Due process

The IASB’s due process has become more elaborate over time, and is now enshrined in a document (IASB Due Process Handbook) that can be consulted from the website. The process consists of a series of stages:

For some reason, agenda decisions are a political hot potato. Some constituents get very excited about how a decision is made to deal with one subject and not another. In fact there is a formal process. The IASB has criteria that have to be met for an item to be considered. Various organizations make informal suggestions, but usually the problem is trying to sort out what topics should be at the top of the priority list and the IASB consults widely on this.

Having identified something that is thought to be a priority, staff have to prepare an agenda decision paper. This analyses the accounting issue, explains why people think there is a problem, and considers whether the issue meets the necessary criteria. This paper is formally reviewed by an advisory body (the IFRS Advisory Council) and the oversight body (Trustees of the IFRS Foundation). If they are in agreement, then the paper is formally put to the Board.

This should be the start of work on the topic, but in practice even when an item is on the formal agenda it can get sidelined, either because there is a lack of enthusiasm (e.g. intangible assets) or there are more pressing priorities (the financial crisis ...

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