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IFRS Foundation issues proposal to establish an Accounting Standards Advisory Forum

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Nov 01, 2012

The IFRS Foundation has issued for public comment proposals for the creation of the Accounting Standards Advisory Forum (ASAF), which was recommended by the Trustees' strategy review to provide technical advice and feedback to the IASB from the standard-setting community.

The role of the ASAF is create a more streamlined and formal representation of national and regional issues to be incorporated into the due process of a standard-setting workflow. The IFRS Foundation would like participating national standard setters to formally commit to:

  1. supporting the IFRS Foundation in the development of a single set of high quality globally accepted accounting standards,
  2. encouraging input from jurisdictions/regions during the consultation process,
  3. supporting consistent application of IFRSs by jurisdiction and in the region,
  4. adopting the use of IFRSs as issued by the IASB,
  5. having the resources and capabilities to have an active role in the work of the ASAF.

A Memorandum of Understanding is to be signed by the members of the ASAF and the IASB to formalise these commitments.

The ASAF will be comprised of 12 members, whom will have a term of two years. Composition of the members will be based on achieving geographical balance:

  • Africa: 1 seat
  • Americas: 3 seats
  • Asia-Oceania: 3 seats
  • Europe (including non-EU): 3 seats
  • World at large: 2 seats

The ASAF will meet four times a year with the representatives of the IASB to discuss relevant issues, with one of the meetings being combined with the annual conference for WSS.

The IFRS Foundation believes some of the advantages of the creation of the ASAF are:

  • The IASB has a single contact instead of many bilateral relationships.
  • The ASAF has a larger forum than the current bilateral relations, which will provide the IASB a wider access to information from jurisdictions and further improve the quality of the final standards.
  • One of the key demands of the strategy review by the trustee is satisfied.
  • The IASB standards are supported by an even larger group of users, promoting their further adoption and uniform application.
  • The establishment of the ASAF requires no changes to the structure of the IFRS Foundation.
  • The ASAF could be a useful complement to the International Forum of the standard setter in the field of accounting (International Forum of Accounting Standard Setters, IFASS).
  • The ASAF would encourage multilateral discussions.

The risk of the creation of the ASAF are:

  • The standard-setting process could drag on.
  • It would be difficult to find a composition of the ASAF, which will satisfy all interested parties. This could mean that national standard setters, which are not represented in the ASAF develop, no sense of belonging to the body.
  • There is a risk that the group becomes too large and immobile.
  • It might need for additional staff and resources arise.
  • It might be difficult to control the discussion and to reach agreement.

Comments are due by 17 December 2012.

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