Research programme

Date recorded:

Research programme – project priorities

The agenda paper for this session set out how the IASB should prioritise the projects in the research programme. The staff recommended that the IASB should prioritise its research projects as set out in the paper, using demand, impact and timeliness as the main determining factors, with resource considerations as a constraint; and publish a priority list on the IASB website. The Senior Director, Technical Activities introduced the paper and asked the Board members whether they had any comments on the paper and whether they agreed with the staff recommendation in the paper.

A Board member kicked off the discussion and noted that this was a good discussion to have, as it made the Board think about how to make the agenda consultation process as successful as possible for both the IASB and for the public. She cautioned about the risk of creating ‘consultation fatigue’ amongst stakeholders. She noted that the agenda paper read as though the Board would be looking to issue five Discussion Papers in the next 12 months, adding that the prospects of the Board receiving good comments on five Discussion Papers was low. She suggested that issuing three major Discussion Papers in the next 12 months would be more realistic and identified Disclosure Initiative, Business Combinations under Common Control, and Rate Regulation as potential candidates. She further noted that she disagreed with the comment in the paper that the speed at which the Board could advance something affected the prioritisation assessment, noting that this should not be a factor in prioritisation if an item was a top priority issue.

Another Board member noted that the Board needed to differentiate between priority and timing of projects. He noted that priority related to factors such as how many staff were allocated, when they were allocated, and how important a project was to get going quickly, whereas timing depended on both the above factors and the complexity of the project. He noted that some projects would be high priority but would take a long time, and vice versa, and that just using the terms short-, medium- and long-term was not helpful. The key question was prioritisation of staff.

The Chairman questioned whether an agenda consultation was really necessary, given the Board already had enough on its plate. A Board member responded noting that the agenda consultation was not purely about feedback on projects on the agenda, but also about receiving feedback on priorities. The Chairman noted that the composition of the current agenda had resulted from the previous agenda consultation, and that people’s views had probably not changed significantly. He noted that the Board could move forward with another agenda consultation but questioned whether another round would lead to significantly different opinions from people. He added that it should be a very modest agenda consultation, to avoid overburdening people.

Another Board member raised concerns with respect to the use of short-, medium- and long-term categorisations and the fact that people could misinterpret ‘short-term’ as something that was going to be completed soon. He noted that prioritisation was a better route to take. Following on from a point made by another Board member, he agreed that the Board should restrict the number of Discussion Papers published in the upcoming year, noting that standards such as IFRS 9 and IFRS 15 had recently been published and that the same people the Board would be asking to provide comments on the Discussion Papers would also be dealing with implementation of the recently issued standards.

The Vice-Chairman noted that he generally agreed with the comments made by other Board members. He noted that the Board needed to hear what people had to say and work out how to manage the process. He reiterated the importance of managing expectations. He noted that in the agenda paper there were seven items identified as shorter-term projects, and that people could read this and expect items to be completed in a year or so. Accordingly, he noted that the Board needed to ensure that whatever information was included on the IASB website was clear as to what the Board’s intentions were.

A Board member noted that the reality was that the agenda was already full, but that the agenda consultation could be used by the Board to get an idea about whether people agreed with the items the Board had prioritised. She further noted that the more information that could be provided with respect to the scope and potential solutions on each item, the more information people had to assist the Board with that. She noted that she did not necessarily agree with the list of three short-term priority items identified by another Board member earlier in the discussion. She noted that some projects (for example, rate regulation) were more aspirational, whereas others (for example, the equity method) required a broader rethink in order to get the Board’s thinking clear so standards could be maintained properly, which was very important for people using standards. She highlighted the fact that there were application questions related to the equity method that the IFRS Interpretations Committee could not answer because the current literature was so difficult to apply.

Another Board member questioned whether all items would lead to a Discussion Paper or whether alternative types of papers, for example, staff research papers, were being contemplated.

The Senior Director Technical Activities noted that the staff were looking at a number of options. He noted that he believed it would be helpful for some items, for example, extractive activities, to have relatively short staff papers that were published on the IASB website, but that the Board did not invite formal feedback on. He noted that if any parties wanted to provide informal feedback, that option would exist and that ASAF could also be asked for their feedback. He also noted that for emission trading schemes the staff would look to document the schemes and obtain assistance from national standard setters, but might not look for much feedback.

In trying to bring the discussion to a close, the Chairman highlighted a point made earlier in the conversation that timeliness in itself should not be a factor in deciding whether an item was a priority or not. He added that even if this factor was taken out of the equation, the list in the agenda paper would change very little. He reemphasised the point that it was important to communicate that short-term did not mean short-term results and wondered how the Board would move forward with publishing this information.

The Senior Director Technical Activities noted that the biggest issue was how the information was published on the IASB website and how it addressed the expectation issue. He noted that if only a list was included, it could look like a lot of standards, and that many items on the list may not even become Discussion Papers. He suggested adding a best estimate of the likely next steps and processes as a means of trying to manage expectations and provide more useful information.

The Chairman brought the discussion to a close. He suggested that the Board compiled a project scheme, with clear outputs. He noted that this would form the basis for the next agenda consultation. In the agenda consultation the Board could ask people for their feedback on what was already there, what they would like to see added, and what they would like to see done differently. He emphasised that the most important thing at present was for the Board to have a very clear project scheme and that what was in the agenda paper was a good start, but needed more detail. He noted that it could be put on the IASB website and would serve to discipline the Board and to create very clear expectations for the outside world.

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