Which three of the following are functions of the IFRS Committee Foundation?
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The International Financial Reporting Standards Foundation or IFRS Foundation (sometimes IFRSF) is a nonprofit organization that oversees financial reporting standard-setting. Its main objectives include the development and promotion of the International Financial Reporting Standards (IFRS), through the International Accounting Standards Board (IASB) for accounting standards and the International Sustainability Standards Board for sustainability-related standards (the latter known as IFRS-S). Show The IFRS Foundation states that its mission is to develop IFRS Standards that bring transparency, accountability and efficiency to financial markets around the world, and that their work serves the public interest by fostering trust, growth and long-term financial stability in the global economy. The foundation is governed by a group of 22 trustees, themselves under the oversight of a "Monitoring Board" of public authorities. Background[edit]In 2001, the International Accounting Standards Committee (IASC, established 1973) reformed itself under a new dual structure consisting mainly of an independent standard-setting body, the International Accounting Standards Board, and a foundation that appoints and funds the IASB, initially named the IASC Foundation. The IASB assumed accounting standard-setting responsibilities from the IASC on 1 March 2001. The IASC Foundation changed its name to IFRS Foundation on 1 July 2010. During the first twenty years of activity, the IASB was the foundation's dominant standard-setting body. In 2021, the IFRS Foundation established a second standard-setting board under itself, the International Sustainability Standards Board. Activities[edit]The IFRS Foundation hosts the IASB and a separate committee, the International Financial Reporting Interpretations Committee (IFRIC) which issues interpretations, which are documents that complement the IFRS standards and form part of the IFRS set. Separately, the IASB sets out IFRS for small and medium-sized entities (SMEs) to better meet the specific needs of SMEs than is possible with the full IFRS Standards, which are intended primarily for publicly listed entities. The IASB also develops and maintains the IFRS Taxonomy, consisting of elements that can be used to tag disclosures in financial statements prepared using IFRS Standards. Tagging makes information computer-readable and, therefore, more accessible to investors and other users of electronic company financial reports. The eXtensible Business Reporting Language (XBRL) is used to represent and deliver IFRS Taxonomy content. Organisation and governance[edit]The Columbus Building at 7 Westferry Circus in Canary Wharf has been home to the IFRS Foundation and IASB since August 2018 the building at 30, Cannon Street was the previous head office of the IFRS Foundation and IASB, from 2001 to 2018 The IFRS Foundation is funded in part by country-specific funding regimes involving stakeholder groups, or levies and other contributions through regulatory authorities, and also by self-generated income. As of 2022, its executive director is Lee White. The foundation is governed by a board of 22 trustees, including, as of 2022:
The trustees' responsibilities include appointing members to and establishing the operating procedures of the IASB, Interpretations Committee and Advisory Council, and approving the foundation's budget. They are accountable to a monitoring board of public authorities, the IFRS Foundation Monitoring Board. Following the outbreak of the COVID-19 pandemic in March 2020, the IASB has supported stakeholders on COVID-19-related questions about the application of International Financial Reporting Standards (IFRS) and has postponed less critical consultations and some effective dates of recently adopted amendments. In June 2020, the IASB issued amendments to IFRS 17 Insurance Contracts, which aim to reduce the costs of implementation and to make it easier for companies to explain the results of applying IFRS 17. The amendments postponed the effective date of IFRS 17 from 1 January 2021 to 1 January 2023 and extended the optional deferral of IFRS 9 Financial Instruments granted to the insurance industry accordingly. In August 2020, the IASB issued phase 2 of the project “IBOR Reform and its Effects on Financial Reporting” by publishing amendments to IFRS 9 Financial Instruments, International Accounting Standards (IAS) 39 Financial Instruments: Recognition and Measurement, IFRS 7 Financial Instruments: Disclosures, IFRS 4 Insurance Contracts and IFRS 16 Leases. The objective was to prevent that IFRS would trigger unwarranted accounting consequences upon the actual replacement of the benchmark interest rates for hedge accounting. In December 2020, the IASB began discussing feedback on its request for information on the second Comprehensive Review of the IFRS for SMEs Standard with a view to align it with the full IFRS standards without causing undue cost and effort for SMEs. 2.1.2.Research projects The 2017-2021 work plan of the IASB aims at improving and supporting existing standards, promoting better communication and supporting implementation. In 2020, as part of its "Better Communication" project, the IASB continued its technical discussions following feedback on the published Exposure Draft General Presentation and Disclosures– proposing improvements to the structure and content of the Primary Financial Statements with a focus on the statement of financial performance. In October 2020, the IASB started the post-implementation review of IFRS 9 Financial Instruments with a review of the classification and measurement requirements. 2.2.Due process In August 2020, the IASB published a revised Due Process Handbook. An important change is that in the future the IASB will publish explanatory material about implementation questions arising from an issued standard before its application date. 2.3.Governance, transparency and accountability 2.3.1.Governance The IFRS Foundation is a non-profit organisation, under the General Corporation Law of the State of Delaware (United States), established to develop, promote and facilitate the use of a single set of high-quality, understandable, enforceable and globally recognised accounting standards, and headquartered in London (United Kingdom). The IASB consists of 14 members subject to geographical balance requirements. IASB members are nominated for a five-year term, renewable once. The IASB is responsible for standard setting. In November 2020, the Trustees announced the appointment of Prof Dr Andreas Barckow to serve as Chair of the IASB, from July 2021 onward. The Trustees also appoint the 14 members of the IFRIC, dedicated to interpreting the application of IFRS Standards and providing guidance on financial reporting issues, and the members of the IFRS Advisory Council. 2.3.2.Transparency rules 2.3.3.Representation of stakeholders The IFRS Foundation constitution requires the appointment of six Trustees from Europe, as well for America and Asia-Oceania plus one Trustee from Africa and three Trustees from any area subject to maintaining an overall geographical balance. Similary, the criteria for appointment as board member of the IASB require four members from each region, one member from Africa and one member from any area. On 31 December 2020, the IFRS Advisory Council comprised 51 organizations including the European Central Bank (ECB) and the European Securities and Markets Authority (ESMA). The Commission participates as an observer. 2.3.4.Accountability towards the European Parliament A full account of the development of IFRS has to be submitted to the European Parliament in accordance with Regulation (EU)2017/827. The annual exchange of views between the Committee on Economic and Monetary Affairs (ECON) of the European Parliament and Mr Hoogervorst, Chair of the IASB and Mr Liikanen, Chair of the IFRS Foundation's Trustees, took place on 18 February 2020. 2.3.5.Prevention of conflict of interests The Trustees of the IFRS Foundation are appointed for a three years term renewable once, and must commit to act in the public interest. In principle, a Trustee and a Monitoring Board Member cannot be employed by the same organization. With one exception, all IASB members are full-time. They have to sever all employment relationships and ties that might affect their independence. Neither secondment from an employer nor rights to reintegrate with the former employer are allowed. 2.3.6.Breakdown of funding In 2020, the IFRS Foundation received a EUR 4.9 million grant from the Commission, representing 23.7% of the total contributions received. The Commission continued to be the largest contributor. The relative share of the Commission budget and Member States funding went up compared to 2019 (from 38.5% to 42.8%). A breakdown of funding by main geographical areas and international accounting networks shows that the EU and its Member States made 42.8% of the total contributions, Asia-Oceania 35.2%, international accounting networks 13%, Americas 5.9%, Africa 0% and others 3%. The downward trend in contribution of the IFRS Foundation in recent years has continued in 2020. The reported contributions were down by 9.5% as a whole, however with significant variations between contributors. The decrease in the reported contributions from international audit networks was offset by a commercial arrangement resulting in increased licensing revenues. The IFRS Foundation reported a net surplus of GBP 3.5 million (2019: GBP 3.8 million). The total retained surplus as at 31 December 2020 amounted to GBP 41.5 million. 3.EFRAG 3.1.activities EFRAG’s mission is to serve the European public interest by developing and promoting European views in the field of financial reporting and ensuring that these views are properly considered in the IASB’s standard-setting process and in related international debates. EFRAG provides advice to the Commission on whether new (or revised) IFRS Standards should be endorsed by the EU, based on the criteria of the Regulation N°1606/2002 on the application of international accounting standards (‘IAS Regulation’), including the true and fair view principle and whether they would be conducive to the European public good. As part of the Commission’s Action Plan on Financing Sustainable Growth (2018), EFRAG established a European Corporate Reporting Lab (“the Lab”), which started its work on climate-related reporting in 2019. 3.1.1.Endorsementand research activities In 2020, EFRAG’s work on financial reporting remained largely driven by the work programme of the IASB, the IFRS Interpretations Committee and the IFRS Foundation. EFRAG started research in the following areas: discounting with low interest rates; better information on intangibles; crypto assets; and variable and contingent considerations. In January 2020, EFRAG issued an academic literature review on intangibles. In April 2020, EFRAG published a feedback statement on its Discussion Paper Accounting for pension plans with an asset-return promise. In July 2020, EFRAG circulated a discussion paper on the accounting for crypto-assets. Through its Academic Panel and Academic Network, EFRAG enhanced its cooperation with academics. 3.1.2.Sustainability reporting The Lab appointed its first Project Task Force (PTF) on climate-related reporting assisted by a stakeholder outreach with nearly 50 participants. The PTF report published on 6 February 2020 highlighted good reporting practices and recommended two supplements on general climate disclosures and scenario analysis reporting. In May 2020, a second PTF was appointed on Reporting of non-financial risks and opportunities and linkage to the business model. It started its discussions in September 2020 and its report is due by Mid 2021. On 25 June 2020, Executive Vice-President Dombrovskis conveyed two mandates to EFRAG. The first mandate was a request for EFRAG to undertake preparatory work for possible EU sustainability reporting standards in a revised Non-Financial Reporting Directive. Following a call for interest, EFRAG established a multi-stakeholder Task Force with 35 experts, who elected Mr Patrick de Cambourg, president of the French Autorité des normes comptables, as the Chair. The Task Force report included a roadmap and 54 recommendations for the development of a comprehensive set of EU sustainability reporting standards. The Task Force considered input from global initiatives, as well as feedback received from outreach events organised by EFRAG across the EU with a large number of panellists and broad stakeholder participation. The second mandate was an invitation ad personam to EFRAG Board President Jean-Paul Gauzès, to provide recommendations on the possible need for changes to the governance and funding of EFRAG if it were to become the EU sustainability reporting standard setter. His report proposes reforms to EFRAG's governance and funding structure. 3.2.Governance, transparency and accountability 3.2.1.Governance 3.2.2.Transparency rules EFRAG has put in place a transparent public due process, which has further developed over time. This due process allows all European constituents to put forward their views for consideration by EFRAG. It ensures that the diversity of accounting and economic models and views in Europe are taken into account in determining EFRAG’s positions, especially with regard to the endorsement of IFRS Standards. Also in the area of sustainability reporting EFRAG has sought the views of a wide range of stakeholders. As part of its due process, EFRAG publishes draft positions for consultation, undertakes field tests and other forms of effect analyses, organises outreach events (some of which are especially aimed at users) and undertakes special surveys, publishes their results in feedback statements and then publishes its final positions. EFRAG contributes to evidence-based standard setting by undertaking quantitative studies that inform the discussion on EFRAG’s comment letters and endorsement advice and which are gradually becoming a more important part of EFRAG’s research work. Meetings of the EFRAG Board, EFRAG Technical Expert Group (EFRAG TEG) and EFRAG Consultative Forum of Standard Setters (EFRAG CFSS) are held in public and the agendas, supporting agenda papers and summaries of the meetings are published on EFRAG’s website. Since March 2018 the meetings can also be watched on-line. EFRAG maintains a public Transparency Register, which covers the meetings of the EFRAG Board President, the EFRAG TEG Chairwoman and the EFRAG CEO. 3.2.3.representation and accountability EFRAG strives for a proper geographical, professional background and gender balance in its Board, Technical Expert Group and its Working Groups and Advisory Panels and the European Lab Steering Group and its project task forces. There is a limit for the number of members of the EFRAG Board, EFRAG TEG and the European Lab Steering Group with the same nationality. There are also rules to balance professional background and gender. EFRAG Board members are nominated by the EFRAG Member Organisations according to a system put in place following the Maystadt recommendations. Public calls for candidates are issued for the EFRAG TEG, its Working Groups, Advisory Panels and of the European Lab Steering Group and its project task forces. A recurring concern is that relatively few women and persons from Central and Eastern Europe respond to these calls. 3.2.4.PREVENTION OF CONFLICT OF INTERESTS 3.2.5.Contacts the European Parliament and Member States EFRAG regularly attends meetings of the Accounting Regulatory Committee to discuss outstanding issues, in particular concerning the endorsement of IFRS Standards. In 2020, the focus was mostly on IFRS 17. EFRAG has also occassionally contacts with members of the European Parliament. In October 2020, the EFRAG TEG Chairwoman had an exchange of views in the scrutiny slot with ECON on IFRS 17. Mr Pascal Canfin, Chair of the Committee on the Environment, Public Health and Food Safety in the European Parliament (ENVI) spoke at the launch of the European Lab publication on climate-related reporting. 3.3.Diversification and budget EFRAG is a publicly and privately funded organisation working in the European public interest. EFRAG has the legal from of an AISBL (Belgian international non-profit organisation). EFRAG’s Member Organisations comprise eight European Stakeholder Organisations and nine National Organisations. The Commission funds a maximum 60% of EFRAG’s eligible costs. In 2020, EFRAG requested EUR 2.8 million grant from the Commission. Other cash contributions came from European stakeholder organisations (EUR 635,000) and national stakeholder organisations (i.e. France, Germany, UK, Italy, Netherlands, Denmark, Spain, Sweden and Luxembourg) (EUR 1.6 million). At the end of 2020, the UK Financial Reporting Council (FRC) stepped down as EFRAG member organisation following Brexit. EFRAG is seeking to broaden its membership base to cover ideally all EU Member States and welcomes the support of the Commission, European Parliament and the Member States to encourage other national organisations to join. In 2021, EFRAG welcomed the contributions from an Austrian organisation and countries of the European Economic Area (EEA). In March 2021, the EFRAG General Assembly approved a new finance and governance structure to bring more transparency, logic and fairness in EFRAG’s financial contribution system. The financing for the two chapters which provide the private funding of EFRAG (i.e. European Stakeholder Organisations and National Organisations) has been changed. The national organisations chapter’s financial contributions are based on a GDP criterion. The European stakeholder organisations chapter’s financial contributions are based on a sector model (accountancy profession sector, banking sector, corporate sector, insurance sector, SME/SMP sector) with a financial contribution of EUR 150,000 per sector. There is an exemption for the user sector. In addition to financial contributions, EFRAG receives contributions in kind provided by the members of EFRAG TEG, the EFRAG Board, the Working Groups and Advisory Panels, for instance in the form of temporary secondments. 4. PIOB 4.1.Activities The PIOB provides independent oversight throughout the entire process of global auditing standard setting to help ensure that standards development is fully responsive to stakeholder needs, accountable and transparent. The PIOB is headquartered in Madrid where it operates as a Technical Committee of a regulated Spanish not-for-profit Foundation and is overseen by the Spanish Foundations Protectorate. 4.2.Governance and accountability The Monitoring Group, of which the Commission is a member, monitors how the PIOB carries out the oversight of the standard setting process and appoints the ten PIOB members (including the Chair) based on the allocation among its members. In December 2020, the Commission invited the members of the Committee of European Auditing Oversight Bodies (CEAOB) to propose candidates to replace the two Commission nominees (Ms Aileen Pierce (IE) and Mr Karel Van Hulle (BE)), whose terms were to expire. This has led to the nomination of Ms Begona Giner (ES) and Ms Janine van Diggelen (NL) on 23 April 2021. Every year, each PIOB member signs a declaration of absence of conflicts of interest. No conflicts of interests have been reported in 2020. 4.3.Diversification of funding The funding of the PIOB is designed to preserve its independence in fact and appearance. Since 2010, the European Union has been the second biggest donor. In 2020, PIOB’s revenue (monetary and in-kind contributions) amounted to EUR 1,804,463. The EU contribution was EUR 345,000 (or 19.12%), whereas the International Federation of Accountants (IFAC) still contributed EUR 1,064,438 (or 58.99%), which is below the cap of 66.66% permitted by Article 9.5 of the Regulation). Other contributions came from the International Organization of Securities Commissions (IOSCO), Bank for International Settlements (BIS), International Forum of Independent Regulators (IFIAR), FRC, the Swiss Federal Audit Oversight Authority, the Financial Supervisory Commission of Taiwan, while the Spanish government provides the Madrid office for free (estimated at EUR 189,318 in 2020). Further diversification of funds remains necessary. As part of its reform, the Monitoring Group aims to bring the IFAC funding of the PIOB below 50%. 5.Conclusions This is the last annual report of the Commission under Regulation No 258/2014. The funding programme has been indispensable for the three beneficiaries (IFRS Foundation, EFRAG and PIOB). The EU funding enabled them to serve the European public interest by developing and promoting European views in the field of financial reporting and auditing and ensuring these views are properly considered in the IASB and IFAC standard-setting processes. Which are the three bodies included in the IFRS Foundation?Governance.. Advisory.. Due process.. IASB and IFRS Interpretations Committee.. International Sustainability Standards Board (ISSB). ISSB Board membership.. What are the functions of IFRS interpretation committee?The main activity of the IFRS Interpretations Committee (the Committee) is responding to questions about the application of IFRS Standards. The Committee response may include developing explanatory material or recommending that the International Accounting Standards Board (IASB) amend the existing IFRS Standards.
Which one of the following is a function of the IFRS Foundation?The objectives of the IFRS Foundation are: to develop, in the public interest, a single set of high quality, understandable, enforceable and globally accepted financial reporting standards based upon clearly articulated principles.
What are the 4 principles of IFRS?IFRS requires that financial statements be prepared using four basic principles: clarity, relevance, reliability, and comparability.
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