How do we maintain IFRS?
The IASB and the IFRS Interpretations Committee (the ‘Interpretations Committee’) are responsible for the maintenance of IFRS. The types of issue that the Interpretations Committee is called on to deal with include the identification of divergent practices that have emerged for accounting for particular transactions, cases of doubt about the appropriate accounting treatment for a particular circumstance or concerns expressed by investors about poorly specified disclosure requirements.
The objectives of the Interpretations Committee are to interpret the application of IFRS, provide timely guidance on financial reporting issues that are not specifically addressed in IFRS and undertake other tasks at the request of the IASB. The IASB and the Interpretations Committee share a common view on the role that the Interpretations Committee should play; both bodies see the Interpretations Committee as working in partnership with the IASB to give guidance that responds to the implementation needs of those applying IFRS. Both bodies also see the importance of achieving a balance between the principle-based approach of IFRS and providing guidance with sufficient detail to ensure that it is useful and practical.
The IFRS Interpretations Committee due process comprises the following stages:
- identification of matters;
- setting the agenda;
- IFRS Interpretations Committee meetings and voting;
- development of minor or narrow-scope amendments to Standards; and
- development of Interpretations.