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IASB concludes agenda consultation by releasing a feedback statement

  • IASB document (blue) Image

02 Nov 2016

On 11 August 2015, the International Accounting Standards Board (IASB) launched its second public consultation to seek broad public input on the strategic direction and overall balance of its future work programme.

 

Background

In the Request for Views published in August 2015 the Board asked broad questions on the balance of its activities, its research programme, its standard-setting projects, its maintenance activities and implementation support, the level and pace of change, and the frequency of its agenda consultations. The Board received 119 comment letters. Main respondent groups were preparers and industry organisations (31%), standard-setters (23%), and auditors and accounting bodies (22%). 49% of responses were from Europe and 23% from Asia and Oceania.

 

General messages

As the IASB's agenda already was very full as a result of the 2011 agenda consultation, the 2015 agenda consultation process was not as detailed as the previous process was. Nevertheless, the IASB identified four clear messages to inform its work programme 2017-2021:

  • Completion of the remaining standard-setting projects. As in the agenda consultation 2011, stakeholders strongly called for the completion of the remaining major projects. At the launch of the agenda consultation these were leases, insurance contracts, and the Conceptual Framework. Leases has by now been concluded, the IASB notes that it will make the other two projects top priorities. Respondents have also stressed that it is important that IFRSs continue to be principle-based.
  • Better communication in financial reporting. "Better communication" is the theme IASB Chairman Hans Hoogervorst has chosen for his second term. Under this theme he summarises such projects as the disclosure initiative and the primary financial statements project that receive wide support. In this context, respondents noted that the Board should prioritise projects that are important to users of financial statements.
  • Continued development of implementation support. Under this heading the IASB discusses improved support for stakeholders when they are implementing new IFRSs but also the fact that stakeholders have requested that the Board should focus on fewer standard-setting projects to allow stakeholders to focus on implementing recently issued standards. Respondents also noted that the Board should not develop too many narrow-scope amendments and suggested that many of the minor amendments the Board has issued in the past could easily have been included in omnibus annual improvements or (if regarding the same standard) in a broader review of that standard. Generally, post-implementation reviews are considered helpful.
  • A more focused research programme. Given the limitations of the 2015 agenda consultation, the research programme was the main focus. Although respondents expressed general support for an evidence-based approach to setting standards, many were confused about the strategy, objectives, and processes of the research programme or the relationship between research and the Board’s other technical activities. They also noted that the Board seemed to have too many research projects on its agenda. The Board has already taken first steps to focus his research programme (see below) and the feedback statement offers a detailed description of the objective, the processes, and the criteria applied in the research programme.

 

The reorganised research programme

Given the responses on the research programme - that research itself was supported but the structure and processes were unclear and that there were too many research projects on the agenda - the Board decided to refocus it research programme. It has abandoned the former categories of long-term and short-term research projects and it does no longer distinguish between the assessment phase of a project and the development phase.

In April and May 2016, the IASB discussed all research projects on the agenda and assessed each of it against the feedback received in the agenda consultation. As a result, the Board decided to:

  • retain eight projects on the research programme, including two that were nearing completion, and develop them actively as a priority;
  • transfer the remaining four projects to a newly created research pipeline; and
  • do no further work on four topics.

The Board also added to its research pipeline a further four topics, newly identified in the 2015 consultation. Projects in the pipeline will not become active immediately, however, when sufficient capacity becomes available, these projects will be taken up. It is expected that work on these projects can be started before the next agenda consultation.

The current situation is:

Active research projects Research pipeline Projects for which no further work is planned

Disclosure initiative — Principles of disclosure

Primary financial statements

Business combinations under common control

Dynamic risk management

Financial instruments with characteristics of equity

Goodwill and impairment

Discount rates

Share-based payment

Equity method

Extractive activities

Pollutant pricing mechanisms

Provisions

Variable and contingent consideration

High Inflation: Scope of IAS 29

Pension benefits that depend on asset returns

SMEs that are subsidiaries

Foreign currency translation

High inflation

Income taxes

Post-employment benefits (including pensions)

 

Other topics

As part of the agenda consultation, the IASB also asked respondents whether a three-yearly agenda consultation process was appropriate in view of the fact that the time frame for developing and issuing standards is a long one. The IASB proposed that a five year interval between agenda consultations is more appropriate than the three year interval currently required. Respondents supported this approach, and the Due Process Handbook was already amended accordingly in June 2016.

The IASB also received a lot of comments that took a broader perspective on corporate reporting questions or commented on processes. This other feedback is summarised in a table at the end of the feedback statement together with the IASB responses.

 

Additional information

Please click for the following documents on the IASB website:

Correction list for hyphenation

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