27/07/2019 - Comment letter on Proposed amendments to the IFRS Foundation Due Process Handbook

​On 29 April 2019 the IFRS Foundation issued an Exposure Draft Proposed amendments to the IFRS Foundation Due Process Handbook (the ED) .

In its comment letter, EFRAG acknowledges that most of the proposals in the ED provide necessary clarifications to the existing processes, reflect recent developments in working practices and improve internal consistency and understandability of the Due Process Handbook.

However, EFRAG suggests that for major projects, detailed effect analysis reports should be issued at each stage when key due process documents are issued, provided that the assessments of macroeconomic effects and quantitative analyses are proportionate and do not unnecessarily delay standard setting.

EFRAG is also concerned about the ambiguity of the status and objectives of IFRS IC agenda decisions. EFRAG considers that the IASB should ensure in its due process that agenda decisions only contain explanatory material and references to the mandatory content of IFRS Standards and that diversity in practice and IFRS-like guidance is addressed through standard-setting such as through the annual improvements process.

In order to minimise controversy when it is concluded that standard setting is not required, EFRAG suggests that a broader consensus rather than a simple majority vote is required. A simple majority where the vote is close would suggest that there is a lack of clarity and potential diversity in practice. However, public consultations would allow the identification of any material diversity in practice. 

In addition, EFRAG also raises concerns about the proposed Board agenda decisions.

The final comment letter is available here.