IFRS Foundation: standards setting process

Transcription

1 International Financial Reporting Standards IFRS Foundation: standards setting process Chisinau, Moldova March 2014 Gilbert Gélard, Consultant, former IAS Board Member The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation.

2 International Accounting Standards Board 2 The International Accounting Standards Board (IASB) is the standard-setting body of the IFRS Foundation, an independent, not-for-profit organisation that: Takes account of the financial reporting needs of emerging economies and small and mediumsized entities (SMEs) Promotes the use and rigorous application of IFRSs Aims to bring about convergence of national accounting standards and IFRSs to high quality solutions

3 IFRS Foundation Operation mode 3 An independent standardsetting board overseen by diverse body of trustees publically accountable to a Monitoring Board of capital market authorities Working in the public interest IFRS Advisory Council Monitoring Board Trustees of the IFRS Foundation Standard-setting activities International Accounting Standards Board (IASB) Operational activities

4 International Financial Reporting Standards 4 Why Global Standards? The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation

5 The reality 5 Global markets require global standards Economies now transcend national borders Accounting and auditing needs strengthening High Quality information facilitates the allocation of global capital We reaffirm our objective to achieve a single set of high quality global accounting standards G20 Leaders Communique, Cannes 2011

6 Creating a level playing field 6 Investor confidence good financial statements Comparability, consistency, efficiency across global markets Global Accounting Standards Global accounting standards will provide the bedrock on which to build a stronger, more resilient financial system

7 Benefits of global standards 7 Global standards can help to ensure efficient allocation of capital on a global scale by: Attracting allocation of capital globally Reducing the cost of capital Increasing worldwide investment

8 Benefits of global standards 8 Standardisation of information systems Global standards can help companies to reduce costs and increase efficiency: Eliminate wasteful reconciliations Audit efficiencies

9 IFRSs: just one piece of the puzzle 9 IFRSs Corporate Governance Enforcement Good financial statements auditing

10 International Financial Reporting Standards Changing with the times The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation

11 Global markets: growing & diversifying 11 Global Market Domestic Share % 29% 4% 11% 52% 15% 18% 27% % 9% USA Americas EMEA 20 China Asia 0 Global Market Capitalisation (US$ Trillions)

12 Progress towards global accounting standards countries now require or permit IFRSs From 2012, 2/3rds of G20 require IFRS G20 Members requiring use of IFRS Adoption year European Union 2005 U.K France 2005 Germany 2005 Italy 2005 South Africa 2005 Australia 2007 Brazil 2010 Canada 2011 Korea 2011 Mexico 2012 Argentina 2012 Russia 2012 Source: IASPlus / Deloitte

13 Fortune Global 500 reporting trends Fortune 500 members reporting basis: Based on announced plans (%) IFRS* US GAAP National GAAP (inc Japan) *or word for word equivalent

14 International Financial Reporting Standards 14 How the standards are set The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation

15 The corner stones of IFRS development 15 Independence Accountability Legitimacy

16 The standard setting process 16 Research Programme Standards-level Programme Possible problem with financial reporting Initial assessme nt and research Discussion Paper Discussion Paper Exposure Draft Final Standard Final Standard Postimplementation review No action required Maintenance IFRS Interpretations Committee ED Annual Improvements Interpretations Narrow focus amendments

17 International Financial Reporting Standards Priorities The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation

18 Priorities 18 Completion of existing work plan Completing revisions to Conceptual Framework Ensure that disclosure requirements are appropriate Addressing the topic of Other Comprehensive Income (OCI) Implementing recommendations from Trustees Strategy Review Monitoring Board Governance Review

19 International Financial Reporting Standards The IASB as the global accounting standard-setter Governance and strategy reviews The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation

20 Governance and strategy reviews 20 Monitoring Board (Governance) Institutional aspects of governance Assess composition and respective responsibilities of MB, Trustees and IASB Trustees (Strategy) Articulate a clear vision for the Foundation Examine mission, governance, standard-setting process and financing of the Foundation Independent but coordinated reviews, with joint action plan

21 International Financial Reporting Standards Monitoring Board Governance Review Conclusions The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation

22 Monitoring Board governance review - conclusions 22 Maintain existing three-tier governance model Clearer delineation of responsibilities Separation of IASB Chair and Foundation CEO Monitoring Board membership Permanent membership criteria to be use of IFRSs Membership to be expanded Monitoring Board activities Greater transparency and closer dialogue with Trustees and IASB

23 International Financial Reporting Standards Trustees Strategy Review Conclusions The views expressed in this presentation are those of the presenter, not necessarily those of the IASB or IFRS Foundation

24 Mission Reaffirmed focus on investors and other market participants Adoption as goal, convergence as a means to this end Improve consistency of international application and implementation Establish network of formal relationships with: National and regional standard-setting bodies Securities and audit regulators Accountancy bodies and other interested parties 24

25 Governance & Financing 25 Reaffirmed three-tier structure Recognise that Trustee responsibilities required clearer delineation from IASB activities Appointed David Loweth as Director for Trustee Activities Expand existing base of financing Funding to be on a longer term basis (3-5 years) Publicly sponsored

26 Trustees strategy review conclusions 26 Standard-setting process More active Trustee oversight through DPOC Clearer demonstration of how IASB priorities are set Methodology for field testing and post implementation reviews Develop a dedicated research facility Greater consideration on translation and electronic filing of standards

27 Thank you 27