Update from the IFRS Foundation

Date recorded:

Yael Almog reviewed the Trustees’ activities as they implement the results of their Strategy Review. She noted in particular the establishment of the ASAF, and thanked the Monitoring Board for their assistance.

Accounting Standards Advisory Forum (ASAF)

Masa Kono hoped that the ASAF would not become a closed group and hoped that the IASB would continue to collaborate with other standard-setters. Ms Almog noted that the annual World Standard-setters’ meeting would continue and that the IASB Chair, as Chair of ASAF, had the right to invite other standard-setters to ASAF meetings, with the agreement of other members, when necessary. Other less formal bilateral opportunities were also being explored.

Mr. Barnier also welcomed the establishment of the ASAF, noting that it should enhance the ownership of IFRSs by national standard-setters. He noted that balancing the interests of all EU member states was not easy and asked the IFRSF Trustees to consider rotating the EU delegation on an annual basis, rather than the standard two-year terms. Mr. Prada responded that the Trustees, while sensitive to the circumstances of the EU’s participation, were unlikely to respond to this request immediately, but would continue to monitor the situation and allow ASAF to settle.

IFRS Foundation financials and funding

Miranda Corti, IFRSF Chief Financial Officer, reviewed the 2012 financial statements, which had been approved on 10 April 2013. A surplus had been reported, a significant shortfall in contributions (primarily from expected contributions in the US) had been off-set by lower than budgeted remuneration expenses, achieved primarily through delayed appointments.

Ms. Corti also presented the IFRS Foundation’s 3-year budget/ operating plan.  This assumed no significant increase in headcount, but steady funding. This produced a funding gap of £1.4 millions in 2013, growing to £2.2 millions in 2015.

Mr. Prada used this bleak projection to introduce the Trustees’ revised approach to funding:

Pillar 1: the majority of funding coming from country-based, publicly-sponsored schemes;

Pillar 2: private sector support, primarily from the international accounting firm networks;

Pillar 3: IFRSF-generated commercial income from selling ‘IFRSF Works’ and related IP.

Mr. Prada (and other Trustees) stressed that the Monitoring Board had a significant role in supporting the establishment and operation of stable funding regimes in their jurisdictions.

A member of the Monitoring Board suggested that an external review of the IFRS Foundation’s budget and expenditure would provide evidence/ validation of the IFRSF’s needs and resources. In response, Ms. Almog noted that the IFRSF is subject to an annual ‘audit’ as part of the EU’s grant. The EU has a right to review any aspect of the IFRSF and has found no issues since this arrangement became operational.

IFRS Foundation Due Process Oversight Committee activities

Scott Evans, DPOC Chair, presented a brief report of the DPOC’s activities. He noted in particular the comprehensive review and enhancement of the IASB’s due process requirements and the issue of the revised Due Process Handbook in February 2013.

Use of IFRS: Country Profiles

Ms. Almog introduced very briefly the IFRSF’s Country Profiles project. Each profile will contain information on the application of IFRS in a particular country, endorsement, application and enforcement issues, etc. She noted IOSCO’s Committee 1 participation in verifying this information. Mr. Kono noted that the Monitoring Board members would be paying more attention to this issue, and that the Country Profiles would be useful as the Board assessed candidates for membership of the Monitoring Board.

Correction list for hyphenation

These words serve as exceptions. Once entered, they are only hyphenated at the specified hyphenation points. Each word should be on a separate line.