We see effects analysis as one element in the comprehensive due process supporting the development of high-quality financial reporting standards.  In the context of International Financial Reporting Standards, the due process is framed by and facilitates achieving the objective of high-quality financial reporting as defined in the IFRS Foundation Constitution and the Conceptual Framework for Financial Reporting (2010).  The elements of the due process deployed on a particular project may differ from those followed for others, although some elements will be present in all projects (in particular, the mandatory stages identified in the IFRS Foundation’s Constitution, paragraph 37).  Effects analysis exists alongside other elements of due process, such as appropriate consideration of technical alternatives, exposure documents, roundtable discussions, field tests and field visits, conversations with regulators, users and other constituents.

We agree with the principle that effects analysis should be an element of the standard-setting process throughout the life cycle of a standard-setting project, including post-implementation reviews.  We do not think that the same level of detail is necessary at each stage of a project and think that different procedures might be employed at different stages.  What is important is that, for any standard-setting project, overall there has been a systematic and thorough assessment of effects throughout the initiation, research, development and issuance phases of a project.  We see the post-implementation review as an opportunity for an independent re-assessment of the effects analysis.