European Parliament backs Commission proposal for the IFRS, the EFRAG and the PIOB
The European Parliament has today backed the European Commission’s proposal on co-financing the IFRS Foundation, EFRAG and the PIOB, three organisations that play a key role in the development of accounting and auditing standards.
Internal Market and Services Commissioner Michel Barnier said “High-quality, international financial reporting and auditing rules are of vital importance not only for transparency, comparability and the smooth functioning of capital markets, but also for the economy at large. The support of the European Parliament to renew the financing programme of the IFRS Foundation, EFRAG and the PIOB is an important step towards ensuring that these organisations continue to play a key role in the development of accounting and auditing standards and that the EU’s interests are properly taken into account in that process”.
Main elements of the Regulation:
The regulation will form the legal basis for the continuation of financing the International Financial Reporting Standards (IFRS) Foundation1 and the Public Interest Oversight Board (PIOB) for the period 2014-2020 and the European Financial Reporting Advisory Group (EFRAG) for the period 2014-2016.
In financial terms, the regulation proposes to contribute annually approximately 4.3 million euro to the IFRS Foundation (17% of its budget), 3.4 million euro to EFRAG (43% of its budget) and 0.3 million euro to PIOB (22% of its budget). The current EU financing programme for these beneficiaries was established in 2009 and will expire at the end of 2013. Consequently, it is important to formally adopt the proposed regulation as soon as possible to ensure the continuity of co-financing of these organisations by the EU.
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 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.
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