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Notes from IASC Foundation trustees meeting

  • IASC Foundation (blue) Image

22 Mar 2005

The Trustees of the IASC Foundation met in London on 18 March 2005. Presented below are the preliminary and unofficial notes taken by Deloitte observers at the meeting.

Although the IASB and IFRIC have adopted a policy of making their agenda papers available to observers at their meetings, the IASC Foundation has not yet adopted such a policy, making the discussion sometimes a bit difficult to follow, with possible adverse effects on the notes below.

IASC Foundation Trustees' Meeting18 March 2005, London

General

At the June meeting, IASB Member James Leisenring will do a presentation about the benefits of a conceptual framework, why it is necessary, and why the current one needs to be updated for developments in accounting theory over the past 20 years.

Review of IASB due process

The IASCF Trustees' Procedures Committee commended the IASB's proposed 'procedures handbook' to the Trustees. This handbook will be exposed for public comment, hopefully by the beginning of April 2005. The Board intends to comply with the procedures set out in the handbook in the meantime.

Standards Advisory Council (SAC)

  • The SAC will be reduced to something between 35 and 40 members
  • Membership will be refocused to allow SAC to concentrate on strategic, rather then technical issues (most likely fewer technicians and more analysts and preparers).
  • Chairman (not a member of the IASB, Trustee, or staff) will be appointed by the Trustees.
  • Chairman will be a half-time salaried position.
  • The Trustees' Nominating Committee hopes to have the chair (and possibly also a vice-chair) and new SAC composition ready for consideration at the Trustees June meeting
  • Many of the changes proposed originated from the SAC's own review of operations.

International Financial Reporting Interpretations Committee (IFRIC)

  • Several Trustees expressed concerns about the interpretation process. Some of these concerns were alleviated when the Board's involvement in approval was described.
  • The results of the IFRIC review of operations, including the enhancements to its process will be documented and exposed for public comment. As IFRIC is a standing committee of the IASB, it is likely that the final operating procedures document will be included in the IASB's procedures handbook.

Constitution review

General

  • A new sub-paragraph will be added regarding the necessity to take into consideration the needs of SMEs in developing standards.
  • The proposal to increase the number of Trustees from 19 to 22 was accepted.
  • After considerable discussion, the proposed geographic distribution of Trustees into six North America, six Europe, six Asia/Oceania, and four others was accepted. However, this decision is subject to confirmation in June to allow for comment from the European Commission.
  • The Trustees are likely to form a 'contact group' of interested organisations that would be involved in the process of nominating new Trustees and considering renewals. The committee would be consultative and would make recommendations to the Trustees, who would make the decisions.
  • The Foundation chairman could serve for up to six years from date of appointment, even if that extends the chairman's term beyond six years total.

Oversight

After considerable discussion, the Trustees approved proposed Constitution paragraph that the Trustees will consider but not determine the IASB's technical agenda. Some Trustees commented that protecting the Board's independence was its most important role, but that the Trustees' involvement went a long way to providing 'independence with accountability'.

Funding

The Trustees agreed to revert to something similar to the existing wording ('assume responsibility') in Constitution.

Composition of the Board

  • The size of the IASB will remain at 14.
  • The current provision for two part-time seats will remain.
  • There should be no explicit geographical balance.
  • The proposed easing of the professional background criteria was approved.

IASB voting

The proposed change was agreed: 9 votes out of 14 will be required (instead of the current simple majority) to approve an exposure draft, final IFRS, or IFRIC Interpretation.

IFRIC

  • No Constitutional changes were proposed, but the Trustees will expose the IFRIC's suggestions arising from its own review of operations and may propose changes later on.

SAC

  • The chair should be independent of the IASB and the staff.
  • The chair should be a half-time salaried position.
  • The Trustees will likely grant formal approval to the proposed SAC Charter at its meeting in June. This will be an 'operational' document, not part of the Constitution.

This summary is based on notes taken by observers at the IASCF Trustees meeting and should not be regarded as an official or final summary.

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