7 UKEB Due Process Handbook Review

16 July 2026 Agenda Paper 7

Executive Summary

Project Type
UKEB Governance

Project Scope
Moderate

Purpose of the paper
The purpose of this paper is to obtain the Board’s feedback on the [Draft] Revised Due Process Handbook.

Summary of the Issue
The Due Process Handbook (DPH) consolidates the requirements set out in legislation, and in the UKEB’s Terms of Reference (ToR), to set out the due process the UKEB follows in carrying out its statutory functions.

The UKEB ToR, set by the Secretary of State, provide further detail on the UKEB’s role and responsibilities as they relate to the statutory functions. Paragraph 10.2(c) requires the UKEB to review its DPH at least once every five years, to ensure that it is meeting the guiding principles and to make any revisions deemed appropriate.

At the June 2026 meeting, the Board approved the proposed approach to revising the DPH, and the project timeline. This paper sets out the key due process steps the revised DPH would contain, following that approach.

Decisions for the Board
1. Does the Board have any comments on the content of the revised DPH? 2. Is the Board content for the [Draft] Revised DPH consultation package to be brought to its September 2026 meeting for approval to publish for public consultation? 3. Does the Board have any specific questions it would like to pose to stakeholders in the Invitation to Comment?

Recommendation
The Board agrees to the proposed [Draft] Revised DPH consultation package to be brought to its September 2026 meeting for approval to publish for public consultation.

---

Appendices
Appendix A [Draft] Revised Due Process Handbook

Due Process Handbook Review

Statutory Responsibilities

1 The International Accounting Standards (Delegation of Functions) (EU Exit) Regulations 2021 (2021/609) confers upon the UK Endorsement Board (UKEB) the functions set out in Chapter 3 of Part 2 of The International Accounting Standards and European Public Limited-Liability Company (Amendment etc.) (EU Exit) Regulations 2019 (2019/685).

2 The UKEB, as the body responsible for the adoption of international accounting standards, for use in the UK, must ensure the standards provide:

1. a high degree of transparency and international comparability of financial statements; and
2. the efficient allocation of capital, including the smooth functioning of capital markets in the UK.

3 The Regulations also require the UKEB to participate in and contribute to the development of a single set of international accounting standards.

4 Each year, the UKEB must report to the Secretary of State on how it has carried out its statutory responsibilities under the Regulations. This report is laid before Parliament.

5 The full text of the legislative requirements is set out in Section 2 of the UKEB’s DPH.

Terms of Reference

6 The ToR, set by the Secretary of State, were adopted by the UKEB when it was established, on 26 March 2021.

7 The ToR set out the UKEB’s role and responsibilities as they relate to the statutory functions of:

1. influencing the development of international accounting standards and the other activities of the International Accounting Standards Board (IASB) and the IFRS Interpretations Committee; and
2. endorsing and adopting new international accounting standards, amendments to international accounting standards or IFRIC Interpretations for use in the UK.

8 Paragraph 3.2(d) requires the UKEB to “develop, maintain and follow rules of procedural fairness and transparency in relation to the exercise of its functions in a Due Process Handbook which shall set out:

1. Appropriate procedures and policies for the work undertaken by the Endorsement Board.
2. Matters which shall be subject to public consultation with a representative range of stakeholders.
3. The UK Endorsement Board’s policy on what amounts to a significant change in accounting practice, and for the standards that meet the criteria in regulation 7 of SI 2019/685, the appropriate due process for the review of the impact of the adoption of the standard.”

9 Paragraph 4.2 (c)-(e) and (g) of the ToR requires the UKEB to:

1. Provide a clear, publicly available rationale for its decisions.
2. Consult with UK stakeholders affected by financial reporting and analyse the potential impacts of IASB proposals.
3. Undertake assessments of the IASB’s proposals against the endorsement criteria. (Legislative requirement under SI 2019/685)
4. Undertake relevant impact assessments in line with the administrative and legal requirements of the BEIS Better Regulation Framework.

10 Paragraph 10.2(c) requires the UKEB to review the DPH at least once every five years, “to ensure that it is meeting the guiding principles… and to make any necessary revisions following such consultation as deemed appropriate by the UK Endorsement Board”.

Guiding Principles

11 The UKEB is required, under the ToR, to act at all times in accordance with its guiding principles of Accountability, Independence, Transparency, and Thought Leadership, as follows:

1. Accountability – includes being accountable to:
   1. UK stakeholders with an interest in financial reporting, requiring the UKEB to consult with them, undertake activities in a timely manner, and provide rationale for the decisions it makes.
   2. its oversight body, the FRC, in relation to adherence to due process; and
   3. the Secretary of State, in relation to the performance of its statutory functions.
2. Independence – from other organisations or stakeholder groups, including the FRC and DBT, in respect of its statutory functions, including its technical decision making.
3. Transparency – requires the UKEB to undertake its activities in a transparent manner so that stakeholders are aware of current projects and understand how technical decisions have been made.
4. Thought Leadership – requires the UKEB to lead and represent the UK on international accounting standards and reporting, both in the UK and at international fora; engage with other national standard-setters to improve influence and understand best practice; and, participate in the development of new global accounting standards by undertaking research.

The Due Process Handbook

12 The DPH consolidates the requirements in the Regulations and the UKEB’s ToR, to set out the due process the UKEB follows in carrying out its statutory functions, and the additional due process steps it follows for:

1. carrying out its thought leadership activities and developing its own research programme;
2. performing its own post–implementation reviews;
3. setting up and operating advisory groups; and
4. ensuring it complies with the required due process steps in the Handbook.

Revised Due Process Handbook

13 The Board is an independent body with delegated powers. Its terms of reference require it to report to the Secretary of State on how it has carried out its statutory functions. Therefore, the proposed revised DPH will focus on the requirements in the legislation and the Board’s ToR.

14 It is essential that the Board’s work is carried out in a clear and transparent manner and that stakeholders with an interest in the UK’s capital markets are engaged throughout. The Board must also ensure that it continues to take a proportionate approach that reflects the prevalence and impact, in the UK, of the issue under consideration.

15 The Board focuses on the UK long term public good, as per the statutory requirement, which also require it to ensure the international accounting standards it adopts enable the efficient allocation of capital, including the smooth functioning of capital markets in the UK. Therefore, the revisions to the DPH are aimed at balancing the needs of investors and businesses, with supporting effective and efficient capital allocation and growth in the economy.

16 The [Draft] revised DPH also ensures that, in line with requirements in legislation, the UKEB continues to provide stakeholders with opportunities to engage in its work and to provide comments and views on its projects.

17 The accompanying due process documents (e.g. the PIP and the Feedback Statement) will be reviewed with the aim for them to be clearer, more concise, and focused on the key issues. This should benefit both the Board and UKEB stakeholders. More accessible documentation could also help to increase engagement with the UKEB’s work.

18 A high-level summary of proposed changes is set out in the table below:

Project Timeline

19 The proposed project timeline is set out below.

Questions for the Board

1. Does the Board have any comments on the content of the [Draft] Revised DPH?
2. Is the Board content for the [Draft] Revised DPH consultation package to be brought to its September 2026 meeting for approval to publish for public consultation?
3. Does the Board have any specific questions it would like to pose to stakeholders in the Invitation to Comment?

---

The UKEB does not accept any liability to any party for any loss, damage or costs howsoever arising, whether directly or indirectly, whether in contract, tort or otherwise from any action or decision taken (or not taken) as a result of any person relying on or otherwise using this document or arising from any omission from it.

© 2022 All Rights Reserved

---

1. Introduction

Purpose

1.1 The purpose of the Due Process Handbook (Handbook) is to set out the due process that the UK Endorsement Board (UKEB) follows in carrying out its statutory functions, in relation to international accounting standards.¹ It also describes additional due process steps that the UKEB follows for:

1. carrying out its thought leadership activities and developing its own research programme;
2. performing its own post–implementation reviews;
3. setting up and operating advisory groups; and
4. ensuring it complies with the required due process steps in this Handbook.

1.2 The UKEB will ensure that its work is carried out in a proportionate way, with regard to the prevalence and impact of the issue to the UK capital market, to UK stakeholders, and to the UK long term public good.

1.3 The Secretary of State for the Department of Business, Energy and Industrial Strategy (BEIS)² (SoS) delegated the functions relating to influencing, endorsing and adopting international accounting standards for application in the UK to the UKEB in May 2021³. The SoS maintains a regular review of the performance of the UKEB in exercising those functions. The UK Financial Reporting Council (FRC) oversees the effective governance of the UKEB and its adherence to the due process set out in this Handbook. It also provides operational support. The FRC does not have the power to direct the UKEB in relation to the determination of its programme of work or the outcome of its technical decision-making⁴.

1.4 This Handbook forms one of the key documents of the UKEB. A diagram of the relationship between these documents can be found in Appendix B.

2. Statutory functions of the UKEB

2.1 The statutory functions exercisable by the SoS that were delegated to the UKEB are set out in the Statutory Instrument 2019 No. 685 (SI 2019/685)⁵. The main statutory functions are reproduced below:

Regulation 5

Responsibility for adoption of international accounting standards

The Secretary of State is responsible for—

1. the adoption of international accounting standards for use within the United Kingdom, with a view to harmonising the financial information presented by the companies required by section 403(1) of the Companies Act 2006 to prepare their accounts in accordance with UK-adopted international accounting standards, in order to ensure—
   1. a high degree of transparency and international comparability of financial statements; and
   2. the efficient allocation of capital, including the smooth functioning of capital markets in the United Kingdom; and
2. participating in and contributing to the development of a single set of international accounting standards.

Regulation 6

Power of the Secretary of State to adopt international accounting standards

1. The Secretary of State may adopt international accounting standards for use within the United Kingdom, in accordance with regulations 7 and 8.
2. In exceptional circumstances, the Secretary of State may exercise the power to adopt international accounting standards in accordance with paragraph (3) or (4).
3. Where the effect of regulation 7 is that an international accounting standard taken as a whole cannot be adopted, the Secretary of State may adopt an international accounting standard in part only, provided that—
   1. those parts of the standard which are not adopted are—
      1. severable from the standard so that the rest of the standard is operational;
      2. severed only to the extent necessary to enable adoption of the rest of the standard for use within the United Kingdom; and
   2. adoption of that part of the standard would be in compliance with regulation 7.
4. Where there is an option available as part of the standard, the Secretary of State may—
   1. make provision in the standard to extend the scope of undertakings eligible to use that option; and
   2. make such extension of scope subject to an undertaking meeting criteria specified by the Secretary of State.

Regulation 7

Basis for adoption of international accounting standards

1. The Secretary of State may only adopt an international accounting standard under regulation 6 if the Secretary of State is of the view that, in relation to the form of the standard the Secretary of State intends to adopt—
   1. the standard is not contrary to either of the following principles—
      1. an undertaking’s accounts must give a true and fair view of the undertaking’s assets, liabilities, financial position and profit or loss;
      2. consolidated accounts must give a true and fair view of the assets, liabilities, financial position and profit or loss of the undertakings included in the accounts taken as a whole, so far as concerns members of the undertaking;
   2. the use of the standard is likely to be conducive to the long term public good in the United Kingdom; and
   3. the standard meets the criteria of understandability, relevance, reliability and comparability required of the financial information needed for making economic decisions and assessing the stewardship of management.
2. In deciding whether the use of a standard is likely to be conducive to the long term public good in the United Kingdom, the Secretary of State must have regard, in particular, to the following matters—
   1. whether the use of the standard is likely to improve the quality of financial reporting;
   2. the costs and benefits that are likely to result from the use of the standard; and
   3. whether the use of the standard is likely to have an adverse effect on the economy of the United Kingdom, including on economic growth.
3. The Secretary of State may, by regulations made by statutory instrument, amend paragraph (2).
4. Regulations made under paragraph (3) are subject to annulment in pursuance of a resolution of either House of Parliament.

Regulation 8

Adoption of standards: consultation

Before adopting an international accounting standard under regulation 6, the Secretary of State must consult such persons as the Secretary of State considers to be representative of those with an interest in the quality and availability of accounts, including users and preparers of accounts.

Regulation 11

Periodic review by Secretary of State of impact of adopted standard

1. The Secretary of State must publish a statement setting out the Secretary of State’s policy on what amounts to a significant change in accounting practice, and must keep this policy statement under review.
2. Paragraphs (3) and (4) apply in relation to the adoption of any standard by the Secretary of State under regulation 6 which the Secretary of State considers likely to lead to a significant change in accounting practice.
3. The Secretary of State must—
   1. carry out a review of the impact of the adoption of the standard; and
   2. publish a report setting out the conclusions of the review no later than 5 years after the date on which the standard takes effect (being the first day of the first financial year in respect of which it must be used).
4. The Secretary of State may carry out subsequent reviews from time to time, and in the event of doing so the Secretary of State must publish a report setting out the conclusions of any review conducted.

Regulation 17

Reporting by the body

1. The body must, at least once in each calendar year for which the delegation regulations are in force, make a report to the Secretary of State on—
   1. the discharge of the functions transferred to it, and
   2. such other matters as the Secretary of State may by regulations require.
2. Delegation regulations may modify paragraph (1) as it has effect in relation to the calendar year in which the regulations come into force or are revoked.
3. The Secretary of State must lay before Parliament copies of each report received under this paragraph.

3. Terms of Reference and Guiding Principles

Terms of Reference

3.1 The Terms of Reference⁶ (ToR) further elaborate on the UKEB’s role and responsibilities as they relate to the statutory functions. The UKEB’s key responsibilities include:

1. Considering and deciding whether to endorse and adopt⁷ new or amended international accounting standards for application in the UK⁸. This includes a formal endorsement criteria assessment as set out in SI 2019/685.
2. Influencing the development of IFRS. The UKEB will follow, contribute to and monitor debates on IASB and IFRS Interpretations Committee (IFRIC) projects; consult with UK stakeholders to obtain their views; highlight any concerns to the IASB at different stages of their projects, including the development of the IASB’s agenda; and respond to the IASB’s draft proposals and consultations (including a request for information on an IASB post–implementation review).⁹
3. Ensuring that there is an open and transparent due process including a public consultation process with UK stakeholders on items such as draft comment letters to the IASB or draft endorsement criteria assessments.
4. Reporting to the FRC Board in relation to the UKEB’s effective operation, governance and adherence to the Handbook.
5. Reporting to the SoS in relation to the performance of the UKEB’s statutory functions.
6. Preparing, and submitting, a regulatory strategy each year, to the SoS for approval.
7. Reviewing, at least once every five years, the UKEB’s Handbook to ensure that it meets the guiding principles set out in paragraph 3.3 of this Handbook, making recommendations for its revision following such consultation as is deemed appropriate by the UKEB.

3.2 The ToR are set by the SoS and adopted by the UKEB.

Guiding Principles

3.3 The UKEB is required to act in accordance with the following guiding principles:

1. Accountability—by consulting with UK stakeholders that are affected by financial reporting, undertaking activities and due process procedures in a timely manner and providing a rationale for the decisions it makes.
2. Independence—to ensure that it acts in the UK’s long term public good and is independent from other organisations or stakeholder groups, including the FRC and DBT, in respect of the performance of its statutory functions, including its technical decision making.
3. Transparency—to undertake its activities in a transparent manner so that stakeholders are aware of current projects and understand how decisions have been made (e.g. by making formal comment letters submitted to the UKEB publicly available¹⁰ on a timely basis).
4. Thought leadership—to:
   1. lead and represent the UK on international accounting standards and reporting;
   2. represent UK views in international fora with the aim of influencing debate;
   3. engage with accounting and reporting and endorsement and adoption bodies in other jurisdictions, to influence and understand best practice; and
   4. pro-actively participate in the development of new global accounting standards, for example by undertaking research.

Milestones and proportionality of due process activities

3.4 This Handbook specifies expected milestones that will guide the UKEB in performing its required due process steps on individual projects.

3.5 The PIP of the applicable project should clearly outline the reasons for each milestone being proposed. These should be agreed by the Board at a public meeting.

4. Governance activities

Quorum of attendance

Voting process for endorsement decisions

4.1 Decisions on the endorsement and adoption of a standard, amendment, or IFRIC interpretation are made at public Board meetings by at least two-thirds of the Members, including the Chair. In exceptional circumstances, if the Chair is not available Members may elect another Member to act as an alternate Chair.

4.2 Following the conclusion of a final written vote, the Chair shall publish the outcome of that vote within 3 working days. Publication of the results of the vote on a standard or part standard will, where the result is to adopt a standard in whole or in part, constitute the adoption of that standard by the UKEB, on a date specified by the UKEB.

4.3 Where the vote to adopt a standard, amendment or interpretation does not reach the required majority, the Chair may, after consultation with external parties including DBT, choose to ask the Board to return to the vote. This may include asking the Board to adopt a standard in whole or in part, constitute the adoption of that standard by the UKEB, on a date it specifies.

4.4 Where a vote by the UKEB to adopt a standard, amendment, or interpretation, whole or in part, has failed to reach the required majority and, in the opinion of the Chair, there is no prospect of such majority being reached, the UKEB Chair must provide a written explanation of circumstances to the SoS within 10 working days of the failure to adopt. The SoS may require further evidence. The Chair must inform Members of any recommendations by the SoS.

4.5 A tentative vote on whether to adopt a new or amended standard must be made at a public Board meeting. The formal written vote must be approved by two-thirds of Members. Paragraphs XX–XX of the Handbook provide more details on the process followed by the Board in deciding whether to endorse a new or amended standard.

Voting process for approving or reviewing the UKEB’s Due Process Handbook

4.6 The approval and any future revisions to the Handbook require discussion and approval at a public Board meeting. The revisions to the Handbook will take place under normal circumstances every five years.

4.7 The Board’s approval of the Handbook and of any revision to it requires the support of a simple majority of the Members present at the meeting. Following this approval, it will be published on the UKEB website.

Voting process for other decisions

4.8 Other decisions at public meetings do not require a formal written vote by the Board. They require the support of a simple majority of the Members present at the meeting, with approval given in a public meeting.

Transparency of meetings and stakeholder observers

4.9 The Board may hold meetings in person, virtually, or by telephone or other similar means. In deciding the format of meeting, the UKEB Chair should take into consideration public access and attendance.

4.10 The meetings schedule for the calendar year is published on the UKEB website.

4.11 Public meetings are webcast live and recorded. The recordings are published on the UKEB website.

4.12 The Board may hold certain discussions in private or in the presence of invited observers with speaking rights only. For instance: meetings held to discuss administrative issues; or

1. education sessions, held before public Board meetings, to improve Members’ understanding of new or complex proposals or standards.

4.13 Only Members and observers with speaking rights¹¹ have the right to speak at Board meetings. Other individuals may be invited by the UKEB Chair to speak at all or part of any meeting, as and when appropriate.

Minutes of public Board meetings

4.14 Minutes of UKEB public meetings shall record the names of those present and in attendance, and summarise the Board discussion and decisions reached. They shall be published on the UKEB website, following their approval by the UKEB at its next public meeting.

4.15 A summary of decisions reached by the Board at each UKEB public meeting is approved by the Chair for publication on the UKEB website, usually within 10 working days of the meeting.

Minutes of private Board meetings

4.16 The minutes for each UKEB private meeting are circulated to Members for approval at the next private meeting. Once approved, extracts of the minutes are published and made available on the UKEB website.

Agenda papers

4.17 The Board agenda and papers for each public meeting are usually made available on the UKEB website no later than five working days¹² before they are scheduled for discussion at a Board meeting. In exceptional circumstances, and with the prior approval of the UKEB Chair, Secretariat papers may be distributed closer to the meeting date.

4.18 Also, only in exceptional circumstances, and taking into consideration the Guiding Principles, the UKEB Chair may, at their absolute discretion, decide that all or part of certain Secretariat papers used for discussion by the Board at public meetings should not be made publicly available. Such circumstances may be, for example, commercial confidentiality or prejudice the conduct of public affairs.

4.19 Board papers for discussion at private Board meetings are not made publicly available.

Keeping stakeholders informed

4.20 The UKEB is committed to conducting its activities in a transparent manner. The principal means of communication, between the UKEB and its stakeholders, is through public meetings, and the posting of relevant information and documents on the UKEB website.

4.21 In particular, the UKEB publishes on its website:

1. Its work plan, meeting schedules, agenda, papers for discussion at public Board meetings, and the minutes and recordings of those meetings;
2. Individual project information, including the draft/final comment letters submitted to the IASB, draft/final Endorsement Criteria Assessments and project closure documents such as feedback statements and adoption statements.
3. Media and information releases relating to its activities.
4. Comment letters submitted to the UKEB, whether in response to consultation documents or unsolicited, unless the respondent has requested confidentiality.
5. Access to educational materials or webinars.

4.22 All public materials, including those related to the UKEB due process, are freely available on the website.

Complaints process

4.23 The UKEB’s complaints policy is accessible on its website.¹³ The UKEB reviews complaints on its standard of service, the behaviour of its personnel and on any action or lack of action by personnel affecting an individual or group when exercising or failing to exercise the UKEB’s functions.

UKEB’s work plan

4.24 The UKEB’s work plan relates to the IASB’s work plan. The Board, in consultation with the Technical Director, prioritises individual projects and resource allocation.

4.25 The UKEB’s work plan includes the projects mentioned below. This list does not attach any priority.

1. Research projects derived from the UKEB’s thought leadership and research programme¹⁴.
2. Influencing projects¹⁵ that include technical issues identified by the IASB and by the IFRS Interpretations Committee that give rise to:
   1. proposals for minor or narrow-scope amendments to international accounting standards that meet the IASB’s criteria for annual improvements or for narrow-scope amendments¹⁶;
   2. proposals for new standards or major amendments to existing standards;
   3. research proposals;
   4. requests for information (for example on the IASB’s post–implementation reviews or on consultations on the IASB’s work plan);
   5. draft IFRIC Interpretations; and
   6. IFRIC tentative agenda decisions on which the Board has decided to respond to the IFRS Interpretations Committee¹⁷.
3. The UKEB’s own post–implementation review projects¹⁸.
4. Endorsement projects¹⁹, which include the endorsement and adoption of new or amended standards.
5. International Sustainability Standards Board (ISSB) projects that have an overlap with IASB projects²⁰.

Prioritising technical projects in the UKEB’s work plan

1. In prioritising and allocating resources to individual projects, the Board shall consider whether the level of activities is proportionate to the issue being addressed.

4.26 The assessment is not limited to using the IASB’s assessment of the potential impact of a project as the UKEB’s remit is different. The UKEB assessment of a project’s significance is made with a UK perspective.

Updating the UKEB’s work plan

4.27 The UKEB’s work plan is updated regularly to add or remove projects from the work plan and to reflect the Board’s decisions in relation to estimated project timelines. It is presented for approval at the Board private meetings and once approved, is uploaded onto the UKEB website.

Consulting on the UKEB’s work plan

4.28 The UKEB consults on its work plan every year as part of its consultation on its regulatory strategy.²¹

5. Influencing process

Overview of the UKEB’s influencing process

5.1 The UKEB shares a common objective with other national standard setters: that of influencing the development and maintenance of high-quality, understandable, enforceable and globally accepted international accounting standards after consulting²² with the public and gathering stakeholder feedback on documents for comment. The means of achieving this objective is set out in this section.

5.2 The UKEB’s influencing activities include the proactive monitoring by the Secretariat of a range of projects being undertaken by the IASB and IFRS Interpretations Committee. The Board discussions may result in the identification of specific concerns or areas of focus for future work by the UKEB²³ and, where appropriate, the UKEB may consider communicating this feedback to the IASB, to the IFRS Interpretations Committee²⁴ or to the ISSB.

Milestones

5.3 Suggested milestones for influencing projects (except for tentative agenda decisions)²⁵ are shown below. In undertaking activities to achieve those milestones, the UKEB takes a proportionate approach (refer to paragraphs XX–XX of this Handbook).

1. Proportionate project initiation plan, which can be revised as the project progresses.
2. Desk-based research.
3. Outreach activities.
4. Draft comment letter, made available for a 30-day public consultation on the UKEB website (unless a shorter period is set by the Board) and usually accompanied by an Invitation to Comment (ITC).
5. Final comment letter, incorporating feedback to the consultation.
6. A feedback statement, reporting feedback to the consultation and evidence derived from other outreach activities.

Influencing tentative agenda decisions

5.4 The IFRS Interpretations Committee (IFRIC) publishes tentative agenda decisions to explain why a standard-setting project should not be added to the IASB’s work plan to address a question submitted. The comment period for a tentative agenda decision is normally 60 days²⁶.

5.5 The UKEB expects to respond to a limited number of tentative IFRIC agenda decisions. The Board may consider the degree of impact on UK companies; disagreement with the IFRIC analysis; or the usefulness of the explanations and clarifications included in the tentative agenda decision.

5.6 The Board might also choose to respond to provide public support for the tentative agenda decision, where others have expressed disagreement with the tentative agenda decision’s analysis.

5.7 If an issue discussed by IFRIC arises outside the usual Board meeting cycle, the UKEB Chair can approve initiation of work on the tentative agenda decision.

Project milestones for tentative agenda decisions

5.8 Given that the shorter consultation period for a tentative agenda decision, the UKEB may consult with a representative group of stakeholders and/or with members of the UKEB’s standing and/or ad-hoc advisory groups.

5.9 After considering comments from UK stakeholders on tentative agenda decisions, the UKEB may decide to recommend that the IFRS Interpretations Committee:

1. finalises a tentative agenda decision²⁷;
2. revises (or abandons) a tentative agenda decision; or
3. refers the matter to the IASB to consider adding a standard-setting project to the IASB’s work plan.

6. Endorsement process

UK statutory requirements for endorsement and adoption

6.1 New or amended standards issued by the IASB are not part of UK-adopted international accounting standards until the UKEB has endorsed and adopted those standards²⁸.

6.2 The primary objective of endorsing and adopting international accounting standards for use in the UK as set out in SI 2019/685²⁹ is to harmonise the financial information presented by relevant companies.

6.3 This is to ensure:

1. a high degree of transparency and international comparability of financial statements; and
2. the efficient allocation of capital, including the smooth functioning of capital markets in the United Kingdom.

6.4 The regulatory power embodied in the UKEB’s endorsement and adoption function lends weight and authority to the UKEB’s influencing activity.

6.5 The UKEB adopts international accounting standards for use within the UK, in accordance with Regulations 6–9 in SI 2019/685.

Overview of UKEB endorsement and adoption process

6.6 The UKEB applies its own process before it decides whether to endorse and adopt a new or amended international accounting standard, to ensure the Board fulfils its statutory responsibility (described in paragraphs XX–XX). This process takes place after a new or amended standard has been issued by the IASB and before the standard is effective.

Milestones

6.7 In undertaking activities to achieve these milestones, the UKEB takes a proportionate approach (refer to paragraphs XX–XX of this Handbook). Such milestones may include:

1. Proportionate project initiation plan, which can be revised as the project progresses.
2. Desk-based research.
3. Outreach activities: Regulation 8 of SI 2019/685 requires the UKEB to consult with a representative range of stakeholders before adopting an international accounting standard.
4. Draft Endorsement Criteria Assessment [DECA] ECA, made available for a 90-day public consultation on the UKEB website (unless a shorter period is set by the Board).
5. Project closure, including vote on adoption as well as the following documents:
   1. Final Endorsement Criteria Assessment (ECA), incorporating stakeholder feedback to the [Draft] ECA.
   2. Feedback statement, incorporating feedback to the [Draft] ECA consultation and from any other outreach activities.
   3. Adoption statement and the text of UK-adopted international accounting standard that is the subject of the endorsement decision.
6. Publication of the documents set out in (e).

Draft Endorsement Criteria Assessment [Draft] ECA

6.8 In general, a [Draft] ECA considers and addresses the following:

1. Introduction: legislative framework and approach to the assessment.
2. Rationale for the new or amended international accounting standard.
3. Whether or not the standard is not contrary to the principle that an entity’s accounts or consolidated accounts must give a true and fair view (SI 2019/685 Regulation 7(1)(a)).
4. Whether or not use of the new or amended standard is likely to be conducive to the long term public good in the UK (SI 2019/685 Regulation 7(1)(b)).
5. Whether or not the standard meets the criteria of relevance, reliability, comparability and understandability required of the financial information needed for making economic decisions and assessing the stewardship of management (SI 2019/685 Regulation 7(1)(c)).
6. Whether or not the new or amended standard is likely to lead to a significant change in accounting practice (refer to paragraph XX of this Handbook) and therefore, whether it meets the criteria for a post–implementation review.

6.9 Where one or more Members are considering not supporting the endorsement and adoption of a new or amended standard, the relevant matter(s) and concern(s) of the Member(s) should be reflected in the [Draft] ECA, so that it is included in the public consultation (refer to paragraph XX of this Handbook).

Project closure

6.10 The project closure process for endorsement projects comprises the following steps:

1. preparation of an ‘adoption package’ by the Secretariat; and
2. voting on the adoption of a new or amended standard.

Adoption package

6.11 The ‘adoption package’ consists of the documents set out at 6.7(e).

Adoption statement

6.12 The adoption statement includes:

1. a statement that the new or amended standard has been:
   1. adopted for use within the UK, in compliance with the requirements in Regulations 7 and 8 of SI 2019/685 and the reasons for this decision; or
   2. partially adopted in accordance with paragraph (3) of Regulation 6 of SI 2019/685 and the reasons for this decision;
2. when applicable, reasons for extending the scope of undertakings eligible to use an option in the standard in accordance with paragraph (4) of Regulation 6, setting out the full details;
3. a description of the financial years in respect of which that standard must be used;
4. the wording of the adopted standard (in a separate document); and
5. a list of the Members that approved the adoption of the new or amended standard by written vote in accordance with paragraph 6.42(b) (see below).

6.13 On an annual basis, the UKEB updates the new or amended international accounting standards that have been adopted during the year into a consolidated text of UK-adopted international accounting standards³⁰.

Voting on the adoption of a new or amended international accounting standard

6.14 Decisions on the endorsement and adoption of a standard or amendment are made at public Board meetings, following the requirements of the ToR³¹:

1. Quorum attendance—A minimum of sixty percent of the appointed members³² are required to attend a meeting of the Board.
2. Decision-making—The final approval for a standard to be formally adopted for use in the UK is brought to a public meeting where the Board provides a tentative vote that is subsequently formalised by a written vote (in paper or electronic form). This vote constitutes proper evidence of the decisions of members of the Board. An affirmative written vote of at least two-thirds of all of the appointed Members, is required for the decision to be passed. Each member of the Board has one vote. Where the vote to adopt a new or amended standard, in whole or in part, does not reach the required majority, the UKEB shall follow the requirements set out in section 4.
3. Publication of the results of the vote–The adoption statement and the text of the UK-adopted international accounting standard (that is the subject to the endorsement decision) are published on the UKEB website within 3 working days of completion of the written vote.³³

7. Thought leadership and research programme

Objectives of thought leadership

7.1 In applying the principle of thought leadership, the UKEB will:

1. Lead the UK debate on international accounting standards and reporting.
2. Represent UK views in international fora with the aim of influencing debate.
3. Engage with accounting and reporting and endorsement and adoption bodies in other jurisdictions, in order to improve influence and understand best practice.
4. Pro-actively participate in the development of new global accounting standards for example by undertaking research.

Leading the UK debate

7.2 The UKEB leads the UK debate on international accounting standards and reporting by:

1. Actively engaging and collaborating with UK stakeholders, where appropriate, during the process of developing its own views, with the aim of building robust and evidence-based recommendations.
2. Developing and presenting the UKEB’s own thought leadership material to promote UK views and lead the accounting debate at relevant international fora.

Participating proactively in the development of global standards

7.3 The UKEB proactively participates in the development of new global accounting standards by:

1. engaging with UK stakeholders and collecting evidence on relevant technical issues and communicating such evidence to the IASB and to other national standard-setters or regional organisations;
2. developing potential ways to improve or remedy deficiencies in international accounting standards; and
3. working proactively with others to stimulate debate on financial reporting matters on the IASB agenda at an early stage in the standard-setting process.

Representing UK views with the aim of influencing debate

7.4 The UKEB directly influences the IASB Board and maintains a global presence on the international financial reporting stage by:

1. Identifying and promoting the appointment of UK representatives to the IASB’s consultative groups.
2. Maintaining effective relationships, communication and presence with the IASB and other national standard-setters or regional organisations, to increase the understanding, awareness and support for UK views, thereby allowing the UKEB to lead on the accounting debate.
3. Communicating outcomes from international engagements to UK stakeholders, to assist in identifying concerns with international proposals.
4. Issuing articles, podcasts or videos, to stimulate debate on a particular matter or technical issue.
5. Obtaining input from, and engaging with, stakeholders to inform our views.

Research programme

Objective

7.5 Research is generally directed to identify specific issues associated with projects that are on the UKEB’s work plan. As such, research may be expected to have a problem-solving orientation,³⁴ by collecting evidence on the nature and extent of the perceived shortcomings of, and assessing potential ways to improve or to remedy a deficiency in, international accounting standards.

7.6 Other more explorative research may also be performed by the UKEB to include the consideration of broader financial reporting matters, such as how financial reporting is evolving, and to encourage international debate on financial reporting matters. This type of research may be formally added to the UKEB’s technical agenda.

7.7 Research may be undertaken by the UKEB on its own or collectively with others (i.e. national standard-setters or regional organisations, regulators, academics and other interested parties). In all cases, the independence of the UKEB will be maintained.

Main outputs

7.8 A research project may give rise to a single output or multiple outputs. The common categories of research outputs derived from the UKEB’s research programme include discussion papers, consultations or requests for information, research papers, bulletins and research studies.

7.9 The Board will determine, on an individual basis, whether a research document will include:

1. the Board’s preliminary views; and/or
2. be issued for public consultation with an invitation to comment (ITC).

Milestones

7.10 The potential milestones are:

Common milestones for all research documents

1. Identification of issues for research and discussion at a public Board meeting;
2. Proportionate project initiation plan which can be revised as the project progresses;
3. Desk-based research, undertaken to assist with the assessment of the appropriate extent of analysis and outreach and to gather evidence on the issue under consideration;
4. Outreach activities, to gather input, views, opinions or other feedback from UK stakeholders, where appropriate;
5. Approval given in a public Board meeting, by the support of a simple majority of the Members present at the meeting, and publication.

Additional milestones for a research document that includes an ITC

1. Draft research document and an ITC published for a 90-day consultation (unless a shorter period is set by the Board);
2. Final research document, incorporating stakeholder feedback;
3. Project closure includes:
   1. Feedback statement, incorporating feedback to the ITC consultation and from any other outreach activities; and
   2. Approval given in a public Board meeting, by the support of a simple majority of the Members present at the meeting, and publication of a final research document.

8. Post–implementation reviews

Introduction

8.1 A standard adopted under Regulation 6 that is likely to lead to a ‘significant change in practice’ (see paragraph XX below), is subject to paragraph 3 of Regulation 11 which requires the UKEB to:

1. ‘carry out a review of the impact of the adoption of the standard [i.e. where the standard is likely to lead to a ‘significant change in accounting practice’]; and
2. publish a report setting out the conclusions of the review no later than 5 years after the date on which the standard takes effect (being the first day of the first financial year in respect of which it must be used)’.

8.2 The UKEB may also decide to initiate subsequent reviews standards where there are significant unexpected changes to financial reporting or unexpected costs or challenges arising from their application.

Meaning of ‘significant change in accounting practice’

8.3 Whether or not a standard adopted under Regulation 6 is likely to lead to a ‘significant change in accounting practice’ will usually depend on the expected impact on UK entities of the standard and may require judgement. During the endorsement process, the UKEB should indicate its preliminary view in the [Draft] ECA regarding whether the new or amended standard meets the criteria for a PIR and, if so, the likely timing of that review in line with the requirements in this section.

8.4 The UKEB is required to explain in the [Draft] ECA/ECA whether, or not, the new or amended standard meets the criteria for a PIR and, if so, the likely timing of that review, in line with the requirements in this section. The project initiation plan (PIP) for the PIR project should include this explanation. The PIP is subject to Board approval at a public meeting³⁵.

Process for undertaking a PIR of a Standard adopted under Regulation 6

Influencing an IASB post–implementation review

8.5 The IASB conducts PIRs to assess the effect of a new or amended standard³⁶. This review begins after the new requirements have been applied internationally for some time, normally within five years of the effective date of the new requirements³⁷. The IASB commences its PIR with an RFI which sets out the initial identification and assessment of the matters to be examined.

8.6 The UKEB promotes awareness on its website of an IASB PIR.

8.7 The influencing process set out in Section 5 of this Handbook applies to the UKEB response to a request for information on an IASB PIR. This process includes the preparation of a PIP, desk-based research, outreach activities (including consultation with UK stakeholders and UKEB advisory groups), preparing draft and final comment letters and preparing project closure documents such as a feedback statement and a due process compliance statement.

8.8 In addition to the process described above, and once the IASB has completed its PIR, the UKEB explains in a separate report³⁸ how the UKEB feedback has been addressed by the IASB as well as any additional UK-specific impacts of adoption of that standard by the UKEB. This report will include:

1. an overview of the IASB PIR and of the UKEB’s influencing process and its timeline;
2. background information to the standard under review;
3. a summary of the evidence gathered and findings;
4. the UKEB’s conclusions from the review; and
5. recommendations or steps it plans to take, if any, as a result of the review.

8.9 If the IASB has commenced but not finalised its PIR in time for the UKEB to comply with its PIR obligations, (i.e. no later than 5 years after the date on which the standard takes effect), the UKEB must at least within that timeframe issue a (draft) report describing the impact of the adoption of the standard and its preliminary conclusions on the review³⁹. Once the IASB has completed its PIR, the UKEB will issue a separate (final) report.

8.10 If the IASB undertakes a PIR of a standard that is not likely to lead to a ‘significant change in accounting practice’, the UKEB is not required to carry out its own PIR but may decide to influence the IASB PIR.

8.11 If the IASB does not undertake a PIR of a standard that is likely to lead to a ‘significant change in accounting practice’, the UKEB is required to undertake its own. This review should be completed no later than 5 years after the date on which the international accounting standard takes effect.

Two phase process for carrying out a UKEB Post–implementation review

Phase one of a UKEB post–implementation review

8.12 In the first phase of a PIR, the UKEB sets out the scope of such a review. It does so on the basis of targeted consultation⁴⁰ with different stakeholder communities (e.g. users, preparers, academics, accounting firms, accounting bodies and regulators), to gather their input, views, opinions or feedback on technical matters. These initial consultations help the UKEB establish the questions to ask in the public RfI.

8.13 The expected milestones for the first phase are:

1. Proportionate project initiation plan (PIP), which can be revised as the project progresses;
2. Desk-based research, to assist with the assessment of the appropriate extent of analysis and outreach and to gather evidence on the need for a PIR;
3. Initial 90-day consultation (unless a shorter period is set by the Board), to inform the UKEB so that it can establish an appropriate scope for the review; and
4. Publication of a request for information, following approval being given in a public Board meeting, by the support of a simple majority of the Members present at the meeting.

Phase two of a UKEB post–implementation review

8.14 In the second phase, the UKEB collects and reviews information, sourced via the RfI, issued during the first phase, and other outreach, to help it assess the impact of the standard being reviewed. During this evidence-gathering phase of the PIR the UKEB also conducts outreach activities to engage with different stakeholders.

8.15 The expected milestones for the second phase are:

1. Outreach activities, as set out in the PIP, which may be updated, as necessary.
2. Project closure: issue of a final report, incorporating stakeholder feedback derived from outreach activities, and setting out the conclusions of the review.

9. Advisory and working groups

Introduction

9.1 The UKEB undertakes targeted consultation by appointing its own standing or ad-hoc advisory groups and working groups. They are not decision-making bodies. Their purpose is to provide expert, specialist technical advice and other input on UKEB projects or other technical matters (e.g. UK-specific implementation issues).

9.2 Members of groups comprise experts who:

1. provide advice and recommendations on specific agenda projects for example by sharing:
   1. knowledge and understanding of financial reporting issues and/or concerns raised by UK stakeholders; and
   2. up-to-date insight into developments and market sentiment on financial reporting matters, helping develop a timely understanding of any concern areas;
2. deliver best practice, practical experience and expertise as well as potential solutions that can improve the quality of information; and
3. help amplify the UKEB’s views across the UK reporting community and drive the debate of contemporary issues.

9.3 In carrying out their work, groups have regard to the UKEB’s Terms of Reference and Guiding Principles (refer to Section 3 of this Handbook).

Types of advisory or working groups

9.4 From time to time, the Secretariat may need specialised technical input into project work. In such cases, the Board may approve the creation of a working group which reports to the Secretariat. The Secretariat will provide updates to the Board on the input received from the working group.

Operating procedures

Approval for the creation of an advisory or working group

9.5 The establishment of an advisory or working group is approved at a Board meeting by a majority of Members present at that meeting.

Terms of reference

9.6 Each advisory group has its own Terms of Reference, setting out the group’s purpose, rules, arrangements for meetings and papers, and the most recent date of approval of the group’s ToR.

Recruitment

9.7 Recruitment should be via a public advertisement, inviting applications. Appointments should be based on interviews. The Board retains the option to make the occasional direct appointment; however, this would need to be in exceptional circumstances, for example when there are few experts in a particular area or no other expert is forthcoming.

Appointments and membership

9.8 The UKEB seeks to ensure that each groups' membership is diverse in terms of skills, experience, background, race and other characteristics, and achieves a gender balance.

9.9 Group members are appointed in their personal capacity. Alternates are not permitted.

9.10 Proposed members are ratified by a majority of Members present at a meeting. Once an appointment has been formally accepted, the member’s details are published on the relevant group’s UKEB webpage.

9.11 Depending on the group’s nature and purpose, the UKEB Chair may appoint a chair for the group (chair) who may be a Member, a member of the Secretariat or a member of the relevant group.

9.12 Members of the groups are appointed for an initial term of three years renewable for a second term of up to three additional years, or for the length of the project (for ad-hoc groups). The term may be shortened or lengthened, if required. There will be staggered rotation of members to ensure continuity on the advisory group. Changes to appointments arising from such reviews are approved by the Board at a private meeting. The membership of the group is then updated on the UKEB website.

Meetings

9.13 Meetings of advisory and working groups are closed and held in private. The chairs will provide the Board with updates from their groups’ meetings at a public meeting.

Appendix A: Relationship between Statutory Instruments (SI) and other governance documents for the UK Endorsement Board

---

Contact Us
UK Endorsement Board
1 Victoria Street | London | SW1H 0ET | United Kingdom
www.endorsement-board.uk

---