As if it doesn’t already have enough delayed standards on its agenda, the International Accounting Standards Board wants to hear from the public about more new projects to add to its workload.
On Tuesday, the IASB launched a “public consultation” seeking input on the strategic direction and overall balance of its future work program. Admittedly, it makes some sense to ask for new projects now that the IASB has a new chairman and vice chairman, Hans Hoogervorst and Ian Mackintosh, respectively, who took over on July 1 from longtime chairman Sir David Tweedie.
The IASB noted that since it was created in 2001, IFRS has increasingly become accepted around the world, but as the number of jurisdictions applying IFRS increases, people in those countries have identified brand new accounting issues for the IASB to solve.
In its new consultation document, the IASB is asking deliberately general questions to gather views on what its future work program should be from all those involved in or affected by financial reporting. In particular, the IASB wants feedback on how it should balance the development of financial reporting with the maintenance of IFRS.
The IASB also wants respondents to consider the time and resource constraints that the hardworking board members labor under, so it also wants suggestions on the areas of financial reporting that people think should be given the highest priority for further improvement.
“Up until now, the agenda of the IASB has largely been determined by the need to support a first wave of jurisdictions adopting IFRS and the completion of our program to improve IFRS and align them with U.S. GAAP,” said Hoogervorst in a statement. “With this work largely completed, our attention can now turn to new issues that may require our attention. We seek your views to get the balance and the direction of our future work plan right.”
It’s a little bit surprising that Hoogervorst considers the work of aligning IFRS with U.S. GAAP to be largely complete. Not long ago, the IASB and FASB decided to temporarily shelve a whole bunch of standards they had been working ever so slowly to converge so they could focus on three or four major projects—financial instruments, revenue recognition, leasing and, to a lesser extent, insurance—to get them finished this year (see FASB and IASB Delay Convergence Timeline—Again). Since then they have delayed finalizing the high-priority standards and decided to re-expose for further comment at least two of those priority projects, revenue recognition and leasing, pushing the deadline out further.
Meanwhile, the SEC has not yet decided whether it will approve of incorporating IFRS into the U.S. financial reporting system. Based on a recent paper issued by SEC Chief Accountant Jim Kroeker’s staff, it appears more likely that it will follow a so-called “condorsement” approach under which it would consider and endorse IASB standards one at a time as a way of converging them with U.S. GAAP on a case by case basis rather than adopting them wholesale (see SEC Releases Work Plan for How IFRS Transition Might Work). In fact, that seems to be the approach largely followed in Europe and much of the rest of the world. A recent Reuters article noted that less than 16 percent of the world’s markets use a pure form of IFRS, and few countries adopt the international standards automatically without tailoring them to their needs. That’s likely to happen in the U.S., especially when it comes to U.S. habits like the last-in-first-out inventory method.
The IASB said the consultation period on its future work program will close on Nov. 30, 2011 (that is, unless it gets re-exposed). The "Agenda Consultation 2011—Request for Views" document is available to download from http://go.ifrs.org/agenda+consultation+2011+CLs.