ASB invites comments on exposure draft of Preface to International Financial Reporting Standards
News types: Consultation Announcement
Published: 8 November 2011
ASB PN 193
The Accounting Standards Board (ASB) today invited comments on the exposure draft published by the International Accounting Standards Board (IASB) of its preface to International Financial Reporting Standards (IFRSs). In the light of the proposal that consolidated accounts of listed companies in the EU should comply with IFRSs from 2005, the Preface will be relevant to many companies in the UK and the Republic of Ireland.
In developing its response to the IASB, the ASB wishes to take full account of the views of its constituents, and it is asking those interested in financial reporting to write to the ASB setting out their views. The ASB’s request for comments is set out in the attached statement, which draws attention to certain aspects of the proposals.
Comments are requested by the ASB by 15 January 2012 to enable it to meet the IASB’s deadline of 15 February 2012.
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ASB request for comments on draft Preface to International Financial Reporting Standards
The International Accounting Standards Board (IASB) has published an exposure draft of the Preface to International Financial Reporting Standards (IFRSs). It is intended that the Preface will replace the Preface to Statements of International Accounting Standards, which was last revised in 1982. The text of the exposure draft may be found on the IASB’s website www.iasb.org.uk.
Given the ASB’s commitment to convergence on internationally agreed standards, the IASB’s proposals for its due process and the format of its standards are of obvious relevance to UK business. In developing its response to the IASB, therefore, the ASB wishes to take full account of the views of its constituents, and it is asking those interested in financial reporting to write to the ASB setting out their views on any aspect of the Preface. Respondents should note that the IASB has specifically invited comments on the following:
In developing its response to the IASB, the ASB wishes to take full account of the views of its constituents, and it is asking those interested in financial reporting to write to the ASB setting out their views. The ASB’s request for comments is set out in the attached statement, which draws attention to certain aspects of the proposals.
Comments are requested by the ASB by 15 January 2012 to enable it to meet the IASB’s deadline of 15 February 2012.
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ASB request for comments on draft Preface to International Financial Reporting Standards
The International Accounting Standards Board (IASB) has published an exposure draft of the Preface to International Financial Reporting Standards (IFRSs). It is intended that the Preface will replace the Preface to Statements of International Accounting Standards, which was last revised in 1982. The text of the exposure draft may be found on the IASB’s website www.iasb.org.uk.
Given the ASB’s commitment to convergence on internationally agreed standards, the IASB’s proposals for its due process and the format of its standards are of obvious relevance to UK business. In developing its response to the IASB, therefore, the ASB wishes to take full account of the views of its constituents, and it is asking those interested in financial reporting to write to the ASB setting out their views on any aspect of the Preface. Respondents should note that the IASB has specifically invited comments on the following:
- the proposed scope of IFRSs, which is limited to profit-oriented entities;
- the proposal to discontinue the use of ‘black letter’ style standards;
- whether the due process described in the Preface is appropriate; and
- whether any matters not addressed in the draft should be
With regard to issue 1, the draft notes that the Public Sector Committee of the International Federation of Accountants is preparing accounting standards, based on IFRSs, for governments and other public sector entities, other than government business enterprises. However, that initiative does not address non-governmental not-for-profit entities.
The proposal to discontinue the use of ‘black letter’ style standards is likely to be of particular interest in the UK. At present, International Accounting Standards have some paragraphs in bold italic type and others in plain type. This format is similar to that adopted by the ASB in 1997, after consulting on the matter, and has been used in UK standards from FRS 9 onwards. It is also similar to the format used for
accounting standards in several other jurisdictions (although not in the USA), and by the Auditing Practices Board for Statements of Auditing Standards.
The IASB believes that some of its constituents have interpreted the bold italic paragraphs as having more authority than those in plain type. It proposes, therefore, to use a single style of type in its standards, which will be supplemented by guidance illustrating the principles of the standard. The IASB will also provide a detailed Basis for Conclusions.
The ASB’s experience of its ‘black letter’ style of standards has been positive. It has found that:
- a black letter style enables the principles of a standard to be clearly set out.
- it also permits the guidance and explanation to be given at the most convenient place. If this is given elsewhere in a document, it inevitably leads to repetition, and gives rise to the risk that relevant material will be overlooked.
- drawing a line between guidance and the body of a standard is no easier than determining which paragraphs merit bold or normal type
Irrespective of the manner of presentation, however, it is clearly desirable that it is understood that compliance with a standard requires compliance with all parts of the standard.
Comments may be sent to the ASB either by email [email protected] or by post to:
The Secretary
Accounting Standards Board
Holborn Hall
100 Gray’s Inn Road
London
WC1X 8AL
They should be despatched so as to be received by 15 January 2012, and will be regarded as on the public record unless confidentiality is requested by the commentator.
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