How are IFRS® Standards developed?

Summary

The video explains the open and inclusive process the global accounting standard setter follows to develop new accounting standards. It starts with research and identifying issues, followed by gathering feedback through discussion papers and exposure drafts. The process involves transparent board meetings, consultations with advisory bodies, and collecting feedback from organizations and individuals worldwide. After refining the draft based on this feedback, a new standard is issued with a start date for implementation, followed by ongoing support to ensure its effectiveness.

Takeaways

• 😀 The process of developing global accounting standards is open and inclusive, inviting participation from diverse stakeholders.
• 😀 The first stage of any project is research, where issues are explored and possible solutions are identified.
• 😀 A discussion paper is often created to outline initial ideas and gather feedback on the approach to be taken.
• 😀 Projects are selected for the actual standard-setting phase based on the research and feedback gathered.
• 😀 The accounting standard development process is fully transparent, with board meetings open for observation and papers available for review.
• 😀 A draft standard is published as an exposure draft, and feedback is encouraged from global participants.
• 😀 Anyone can contribute feedback during the exposure draft phase, with numerous opportunities for involvement.
• 😀 Feedback from advisory bodies, organizations, and individuals is gathered through comment letters, meetings, and events.
• 😀 The feedback is used to refine and improve the draft standard before it is finalized and issued.
• 😀 New standards are issued with a start date, giving countries and companies time to prepare for implementation.
• 😀 Support is provided to ensure successful implementation of the new standard, ensuring it works as intended.

Q & A

What is the first stage in the process of setting accounting standards?

The first stage is typically the research program, where issues are explored and possible solutions are identified.

How does the research phase contribute to the development of accounting standards?

During the research phase, ideas are often set out in a discussion paper, which seeks feedback on how to proceed with potential solutions.

What happens after the research phase in the accounting standard-setting process?

After the research phase, projects are selected to move to the actual standard-setting phase, where the new accounting standard is developed.

How does the global accounting standard-setting body ensure transparency during the development of new standards?

The process is completely transparent, with the public able to observe board meetings and read the papers produced during the development of standards.

What is the purpose of an exposure draft in the standard-setting process?

The exposure draft is published when the draft standard is ready, and it encourages feedback from around the world to refine the proposals.

Who can participate in providing feedback on the proposed accounting standards?

Anyone can participate and contribute, including organizations and individuals, who are encouraged to submit feedback during the exposure draft phase.

What role do advisory bodies play in the development of new accounting standards?

Advisory bodies are consulted during the process to provide expert input and insights, helping refine the proposals.

How is feedback from stakeholders handled during the standard-setting process?

Feedback is collected in the form of comment letters, often numbering in the hundreds, and the standard-setting body participates in numerous meetings and events to discuss these proposals.

What happens after feedback is collected on the exposure draft?

Based on the feedback, further refinements are made to the proposals before issuing the new standard.

What is the significance of the start date for every new accounting standard?

Each new standard has a start date, allowing countries time to authorize its use and giving companies time to prepare for the new requirements.