Without any irony, the IASB is about to give you the opportunity to take part in a consultation process on the future shape of its entire work plan. As a 15 June IASB meeting paper explains: "The consultation process was introduced by the trustees of the IFRS Foundation in 2010 in response to comments received during the constitution review of the IFRS Foundation." A good time to revisit pension plan measurement? Reality check.
The IFRS Advisory Council discussed the agenda in November 2009, February 2010, and June 2010. Then in August 2010, the Council sent a report to the board on the results of its discussions. "In February 2011," the paper goes on, "the IFRS Advisory Council discussed the proposed approach to the consultation, reviewed an early draft of the proposed agenda consultation request for views and provided its feedback. The proposals were also discussed with the IFRS Foundation trustees in March 2011."
The result of almost two years of talk at public expense in a London hotel will be yet more talk during the July meeting of the IFRS Foundation Trustees, further consideration by the IASB itself, and finally publication of a consultation document in July. The decision to release the document in July - the end of July given the timing of that month's board meeting - means that European constituents will have just two full months to meet the proposed November comment deadline.
At this point, the timeline becomes hazy. Allegedly, during the first quarter of 2012, the board will publish a comment summary and start discussions with the IFRS Advisory Council. During the second quarter, expect to see a feedback statement revealing "what has been learnt from the agenda consultation". You may wish to note that the 15 June discussion of the agenda consultation only took place after a last-minute change to the meeting agenda.
The risk inherent in this process is that the consultation document will be irrelevant even before it is published next month, an issue hinted at by IASB member Paul Pactor on 15 June: "This morning we agreed to re-expose the project on revenue recognition and we indicated... leases is likely to be re-exposed and there is a timing issue, and possibly insurance might get re-exposed."
Pactor continued: "So, in your consultation, I think we need to tell our constituents our latest plan in dealing with the on-going projects, so you may need to update this to tell people [that] we've already made some commitments for the next, you could say 12 months, 18 months, whatever the number of months it is, to finish those additional exposure drafts."
The scale of the problem is much greater than this suggests. The consultation paper was predicated on the IASB finishing its convergence agenda work by June 2011. Instead, outgoing chairman David Tweedie has left his successor a series of ill-conceived, half-completed and half-baked projects.
Alongside re-exposing the revenue recognition exposure draft, it is likely IASB will do the same with leases. Politically it would be hard to resist doing the same with insurance accounting. All three projects were supposed to be finished by now. Work has yet to restart on financial statement presentation, liabilities and equity, and IAS37.
More worrying, from both a political and a technical standpoint is financial instruments. Converged? Not even close — and that is without FASB re-exposing its model. An analysis by the German national standard setter reveals that across 12 areas of activity on financial instruments, the boards are non-aligned on five, have yet to address two, have reached an identical position on one, and have achieved qualified comparability on the other four. If the G20 leaders want an easy read across from IFRS to US GAAP, they should really think again.
And the relevance of this to any future consideration of pensions accounting? - they have no time to re-think pensions accounting. When the Greek economy finally implodes and Europe faces the sovereign debt crisis first flagged up by this column in 2009, the IASB will face crunch-time.
In the four years since the 2007 credit shock, IASB and FASB have failed to put in place an accounting model that forces banks to come clean about the toxic debt hidden away as amortized cost loans in their footnote disclosures. When the next systemic shock hits, we will have in place the same accounting framework in place that existed in 2007. Pensions will be the least of the IASB's worries when politicians look around for someone to blame. So get used to living with the updates to IAS19.