IFRS Foundation Funding OK’d by European Parliament, Pending Study

by FEI Daily Staff

The European Parliament (EP) voted last week to approve the European Commission’s proposed funding of a significant portion of the budget of the International Financial Reporting Standards (IFRS) Foundation, which oversees the International Accounting Standards Board (IASB), and the European Financial Reporting Advisory Group (EFRAG).

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EU ParlimentAccording to the European Parliament’s press release issued following the March 13 vote, the regulation approved provides for annual funding of, 4.3 million euro ($5.98 million) to the IFRS Foundation (17 percent of its budget), 3.4 million euro to EFRAG (43 percent of its budget) and 0.3 million euro to PIOB (22 percent of its budget).”

The announcement continues, “The regulation will limit the financing period of EFRAG to three years in view of prospective reforms of this organisation following the recommendations presented on 12 November 2013 by Mr Philippe Maystadt acting as a special advisor to [Internal Markets] Commissioner Barnier (IP/13/1065). After that period, the Commission could propose to continue the financing of EFRAG on the basis of an assessment of its activities and the implementation of these reforms.”

The funding package comes with some strings attached.

Mark Byatt, the IFRS Foundation’s director of corporate communications and external affairs, explained, “The European Parliament has asked the [European] Commission to undertake a couple of studies by a certain date.  For example, the commission is going to undertake a study on Europe’s experience of IFRS, as well as seeing if there are any recommendations to our own governance arrangements”

“If they do come up with some suggestions,” Byatt continued, “that will dovetail neatly into the scheduled public consultation on the structure and effectiveness of the IFRS Foundation that will begin in 2015.” (See the reference to 2015 Organizational Review in IFRS Foundation’s Feb. 24, 2014, press release.)

Byatt concluded, “We are grateful to the European Union for its continued financial contribution to the global funding of the IFRS Foundation.”

See also: The EU Single Market-Accounting-Governance Reform-Philippe Maystadt’s Report, and extension of Maystadt’s mission;    IFRS Foundation Funding,IFRS Foundation Annual Reports, Is SEC on the (IFRS) Roadmap Again? FAF Contributes $3 Million to IFRS Foundation – Update 2 ; From the President’s Desk (U.S. Financial Accounting Foundation (FAF); February, 2014).