Driving quality, trust and global acceptance of IFRS Standards
Our mission is to develop high-quality IFRS® Standards that bring transparency, accountability and efficiency to capital markets around the world.
How do we ensure that the Standards are high quality?
The answer lies in:
- our governance and structure, which ensure our Trustees and standard-setting boards reflect an appropriate mix of professional expertise and geographical diversity; and
- our rigorous, inclusive and transparent due process, through which we enable stakeholders all over the world to follow and contribute to our work.
These mechanisms help to ensure that the best global thinking shapes the future of corporate reporting.
Read on to learn more about our due process and how the Trustees oversee it.
Underlying principles
The IFRS Foundation due process comprises the requirements followed by the International Accounting Standards Board (IASB), the International Sustainability Standards Board (ISSB) and the IFRS Interpretations Committee when they develop Standards and other materials.
The process, developed in consultation with stakeholders, is based on three principles:
- Transparency. Anyone interested should be able to follow the development of IFRS Standards. To facilitate this transparency, all of our technical discussions take place in public meetings, which are broadcast live and archived on our website. All meeting papers are publicly available.
- Full and fair consultation. Before our Standards are issued or amended, we consult publicly. Public consultations give everyone affected or interested an opportunity to share their views on the issue. Comment letters responding to the consultations are posted on our website.
- Accountability. The boards and the Interpretations Committee explain the rationale for their proposals and decisions. They also analyse and present the likely effects—costs and benefits—of a new requirement.
Standard-setting procedures
The Due Process Handbook is our standard-setting ‘manual’. It outlines the requirements the boards and the Interpretations Committee must meet in their technical work.
The Handbook sets out:
- how the boards decide whether to add projects to their work plans;
- the stages of standard-setting and the types of consultation documents and other materials published by the boards and the Interpretations Committee;
- the minimum consultation requirements, including the duration of consultations;
- how a range of stakeholder groups must be consulted to provide input to the standard-setting process;
- the minimum voting requirements for the boards and the Interpretations Committee to advance proposals or finalise documents at different stages of standard-setting; and
- the procedures followed if a stakeholder complains about the due process.
Due process oversight
The IFRS Foundation Trustees are responsible for ensuring the due process remains fit for purpose and reflects good practice. They are also responsible for monitoring IASB, ISSB and Interpretations Committee compliance with the due process. The Trustees carry out these responsibilities via their Due Process Oversight Committee.
The Due Process Oversight Committee’s meetings are held in public to enable stakeholders to follow discussions on:
- how the boards and the Interpretations Committee have delivered on their due process obligations;
- any requests by the boards or the Interpretations Committee for shorter consultation periods than the minimum specified in the Handbook;
- comments or complaints from stakeholders about application of due process requirements; and
- updates to the Handbook, among other items.
The Trustees will propose updates to the Due Process Handbook to reflect the creation of the ISSB. Meanwhile, the requirements specified in the Handbook for the IASB also apply to the ISSB.
Why all this matters?
Our due process is recognised for its inclusiveness, rigour and transparency. It ensures that all relevant views have been considered and that the Standards are of high quality—building trust and global acceptance of IFRS Standards and, ultimately, bringing better information for better decisions to the capital markets.
