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October 1, 2023

IFRS Foundation’s Cool Club Doesn’t Require Support of IFRS, Rather Something That Would Closely Resemble IFRS

Back in November, the IASB threw out this Accounting Standards Advisory Forum idea that would allow a dozen national rulemaking bodies to get together and talk fancy about debits and credits. An accounting cool club, if you will. There was one small catch — anyone in the club had to sign on as supporters of IFRS.

That gave some people (read: the FASB) the willies, so they've scrapped that idea:

Promoting the adoption of IFRS will not be a prerequisite for standard setters to participate in a new forum the IFRS Foundation is forming to advise the International Accounting Standards Board (IASB) on technical standard-setting issues. Documents released Friday showed that the IFRS Foundation is dropping the proposed requirement. This move and other changes in language from the original proposal could facilitate FASB’s participation in the forum.
Whew! That should make everyone a little more comfortable. Of course, there are still conditions to get into the accounting cool club:
The foundation is requiring national and regional standard setters that wish to participate in the forum to sign a Memorandum of Understanding (MoU) with the foundation. 
Okay, sign a memo, you're in the club and there's no tie to IFRS. Seems reasonable enough. HOWEVAH!
The MoU proposal requires participants to agree to support and contribute to the foundation in its mission to develop a single set of high-quality, understandable, enforceable and globally accepted financial reporting standards.

In other words, the IFRS Foundation is saying that you can be in club as long as you get behind a "high-quality, understandable, enforceable and globally accepted financial reporting standards" that they aren't saying is IFRS, but is something that probably looks, sounds, and tastes a lot like IFRS without all that IFRS aftertaste. "Diet IFRS" or "IFRS Zero" or "New IFRS" or something.

As hilarious as this completely transparent effort by the IASB is, the Financial Accounting Foundation is playing along for now:

Robert Stewart, FAF’s vice president for communications, said in a statement that FAF appreciates the responsiveness the IFRS Foundation demonstrated in revising its proposal. “As we said in our comment letter, we believe the establishment of the ASAF represents an important opportunity for greater cooperation and collaboration among standard setters,” Stewart said. “We are in the process of reviewing the revised materials, including the proposed new commitments.”
And we'll get our rejection letter drafted ASAP. 

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