The European Union has finally settled the row over the future financing of three accounting standard-setters, including the IFRS Foundation
At the trilogue discussions that are currently taking place, agreement was reached between the European Parliament (EP), the European Commission (EC) and the Council of Ministers to contribute an annual €4.3m (£2.63m) to the Foundation, which oversees the work of the International Accounting Standards Board, for the next six years.
They also agreed to give the Public Interest Oversight Board €0.3m (£249,000) annually until 2020 and €3.4m (£2.82m) a year to the European Financial Reporting Advisory Group until 2016.
Welcoming the decision, Commissioner Michel Barnier said, “The harmonisation of financial reporting and auditing rules at global level is essential for the sake of transparency, comparability and the smooth functioning of the global capital markets and an integrated market for financial services in the EU.
“This agreement to renew the financing programme of the IFRS Foundation, the EFRAG and the PIOB is a very important step towards ensuring that these organisations continue to play an important role in the development of accounting and auditing standards and that the EU’s interests are properly taken into account in that process.”
The row broke out over demands by some MEPs – including UK MEP Sayed Kamall – that international financial reporting standards should be rewritten to comply with European laws and reflect economic reality, rather than concepts, in companies’ financial statements.
The MEPs wanted to introduce funding contingent on an annual assessment to see whether the three bodies were complying.
However, in today’s statement, Barnier gave his strong backing to the bodies and stressed that their co-financing by the EU was vital to ensure that the Union’s interests were “properly taken into account in that process”.
“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 to be able to carry out their public interest mission on a long-term basis.”
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