International Accounting standards committee Foundation (IASCF)

The governance of ‘IASC foundation rests with 22 trustees; individuals with senior executive experience drawn from diverse geographical and professional backgrounds from both public and private sectors. Trustees are appointed for a renwable period of 3 years; 6 trustees are appointed from Asia / Oceanic region, 6 from Europe, 6 from North America and 4 from any region.

The objectives of IASCF are:

• To develop, in the public interest, a single set of high quality, understandable and enforceable global accounting standards that require high quality, transparent and comparable information in financial statements and other financial reporting to help participants in the world’s capital markets and other users make economic decisions;
• To promote the use and rigorous application of those standards;

Monitoring Board

The constitution requires setting up of a ‘Monitoring Board’, which provide a formal link between IASC Foundation trustees and Public authorities. The link seeks to replicate the link between accounting standard setters and public authorities who have overseen accounting standard setters.

The responsibilities of Monitoring Board are:

• Participate in the process of appointing trustees to IASCF and approve there appointment
• Review and provide advise to trustees on fulfillment of there responsbilties

The monitoring board comprises relevant leaders from Emerging Markets and Technical Committees of the International Organization of Securities Commission (IOSCO), the European Commission, the Japan Financial Services Agency (FSA), and the US Securities and Exchange Commission (SEC). The Basel Committee on Banking Supervision will sit as a formal observer at Monitoring Board meetings.  

International Accounting standards Board (IASB)

IASB is the independent standard setting board, appointed and overseen by IASC and, supported by external advisor council (SAC) and interpretations comitte (IFRIC). IASB works with national accounting standard setters for achiving convergence around the world. The trustees of IASCF shall appoint 16 members to IASB drawn from various regions of the world in order to ensure a broad international basis.

IASB shall:

• Have complete responsibility for all IASB technical matters including the preparation and issuing of International Accounting Standards, International Financial Reporting standards and exposure drafts.
• Publish an exposure draft on all projects and normally publish a discussion document for public comment on major projects;
• Have full discretion in developing and pursuing the technical agenda of the IASB and over project assignments on technical matters:

International Financial Reporting Interpretations Committee (IFRIC)

The International Financial Reporting Interpretations Committee (IFRIC) shall comprise fourteen voting members, appointed by the Trustees. The Committee shall interpret the application of International Accounting Standards (IASs) and International Financial Reporting Standards (IFRSs) and provide timely guidance on financial reporting issues not specifically addressed in IASs and IFRSs, in the context of the IASB Framework, and undertake other tasks at the request of the IASB.

Standards Advisory Council (SAC)

The constitution requires establishment of Standards Advisory Council (SAC), whose members are appointed by IASCF, which provides a forum for participation by organizations and individuals, with an interest in international financial reporting, having diverse geographical and functional backgrounds. The functions of SAC are

• Advice to the IASB on agenda decisions and priorities in the IASB’s work;
• Informing the IASB of the views of the organisations and individuals on the Council on major standard-setting projects and

Process of Developing Standards

International Financial Reporting Standards (IFRSs) are developed through an international consultation process, the "due process”, which involves interested individuals and organizations from around the world.

The “due process” has six stages to ensure compliance at various points throughout:

• Setting the agenda
• Planning the project
• Developing and publishing the discussion paper
• Developing and publishing the exposure drat
• Developing and publishing the standard
• After the standard is issued

The IASB evaluates the merits of adding a potential item to its agenda mainly by reference to the needs of investors. The IASB considers:

• the relevance to users of the information and the reliability of information that could be provided
• existing guidance available
• the possibility of increasing convergence
• the quality of the standard to be developed
• resource constraints.

IASB normally publishes a discussion paper as its first publication on any major new topic to explain the issue and solicit early comment from constituents. Typically, a discussion paper includes:

• a comprehensive overview of the issue;
• possible approaches in addressing the issue;
• the preliminary views of its authors or the IASB; and
• an invitation to comment.

Publication of Exposure draft is the IASB’s main vehicle for consulting the public and is mandatory step in due process. 

The development of an IFRS is carried out during IASB meetings, when the IASB considers the comments received on the exposure draft. After all due processes are completed and all outstanding issues are resolved and, the IASB members have balloted in favour of the publication, an IFRS is issued.

After an IFRS is issued, the staff and the IASB members hold regular meetings with interested parties, including other standard-setting bodies, to help understand unanticipated issues related to the practical implementation and potential impact of its proposals. Those studies may result in items being added to the IASB’s agenda.