IASB offers insights on forthcoming agenda consultation

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09 Mar 2021

The International Forum of Accounting Standard Setters (IFASS) is currently holding its spring meeting as a virtual conference. During one presentation today, the IASB offered insights on the forthcoming request for information on the IASB's third agenda consultation and asked participants on outreach proposals and ideas.

The request for information is expected to be published at the end of March 2021, with Board deliberations to take place during the second half of 2021 and a final work plan to be published in the first half of 2022. This will allow the incoming Board Chair to be involved in determination of the Board's priorities for 2022-2026.

As one of the first points of the presentation, the IASB commented on the connection and distinction between the IFRS Foundation's current initiative on sustainability reporting and the IASB's agenda consultation. Sustainability reporting is a hot topic at the moment and respondents might not be clear about what would be addressed where. The IASB is currently working on its management commentary project and could do more on sustainability aspects, should stakeholders wish so, as long as this is connected to financial statements. The IFRS Foundation is intending to set up a sustainability standards Board that would deal with sustainability reporting as such. While there is some connecting middle ground, respondents should not confuse the two initiatives. As the IFRS Foundation Trustees move forward quickly with their initiative, their decisions would be available before the Board makes decisions on its future agenda.

The presenter then explained that the request for information will consist of three parts: (1) strategic direction and balance of the Board's activities, (2) criteria for assessing which projects to add to the work plan, and (3) priority of financial reporting issues. The IASB asks that respondents consider parts one and two first instead jumping immediately to part three.

Part one of the request for information regarding the strategic direction and balance notes that the IASB's work is currently following six lines:

  • New IFRS Standards and major amendments to IFRS Standards
  • Maintenance and consistent application of IFRS Standards
  • Digital financial reporting
  • The IFRS for SMEs Standard
  • Stakeholder engagement
  • Understandability and accessibility

In this part of the request for views the IASB is seeking stakeholders’ views on whether the Board should increase, leave unchanged or decrease its current level of focus on each line of work. And while there is a little room for additional work, respondents are asked to assume that the Board’s overall level of resources will remain substantially unchanged during the 2022 to 2026 period.

Part two of the request for information regarding criteria for assessing which projects to add to the work plan notes that the Board will use a specified list of seven criteria to assess the potential financial reporting issues that could be added to its work plan to develop new IFRS Standards and major amendments to IFRS Standards. The criteria are derived from the Due Process Handbook and the 2015 Agenda Consultation. The relative importance of any specific criterion will vary depending on the particular circumstances. Generally, the Board will evaluate potential project for its work plan primarily on the basis of whether the project will meet investors’ needs, while also taking into account the costs of producing the information.

Finally, part three of the request for information regarding the priority of financial reporting issues describes 22 projects. The Board will seek stakeholders’ views on what priority they would give each of the potential projects described in the RFI — high, medium or low — and whether their prioritisation refers to all or only some aspects included in the project description.

Stakeholders will have the opportunity to provide feedback on the request for information through comment letters, an online survey, outreach meetings, and consultative group meetings. Standard setters participating in the IFASS meeting were especially asked to share thoughts on possible additional outreach activities. Comments included:

  • There are currently many consultations. Stakeholders might be thoughtful of their resources and how they allocate them.
  • Priorities have changed during the COVID-19 pandemic and the pandemic might have changed the way stakeholders look at issues.
  • The IASB might consider setting aside some additional resources to be able to react to changed stakeholder reactions to the request for information.
  • The current virtual environment might offer additional opportunities of participating in outreach activities, including in other standard setters' outreach events.
  • Outreach events of the IASB should, where possible, be held in the local language.
  • The IASB should collaborate with local IFASS members in selecting participants for outreach events.

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