The future of IFRSs in Europe

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2 a number of other bodies are involved in this process in a supporting capacity. The IFRS Advisory Council advises the IASB and the IFRS Foundation on fundamental questions to do with the work programme, standardsetting and project planning. In 2003, the Accounting Standards Advisory Forum (ASAF) was additionally set up to create an institutional basis for cooperation with national standard-setters and regional bodies. Moreover, there are expert groups on key technical issues and Transition Resource Groups to support the practical implementation of new standards. On top of this, the IFRS Interpretations Committee provides guidance and advice on the application of IFRSs and on contentious reporting issues. The following diagram provides an overview of the interaction between the different bodies. The IFRS Foundation governance and control structures, including the affiliated advisory bodies, are regularly reviewed by the trustees and modified where necessary. Even though the IASB and IFRSs are repeatedly criticised on some specific points, the IFRS Foundation generally enjoys broad worldwide support for its work. The progress made by the IASB in global acceptance of IFRSs with a view to creating a single global accounting language is unmistakable. Three-pillar structure 1 2 3 Independent standard-setting and related activities Governance and oversight Public accountability IFRS Foundation IFRS Foundation Trustees IFRS Foundation Monitoring Board International Accounting Standards Board IFRS Interpretations Committee IFRS Advisory Council ASAF* *Accounting Standards Advisory Forum Sources: IFRS Foundation, IASB. 10 The future of IFRSs in Europe
ankenverband 2.4 International standard-setting process In accordance with the IFRS Foundation’s Constitution, IFRSs are developed on the basis of clearly articulated principles (principles-based approach). Standard-setting follows a strictly defined process, the “due process”, which calls for the involvement of all accounting stakeholders at an early stage. The standard-setting process provides for, among other things, impact analyses and the formation of expert groups on special agenda projects. The general public is explicitly called upon to comment on the discussion papers and exposure drafts issued by the IASB. Besides consultation in writing, there is an opportunity for an exchange of views with IASB representatives Strict compliance with the due process is at public hearings on individual agenda projects. a key precondition for ensuring transparent standard-setting and thus long-term Following evaluation of acceptance and recognition of IFRSs. the feedback received, the finalised standards are issued and published by the IASB; their application Ex perience shows that early involvement in the standard-setting process is vital to allow the incorporation of economically sensible positions into proposed IFRSs. is mandatory after a transitional period. The following diagram shows the various steps in the due process: Standard-setting process Research Agenda decisions Forward-looking needs tests Proposals Discussion paper (optional) Proposals Public consultation Stakeholders Input into standardsetting process Published IFRSs Exposure draft Public consultation Feedback statement Formal endorsement process Two-year IASB post-implementation review Source: IASB. The future of IFRSs in Europe 11
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