Question

What are the steps followed by the IASB in developing International Accounting Standards?

Answer 1

In developing international accounting standards, the IASC, now IASB follows the following procedures:

• The IASC board selects a topic and assigns it to a steering committee which is made of four representatives, at least one of which is a board member and at least one of which is from a developing country.
• The steering committee studies the issues involved and presents to the board a point outline on the topic.
• The board gives its comments to the steering committee which then prepares a preliminary draft of the proposed standard.
• The board reviews preliminary draft of the new standard and then circulates it among all the member bodies for their comments.
• Based on these comments, the steering committee prepares a revised draft and a final exposure draft is submitted to the board for approval.
• If approved by a two-thirds vote of the board, the exposure draft will be sent to IASC members. The exposure draft is published in all member countries and world-wide public comments are invited from all interested parties, both professional and non-professional.
• At the conclusion of the exposure period, usually six months, the comments submitted are considered by the steering committee, and then a final standard is drafted.
• The steering committee submits the revised draft of the final standard to the board for its approval; and if approved by at least 8 of the 14 members of the board, it will be issued as a new IAS.