09 Jan 2014
Representatives from the European Parliament (EUP), Commission and Council proposed that a tranche of money be dedicated to support financial auditing and reporting activities on a long-term basis, and the agreement is now ready to go before the EUP. The other groups in the co-financing agreement are the European Financial Reporting Advisory Group (EFRAG) and the Public Interest Oversight Board (PIOB).
The agreement follows the EU Parliament’s announcement in November 2013 that, on the back of an influential vote by the Committee on Economic and Monetary Affairs, it was minded to place restrictions on the IASB’s funding allocations unless a number of requirements were met. Broadly, ECON’s concern was that European money should be spent in line with European priorities.
Part of ECON’s recommendation had included the annual review of the standard-setter’s stipend, but the trialogue agreement avoids that restriction, settling on an annual funding agreement of €4.3m to the IFRS Foundation (which oversees the IASB), for the next six years.
The €4.3m represents 17% of the IFRS Foundation’s total budget. By continuing to fund IFRS, the PIOB and EFRAG, the EU is signalling its intent to strongly back the standard setting and oversight bodies. “In order to be independent, possess the sufficient capacity and expertise to produce quality standards and input to those standards, these organisations need a sound financial basis” said Michel Barnier, Commissioner for the Internal Market.