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The IFRS Foundation published its Request for Views (RfV) Trustees’ Review of Structure and Effectiveness: Issues for the Review in July 2015 with a comment deadline of 30 November 2015. The RfV addresses three main area: relevance of IFRS; consistent application of IFRS; and governance and financing of the IFRS Foundation. EFRAG’s letter is addressing the issues in relation to the primary strategic goals 1 to 3: development of a single set of standards; global adoption of standards and consistency of application and implementation (Questions 1 to 6 in the RfV). EFRAG did not deal with governance and financing issues which are covered by Questions 7 to 14 as the core of these issues have already been considered by the European Commission in its evaluation of the IAS Regulation and has decided on some recommendations after extensive public consultation. The European Commission is expected to send its recommendations and other comments to the IFRS Foundation responding to the Request for Views.
EFRAG’s main observations in it draft letter are:
EFRAG believes that the IFRS Foundation/IASB should not enter into the domain of public sector or not-for-profit sector standard setting;
EFRAG is of the view that the IASB should be fully aware of the developments across the whole range of corporate reporting and can take steps, if and when appropriate, to maintain the relevance of IFRS within corporate reporting debate.
EFRAG welcomes the IASB’s shift to focus more on the taxonomy itself, leaving the development of the appropriate computer language/software to somebody else.
EFRAG believes that Post-implementation Reviews should now be regarded as a useful tool in IASB’s Research activities, helping identify what works and what is in need for improvement in current practice, regardless of the date at which a standard has been issued.
EFRAG calls on the Trustees to examine and reconsider the effectiveness of its due process oversight. A due process oversight addressing the substance of the complaints will be a major step forward in building the buy-in of the various jurisdictions around the world. EFRAG recommends that the IFRS Foundation commissions an independent review of the effectiveness of its standard-setting process, including the due process oversight process but also the evaluation of the project work on the main standards.