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In FEE's view, a period of calm should be a guiding principle for the Board when shaping the strategic direction of its future standard setting activity. However, during the period of calm, the Board would in FEE's view still be active, initially with completing the four unfinished major convergence standards and subsequently with implementation issues and in responding to the needs for simplification and strengthening the consistency of the existing IFRS standards.
The focus of the Board for 2012 would be on completion of the unfinished major projects. FEE strongly supports the Board’s intention to finish the projects on Revenue Recognition, Leases, Insurance Contracts and Financial Instruments with a high priority. It is in the interest of all constituents to bring them to a close in a timely manner given their significant impacts in the near future. The Board should also actively respond to emerging early implementation issues arising from the complexities of these new standards.
After the completion of the current Memorandum of Understanding projects, the strategy of convergence with US GAAP should no longer be a dominant consideration in determining the IASB’s agenda priorities.
In FEE's view, for its future agenda, the Board should concentrate on reducing complexity as well as on addressing major inconsistencies in existing standards.
Highest priority should be given to a limited number of projects that set the scene for the development of future standards. For example, a period of relative calm will give the Board an opportunity to complete its work on the Conceptual Framework. Addressing the Framework is needed to deal with various cross-cutting issues of a conceptual nature which underlie a number of the problems that have been identified in current IFRS (e.g. consistency in discount rates; the role of probability in liability recognition etc.) FEE recommends that the work should be done in a focused and targeted way, without any further delay.
FEE believes that the IASB should add a project on Business Combinations between Entities under Common Control, as this is an area of significant diversity in practice due to lack of authoritative guidance in the standards.
Among some of the longer-term strategic considerations, FEE recommends that the IASB continue to engage with the International Integrated Reporting Committee (IIRC) with respect to the development of integrated reporting. At present, these developments are still at an early stage, but given their potential scope they may have an important impact on financial reporting for the future.