Advisory Group (EFRAG) has published a draft comment letter in respons to the Trustees' Request for Views (RfV) document with proposals for further enhancing the structure and effectiveness of the organisation.

In its draft comment letter on the RfV published in July 2015, EFRAG is only answering questions 1 to 6 of the RfV, as the other questions dealing with governance and financing issues have already been considered by the European Commission in its evaluation of the IAS Regulation.

On the remaining questions, EFRAG makes the following observations:

  • EFRAG believes that the IASB should not enter into the domain of public sector or not-for-profit sector standard-setting as this would require substantial additional resources, as well as knowledge, expertise and capacity not currently present within the IASB Board nor staff.
  • EFRAG believes that the IASB should be fully aware of the developments across the whole range of corporate reporting, but should only take steps where necessary to maintain the relevance of IFRS within corporate reporting debate. Nevertheless, EFRAG underlines the importance of the IASB addressing non-IFRS information, in particular alternative performance measures, as part of the disclosure initiative project.
  • As regards the IFRS taxonomy, EFRAG believes that the IFRS Foundation should continue to develop and maintain an IFRS Taxonomy to control the quality and the use of the brand. However, the IASB Board should not be involved in the process since this is for most members outside their scope of competence; rather competent senior staff should deal with this issue. The development of the appropriate computer language and software should be left entirely to somebody else.
  • EFRAG believes that post-implementation reviews should be regarded as a useful tool in IASB’s research activities; EFRAG also stresses that the IASB may also wish to consider undertaking post-implementation reviews of older standards where interpretation issues are often raised.
  • Finally, EFRAG calls on the Trustees to examine and reconsider the effectiveness of their due process oversight and extend it beyond mere compliance with the due process procedures and steps laid down in the due process handbook.

Please click to access the full draft comment letter on the EFRAG ewebsite. Comments are requested by 30 November 2015.

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