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Third EC report on IASB and IASCF governance

  • European Union (old) Image

25 Apr 2008

In July 2006, the Economic and Financial Affairs Council (ECOFIN*) of the European Union asked the European Commission to monitor the governance of the IASB and IASCF and to report to ECOFIN on a regular basis.

The European Commission has released its Third Report on Governance Developments in the IASB and the IASCF (PDF 51k, March 2008). The report covers developments between July 2007 and January 2008. The report comments favourably on progress that has been made in improving the governance structure, funding arrangements, due process, and representation of stakeholders in the structure. Here is an excerpt:

During the period since the publication of the Commission services's 2nd report, the IASCF and IASB have made important announcements that, if fully and effectively implemented, will enhance the accountability of the IASCF/IASB to their stakeholders and enhance the transparency of their activities.

Most significantly, there is now broad-based agreement to establish a formal public oversight structure for the IASCF. This will also lead to a reform of the appointment process for Trustees, thus abolishing the self-appointment mechanism by granting an external, independent oversight body the power to decide upon the appointment of Trustees.

The Commission services welcome the decisions taken by the IASCF to strengthen the IASB's due process, in particular by carrying out ex ante impact assessments and ex post reviews of new standards and interpretations, as well as by publishing feedback statements. The Commission services are encouraged by the project summary and feedback statement published for the Business Combinations – Phase II project and encourage the Trustees and the Board to pursue their work in this area, in particular by ensuring that impact assessments are carried out earlier in the development of standards and interpretations.

Here are links to the two earlier governance reports:

* ECOFIN comprises the Economics and Finance Ministers of the EU Member States, as well as Budget Ministers when budgetary issues are discussed. It meets once a month. It develops EU policies for capital markets and economic matters, among other things.

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