Proposal to Establish an Accounting Standards Advisory Forum

The IFRS Foundation has proposed to set up the Accounting Standards Advisory Forum (ASAF) with the aim to formalise, rationalise and streamline the relationships with the National Standard Setters and other regional bodies around the world and to engage with them on a collective basis on technical issues.

The IFRS Foundation issued the Proposal on 1 November 2012 with a deadline for comments on 17 December 2012. EFRAG issued a draft comment letter on 16 November 2012 with a deadline for comments on 7 December 2012.

EFRAG has issued its final comment letter on the Proposal to Establish an Accounting Standards Advisory Forum on 21 December 2012.

EFRAG welcomes the overall spirit and main thrust of the IFRS Foundation's Proposal to Establish an Accounting Standards Advisory Forum as a multilateral technical discussion forum of an advisory nature. In the Forum EFRAG envisages that different views will be debated at an early stage, and participants will gain understanding of how possible requirements are perceived by other members of the IFRS constituency. EFRAG also welcomes the fact that the proposed activities of ASAF will run alongside and complement the roles National Standard Setters and regional bodies play in the IASB due process, research projects, seconding staff, IFRS IC input, outreach activities, field testing and post-implementation reviews.

EFRAG agrees that the Forum should be compact in size to allow for effective and efficient technical discussions. An appropriate balance in the composition of the Forum should support the ambition of the IASB of being the global standard setter while serving the objective of greater acceptability of the IASB's proposals and final standards in jurisdictions where IFRS have been adopted.

EFRAG believes that representativeness in ASAF is important. Therefore it believes that, although the IFRS Foundation should allocate seats to regions, the allocation of the seats within the regions or jurisdictions should be the responsibility of the region or jurisdiction concerned, provided that criteria set by the IFRS Foundation are met. Each jurisdiction or region would have the responsibility to organise itself in order to ensure that it is representative of the views held in the region or jurisdiction at different stages of the international standard setting process.

EFRAG's close collaboration with all National Standard Setters in Europe combined with EFRAG's mandate from the European Commission makes EFRAG well placed to represent Europe in the technical financial reporting debate. In forming its delegation to the ASAF, EFRAG intends to build on its past experience of EFRAG-IASB public meetings in which EFRAG delegation was composed of the Chairmen of EFRAG and of the Standard Setters of France, Germany, Italy and the UK. EFRAG's current enhancements of its due process have been designed to support greater involvement at an earlier stage of other National Standard Setters in Europe. EFRAG intends also to take into account the agenda of the meetings and the various views or issues arising in Europe.

EFRAG is ready, capable and willing to participate and help build a technically competent and representative delegation on behalf of Europe. EFRAG is willing to work in close cooperation and coordination within its Consultative Forum of Standard Setters and the European Commission on the best way to provide a contribution to the proper and effective functioning of the Forum on the basis of the experience acquired in the EFRAG-IASB meetings.

Finally, after careful consideration of comments received, EFRAG is recommending in its final comment letter further clarification: notably on the purpose of the Forum, the scope of the technical discussions that should be held in the Forum, the relationship with other advisory bodies of the IFRS Foundation and the operational processes of the Forum, including the Memorandum of Understanding.

The Trustees of the IFRS Foundation announced the membership of the Accounting Standards Advisory Forum (ASAF) on 19 March 2013. The first meeting of the ASAF took place in London on 8 and 9 April 2013.