ECON ready to support Commission conclusion on EFRAG funding
29 Aug 2016
On 31 August 2016, the Committee on Economic and Monetary Affairs (ECON) of the European Parliament (EP) will consider a draft report that would support a proposal by the European Commission (EC) to extend the financing of the European Financial Reporting Advisory Group (EFRAG) beyond 2016.
Regulation (EU) No 258/2014 of the European Parliament and of the Council of 3 April 2014 established a programme of EU co-financing of the International Financial Reporting Standards (IFRS) Foundation, the European Financial Reporting Advisory Group (EFRAG), and the Public Interest Oversight Board (PIOB). The regulation formed the legal basis for the continuation of financing the IFRS Foundation and PIOB for the period 2014-2020 and of EFRAG for the period 2014-2016. The agreement limited the financing period of EFRAG to three years in view of prospective reforms that might arise from the Maystadt Report.
In April 2016, the EC concluded that the governance reform of EFRAG has been successfully implemented on 31 October 2014. Consequently, the EC proposed to extend the European Union co-financing of EFRAG for the period 2017 - 2020 under the programme established by the regulation. Later the same month, a committee referral was announced in Parliament with a final ECON vote expected on 11 October 2016.
The draft report prepared for the ECON meeting this Wednesday acknowledges "EFRAG’s key role in ensuring a clear and strong European voice on accounting matters at international level" and "agrees with the Commission proposal to continue the Union’s Co-Financing of EFRAG for the period of 2017-2020 in order to meet the long-term objectives of the Union programme". However, the report also notes that:
Regulation (EU) No 258/2014 requires the Commission to prepare an annual report on the activity of the IFRS Foundation as regards the development of IFRS, of PIOB and of EFRAG. With regard to EFRAG, such annual report should also refer to the follow-up and implementation of the recommendations and demands made in the European Parliament’s resolution of 7 June 2016 on International Accounting Standards (IAS) evaluation and the activities of the IFRS Foundation, EFRAG and PIOB.
The June 2016 EP resolution is not legally binding but serves as guidance and reference in future EU law-making processes.
Please click for the following addition information on the EP website:
