EFRAG strives to enlarge General Assembly

  • EFRAG (European Financial Reporting Advisory Group) (dk green) Image

29 Nov 2013

In reaction to the Maystadt report released earlier this month, which received the unanimous support of the European Union's Economic and Financial Affairs Council (ECOFIN) to transform EFRAG, EFRAG is beginning to implement the changes concerning its own governance.

Enlarging EFRAG's General Assembly to include National Funding Mechanisms (NFM) and welcome other European organisations is aimed at satisfying an earlier request of NFM (more particularly those set in France, Germany, Italy and the UK) to gain greater ownership and responsibility in EFRAG and it is also intended as an encouragement for Member States that do not yet have such a mechanism to set up one up.

NFM (national systems that collect contributions to fund EFRAG) exist in Denmark, France, Germany, Italy, Norway, Sweden and the UK and until 2010, EFRAG was entirely funded by its Member Organisations and the NFM. Since 2010, the European Commission contributes to the funding through a grant but Mr Maystadt warned in his report that "due to budgetary constraints, the EU grant for 2014 will [...] be decreased".

The final report had therefore recommended to analyse the legal possibility of establishing a system of compulsory contributions/ levies paid by listed companies that use and benefit from IFRS. Pending the implementation of such a levy system, Mr Maystadt recommended for the meantime that Member States organise a National Funding Mechanism (NFM) if it has not yet been done.

EFRAG still needs to secure its funding for 2014. European funding for the whole year 2014 has not been confirmed as the draft regulation supporting such funding is still being debated by European institutions. EFRAG expects that it will continue to benefit from European funding but delays in issuing the final regulation are likely to delay the payments. Therefore, the EFRAG Supervisory Board has decided to call upon NFM to formalise their financial commitment to EFRAG in 2014 "so that EFRAG can face without any concern any potentially delayed payment of the EC contribution".

Please click for the press release on the EFRAG website.

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