Update on Trustee activities

Date recorded:

Michel Prada, Chairman of the IFRS Foundation, briefed the Council on the results of the IFRS Foundation Trustees’ meeting in Hong Kong in January 2013 and subsequent meetings with the IFRSF Monitoring Board and key political bodies.

Mr Prada noted that the Trustees spent considerable time on the related matters of strategy and funding, in particular in the light of the “no decision” decision on the domestic use if IFRSs in the United States.  The Trustees remain focused on supporting the global reach of IFRSs, and noted that China was ‘almost fully on IFRSs’; the situation in Japan was encouraging but ‘more complex’; and still more challenging.  However, the Trustees recognised the need to move ‘beyond the transatlantic dynamic’.  At the same time, there was a need to convey a message to the US that they were part of the solution and they needed to respond in ‘a more positive’ manner.

On funding, the IFRS Foundation was developing a revised approach to its funding model, one which balanced the public and private sectors.  A continued commitment from the major audit firm networks (perhaps going beyond the ‘Big 4/ Major 6’ firms) was likely.  Mr Prada was confident that such funding did not impair the IFRS Foundation’s or IASB’s independence.  Some contribution to the organisation’s operating budget from commercial activities was expected, but (given the IFRSF’s not-for-profit status) this could only ever be marginal.  Public sector support would continue to be allocated relative to a neutral measure, such as GDP.  He noted that the US was not the only significant jurisdiction not meeting its notional commitment to the IFRS Foundation.

Mr Prada noted also that the Trustees approved the IASB signing a Memorandum of Understanding with the International Integrated Reporting Council; the approval of the revised Due Process Handbook; the approval of amendments to the IFRSF Constitution and other due process matters.  In addition, they had discussed matters related to establishing research capacity at the IASB and XBRL.  He noted that the Trustees had given a large degree of support to establishing the Accounting Standards Advisory Forum.  Mr Prada also noted a successful stakeholder event held in Hong Kong.

Mr Prada had met with the Monitoring Board (update from the Monitoring Board).

Subsequent to the meetings in Hong Kong, Mr Prada had held a series of meetings in the United States and Canada, meeting with the Chair of the US Securities and Exchange Commission, the Executive committee of the Financial Accounting Foundation, the US Treasury, the Chair of the International Monetary Fund and the Chair of the Financial Stability Forum.  These meetings proved that there was a high degree of international organisational support for IFRSs, as well as an acknowledgement that the US environment was challenging, given an impending change in Chairman and domestic rulemaking priorities.

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