In November 2010, the IFRS Foundation Trustees’ Due Process Oversight Committee issued a request for views to assess the operational effectiveness of the Interpretations Committee (the Committee – formerly known as IFRIC). The review is being conducted by means of a questionnaire. The EFRAG Supervisory Board (SB) will respond to this request.
The EFRAG SB believes that significant efforts have been made over the years to improve the operational effectiveness and transparent manner in which the Committee presently operates; however the EFRAG SB still has some concerns and therefore welcomes the opportunity to comment. the concerns are summarised below.
The Committee should more carefully consider the criteria for agenda making decisions in order to improve the quality of the assessment of some of the issues it receives. We are concerned that some of the wordings for rejection used by the Committee to explain agenda rejections are in some cases themselves interpretations. In our view, rejection notices should not be written as though they were authoritative guidance as they are not subject to a full due process, and also not subject to an endorsement process in the European Union.
In addition, the EFRAG SB believes that some of the Interpretations issued by the Committee are based on tentative decisions taken by the IASB, which are not necessarily authoritative IFRS literature and furthermore might be subject to change as a result of field-test results and comments received on the respective IASB proposals.
Finally, we are concerned that a 30-days comment period for tentative agenda decisions does not always provide sufficient time to allow constituents to appropriately analyse the issues, respect their own due process and respond to the Committee in a timely manner.