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2015 Trustee's Review of Structure and Effectiveness


 Project History

The IFRS Foundation's Constitution requires the Trustees to undertake a review of the structure and effectiveness of the organisation every five years. Previous reviews, published in 2005, 2010 and 2012, recommended significant enhancements to the governance, accountability and operational efficiency of the IFRS Foundation and the IASB, while a Governance Review by the IFRS Foundation Monitoring Board was completed in 2012. The 2015 Request for views (RfV) indicates that the outcomes of these reviews have led to significant enhancements and improvements in the IFRS Foundation's governance and effectiveness.

The IFRS Foundation issued the Request for Views Trustees' Review of Structure and Effectiveness: Issues for Review on 7 July with a deadline for comment of 30 November. The RfV addresses three main area: relevance of IFRS; consistent application of IFRS; and governance and financing of the IFRS Foundation.  


EFRAG response

EFRAG's letter is addressing the issues in relation to the primary strategic goals 1 to 3: development of a single set of standards; global adoption of standards and consistency of application and implementation (Questions 1 to 6). EFRAG does not deal with governance and financing issues which are covered by questions 7 to 14 the core of these issues have already been considered by the European Commission in its evaluation of the IAS Regulation and has decided on some recommendations after extensive public consultation. The European Commission is expected to send its recommendations and other comments to the IFRS Foundation responding to the Request for Views.

The IASB is also seeking input on the Request for Views 2015 IASB Agenda Consultation to gather views on the strategic direction and balance of its work plan. EFRAG has published its Draft Comment Letter on this Request for Views, see for a link to the project page here.

On 5 October EFRAG issued its draft letter on the Trustees Review of Structure and Effectiveness with a deadline for comment of 30 November.

EFRAG's main observations are:
  • EFRAG believes that the IFRS Foundation/IASB should not enter into the domain of public sector or not-for-profit sector standard setting;
  • EFRAG is of the view that the IASB should be fully aware of the developments across the whole range of corporate reporting and can take steps, if and when appropriate, to maintain the relevance of IFRS within corporate reporting debate.
  • EFRAG welcomes the IASB's shift to focus more on the taxonomy itself, leaving the development of the appropriate computer language/software to somebody else.
  • EFRAG believes that Post-implementation Reviews should now be regarded as a useful tool in IASB's Research activities, helping identify what works and what is in need for improvement in current practice, regardless of the date at which a standard has been issued.
  • EFRAG calls on the Trustees to examine and reconsider the effectiveness of its due process oversight. A due process oversight addressing the substance of the complaints will be a major step forward in building the buy-in of the various jurisdictions around the world. EFRAG recommends that the IFRS Foundation commissions an independent review of the effectiveness of its standard-setting process, including the due process oversight process but also the evaluation of the project work on the main standards.
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