Developing a UK Standard

The ASB follows a process in the development of accounting standards that ensures that the Board is well informed on the subject, that comments from all interested parties are fully considered, and that the reasons for the Board’s decisions are clear.

The development of a standard is led by a Project Director who is responsible for undertaking research, identifying and utilising sources of expertise. The Project Director identifies issues and proposed solutions which are debated by the Board.

For a major project, proposals are put forward in a Discussion Paper, which sets out the case for a new or revised accounting standard, and suggests how the most important issues might be approached. The Discussion Paper is published both in hard copy form and on the ASB’s website and publicised in the Board’s newsletter ‘Inside Track’. A period, normally at least three months, is allowed for public comment. Comments received are placed on the public record.

Following the Board’s consideration of these comments, and any further research considered necessary, a Financial Reporting Exposure Draft (FRED) is published, setting out as nearly as practicable the text that is proposed for an accounting standard, together with the Board’s reasoning. Publicity and the solicitation of comments is the same as that for a Discussion Paper.

If the Board is minded to take an approach that differs in major respects from that set out in a Discussion Paper or FRED, it will undertake further consultation either informally with knowledgeable parties or by the issue of a further Discussion Paper or FRED as appropriate.

The final standard reflects the Board’s deliberations on the comments received. It is accompanied by a statement of the Board’s reasons in reaching the conclusions reflected in the standard. The views of any Board members who dissent from the issue of a standard are also explained, identifying which of the requirements the dissenters disagree with and the approach that they would support for the relevant issue.