How does the LDS Church decide what is included in their scriptural canon? The Church of Jesus Christ of Latter-day Saints has four "Standard Works" that are considered canonical:


The Bible (Old and New Testaments)
The Book of Mormon
The Doctrine and Covenants
The Pearl of Great Price


The Bible and the Book of Mormon are pretty much set in stone as to what they contain, but the other two standard works have changed over time as new revelations have been added over the past couple hundred years.

Two widely-cited official declarations from the past 20 years are "The Family: A Proclamation to the World" and "The Living Christ," but neither has been added to the standard works, despite a new edition of the standard works being published by the Church in 2013. Also, leaders address the Church every six months at General Conference – and while their addresses are universally regarded within the LDS Church as authoritative, they haven't been canonized.

Given that the LDS Church believes in living prophets, continuing revelation, and an open canon, how do they decide what becomes part of the canon?
It seems useful to consider the example of D&amp;C Section 138. Section 138 was a revelation from 1918 but not added until 1981. A section from Sperry Symposium Classics: The Doctrine and Covenants from chapter 22 with the heading From Scripture to Canon describes a process which no doubt illustrates the general manner in which the leaders of the Church would undertake to update the 'LDS canon' as others may call it. The pertinent quote is:


  At a meeting of the Council of the First Presidency and the Quorum of
  the Twelve held in the Salt Lake Temple on March 25, 1976, approval
  was given to add to the Pearl of Great Price...


The answer is apparently that all 15 apostles approve such a change, and we can easily assume acting on prior consideration and after seeking inspiration from God.