INTERNATIONAL TROPICALTIMBER COUNCILCOMMITTEE ON
FINANCE AND ADMINISTRATION

THIRTY-EIGHTH SESSION
13-17 November 2023
Pattaya, Thailand

FINANCIAL REPORTS PREPARED IN ACCORDANCE WITH
ITTO FINANCIAL RULES AND PROCEDURES (ANNEX 4)(Item 8 of the Provisional Agenda)

This document contains the following separate reports:
Page
A.
B.

Executive Summary of ITTO’s Financial Statements for the year ended 31 December 2022
prepared by the ITTO Management ...........................................................................................

i

ITTO’s Financial Statements for the year ended 31 December 2022
audited by the Independent Auditors ..........................................................................................

1

CFA(XXXVIII)/6
Page i

Executive Summary of ITTO’s Financial Statements
for the year ended 31 December 2022

prepared by the ITTO ManagementCFA(XXXVIII)/6
Page ii

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Page iii

Executive summary
1. The audited financial statements provide information on the financial position and performance of theInternational Tropical Timber Organization (ITTO) for the fiscal year ended 31 December 2022 (FY2022).
2. For ITTO’s project accounts in FY2022, new voluntary contribution pledges of $4.0 million were announced
at the 58th Session of the International Tropical Timber Council, and total project cost expenses during this period
were $4.5 million for projects mostly funded prior to FY2022. Total Administrative Account assessed contribution
revenues were $7.1 million, of which $1.8 million was not received during FY2022 and was accounted for as
assessed contributions receivable (arrears). Actual costs for the FY2022 Administrative Account budget were $5.0
million, therefore creating a cash surplus of $0.3 million for the Administrative Account budget for the year. The
International Tropical Timber Council (ITTC) adopted Decision 3(LVII), in November 2022 to further improvethe management of the Administrative Budget by revising the Financial Rules and Regulations to allow ITTO toutilize an amount not exceeding 15% of the budget from the Working Capital Reserve (WCR) to meet any shortfallof funds to implement the work programme of the Organization, as long as expenditures stay within the specified
annual budget, as well as allow the use of arrear payments and surpluses within the same financial biennium. The
same Decision also extended for one year the mandate of the virtual intersessional group established in 2022 madeup of producer and consumer members to make recommendations on threshold for use of the WCR, ways to prompt
members to pay assessed contributions, and ways to adapt the budget to the long-term trends in payment ofcontributions, which will be reported at the 59th Council Session.
3. The ITTC adopted Decision 5(LIV) at its 54th Session in November 2018 to enhance the financing architectureand fundraising of the Organization. In accordance with operative paragraph 8 of that decision, the Secretariat isincluding here the revenue and direct and indirect costs associated with implementing the pilot of “an additional
fundraising approach focused on pro-active development of proposals with potential sources of funding and/or
participate in tenders which address/contribute to the objectives of the International Tropical Timber Agreement(ITTA) and the strategic priorities of the Organization, taking into consideration the need for transparency, andopportunities for member engagement”.
Required financial disclosures in accordance with Decision 5(LIV)(United States dollars)(United States dollars )Pledges associated with implementing the pilot

2022

Costs associated with implementing the pilot

Pledge by China for PP-A/53-323 "Building Legal and Sustainable Forest
Product Supply Chains (LSSC)"

83,000Costs charged to the Administrative Budget

Pledge by China, Macao SAR for PP-A/53-323F "Supporting theEstablishment and Operation of the Global Timber Index Platform for
Building Legal and Sustainable Forest Products Supply Chains"
Pledge by China, Macao SAR for PP-A/53-323G "Supporting Pilot
Collaborative Operation of the Blockchain-based Timber Traceability
System (BTTS) for Building Legal and Sustainable Forest Products
Supply Chains"
PD 926/22 Rev.1 (I) Promotion of Sustanable Domestic Consumptionof Wood Products in Thailand
PD 928/22 Rev.1(I) Development of Sustainable Domestic Market for
Wood Products (Indonesia)
PP-A/53-323H Preparing policy brief on the outcomes of sustainable
wood use (SWU) projects in Southeast Asia
Pledge by Australia for CN-1523 "Development of an Information
System on the Potential for Wood and Carbon to support Sustainbale
Forest Management in South Kalimantan (Indonesia)"
Pledge by Korea for CN-21005 "Repositioning of forest management ascompetitive land use in the agroforestry landscape of the North Huetar
Region of Costa Rica"
Pledge by Australia and USA for CN-21007 "Strengthening themanagement and conservation for endangered rosewood (Dalbergia) in
Vietnam"Pledge by USA for CN-21009 "Strengthening and consolidating thenational process for controlling illegal loggining and associated trade in
Cameroon"
Pledge by Korea for CN-22014 "Assessment of Planting Caoba
Experiences (Swietenia Macrophylla) in the Coastal Region of Peru inContribtuion to the Climate Change Adaptation"

986,720

Sub-total

Pledges in ITTC Decision 1(LVII) associated with implementing thepilot

Total Pledges

Staff Time *347,200

2022

250,000
250,000

Costs charged to the Working Capital Reserve in accordance withDecision 9(LIII) and Decision5(LIV)

320,000

Development of Concept Note Database

4,856

261,811

Consultancies
Travel
Sub-total

5,925
24,41435,195

Total Costs

285,195

15,00083,300138,370

149,000

120,000

85,0002,589,401* Estimated based on time spent on brainstorming, meetings and implementing fundraising initiatives
as well as time spent on implementing the resulting activities not explicitly budgeted for in those
activities.

CFA(XXXVIII)/6
Page iv
4. The 2022 financial statements have, for the seventh successive year, been prepared based on the International
Public Sector Accounting Standards (IPSAS) and in accordance with the Financial Rules and Procedures adopted
by the ITTC, disclosing additional information on actual assets and liabilities and enabling the improved
management of ITTO’s resources and internal control. Highlights include:
i. The surplus for the FY2022 Statement of Financial Performance was $1.6 million mainly due todifferences in the timing of recognizing revenue and expenses (e.g. the entire Administrative Budget
is recognized as revenue in the year that the assessments are due. However, only expenses incurred
during the same year are recognized as expenses from that year’s budget), and reduced personnel costs
due to a number of vacancies.
ii. Project expenses increased by $0.5 million between 2021 and 2022. This was mainly due to the impactof the COVID-19 pandemic lessening and projects making more progress in 2022 compared to theprevious year.

5. ITTO is committed to enhancing its solid foundation for transparent and effective financial management andreporting. In addition to the best practices for internal control previously implemented under the Financial Rules
adopted in 2016 and further revised in 2019 and 2020 with a new project audit framework, the ITTC officiallyadopted a compendium of policy documents (CFA(XXXVII)/8) which strengthens governance and brings ITTO
into greater alignment with the accreditation criteria of certain multilateral donor funds. ITTO will continue to
implement and strengthen its internal controls and accountability measures by proactively evaluating andimproving its systems where appropriate by adopting best practices from organizations that are similar in nature.
Simultaneously, the Council will play a crucial role as the governing body, receiving regular reports of theOrganization’s finances and providing oversight of these.

CFA(XXXVIII)/6
Page 1

ITTO’s Financial Statements
for the year ended 31 December 2022

audited by the Independent Auditors

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Page 2

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Page 3

Contents
ChapterI.

Page

Report of the Independent Auditors on the financial statements: audit opinion . . . . . . . . . . . .

5

II. Financial statements for the year ended 31 December 2022 . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

I.

Statement of financial position as at 31 December . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

7

II.

Statement of financial performance for the year ended 31 December . . . . . . . . . . . . . . . .

8III. Statement of changes in net assets for the year ended 31 December. . . . . . . . . . . . . . . . .

9

IV. Statement of cash flows for the year ended 31 December . . . . . . . . . . . . . . . . . . . . . . . . .

10V.

Statement of comparison of budget to actual amounts for the year ended 31 December . .

11

VI. Notes to the 2022 financial statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . .

12

CFA(XXXVIII)/6
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CFA(XXXVIII)/6
Page 5Chapter 1

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Page 7

Chapter II
Financial statements for the year ended 31 December 2022
International Tropical Timber Organization
I. Statement of financial position as at 31 December(United States dollars)

Note

31 December 2022

31 December 2021

Cash and cash equivalents

6, 28

17,925,090

18,278,014

Investments
Assessed and voluntary contributions receivable, net
Other accounts receivable, net
Advance transfers - Projects
Advance transfers - Others
Total current assets

7

6,033,819
49,502
1,154,682
137,61125,300,705

5,084,427
61,305
1,105,747
268,150
24,797,642

115,225
1,366

177,726
4,107

116,591

181,832

25,417,296

24,979,474

66,025
1,558,696
1,630,379

8,941
1,529,404
890,165

AssetsCurrent assets

8, 27, 28
8, 27, 28
910

Non-current assets
Property and equipment
Intangible assets

11

Other assets
Total non-current assets

13

12

Total assets
Liabilities
Current liabilities
Accounts payable - Members
Voluntary contributions advance receipts - allocatedVoluntary contributions advance receipts - unallocated14, 27, 28

Assessed contributions advance receipts
Other liabilities
Total current liabilities
Non-current liabilities17
18, 27, 28

349,459764,392
4,368,951

325,247
728,839
3,482,595

Voluntary contributions advance receipts - allocated15

6,985,396

9,033,527

Other liabilities
Total non-current liabilities
Total liabilities
Net of total assets and total liabilities
Net assets

18, 27, 28

1,080,481
8,065,876
12,434,827
12,982,468

1,121,255
10,154,782
13,637,377
11,342,097

Accumulated surplus - Restricted
Accumulated surplus - Unrestricted
Reserves
Total net assets

19

8,535,240
1,947,228
2,500,000
12,982,468

7,043,563
1,798,534
2,500,000
11,342,097

15
16

19
19

The accompanying notes are an integral part of the financial statements.

CFA(XXXVIII)/6
Page 8International Tropical Timber Organization
II. Statement of financial performance for the year ended 31 December(United States dollars)

Note

2022

2021

Assessed contributions

20

7,064,768

7,104,313

Host country contributions20

1,182,441

977,884

Financial revenue

21

810

724

Other income

22

41,852

1,189

Member States voluntary contributions

20

4,321,392

3,845,506

Other voluntary contributions

20

-

-

Programme support Revenue

20

546,360

398,614

Revenue
Administrative AccountProject Accounts

Expost evaluation Revenue

20

93,80530,950Financial revenue

21

976

957

Other income

22

Total revenue--

13,252,404

12,360,137

Expenses
Administrative AccountEmployee benefits

23

3,919,507

4,833,641

Operating expenses

24

1,993,344

1,933,913

Project Accounts
Project expenses

25

4,500,351

3,964,657

Depreciation and amortization

11, 12Other expenses

26

69,3401,129,491

71,269561,179

Total expenses

11,612,033

11,364,658

Surplus/(deficit) for the year

1,640,371

995,479

The accompanying notes are an integral part of the financial statements.

CFA(XXXVIII)/6
Page 9International Tropical Timber Organization
III. Statement of changes in net assets for the year ended 31 December(United States dollars)

Restrictedaccumulated
surplus

Unrestrictedaccumulated
surplusReserves

Total

6,279,329

1,567,289

2,500,000

10,346,618

764,234

231,245-995,479

Net assets as at 31 December 2021 (Note 19)

7,043,563

1,798,534

2,500,000

11,342,097

Result of the accounting period

1,491,678

148,694-

1,640,371

Net assets as at 31 December 2022 (Note 19)

8,535,240

1,947,228

2,500,000

12,982,468

Net assets as at 31 December 2020
Result of the accounting period

The accompanying notes are an integral part of the financial statements.

CFA(XXXVIII)/6
Page 10

International Tropical Timber Organization
IV. Statement of cash flows for the year ended 31 December(United States dollars)

2022

2021

1,640,371

995,479

Increase/(decrease) in allowance for doubtful receivables

754,877

356,053

Depreciation and amortization
Unrealized (gain)/loss on foreign exchange

69,340377,184

71,269173,878(1,157,702)(536,353)(546,568)
11,803225,860(61,073)(Increase)/decrease in Advance transfers - Others(48,934)
130,538(334,911)(32,217)

Changes in liabilities(Decrease)/increase in Accounts payable - Members(Decrease)/increase in Other liabilities

57,084
27,139(56,192)
42,735(2,018,839)
740,214
24,212(876,986)
30,699(117,300)

Net cash flows from operating activities
Cash flows from investing activities

60,720(119,059)

Purchases of property and equipment
Purchases of intangible assets
Net cash flows from investing activities(4,099)-(46,705)-(4,099)(46,705)

Net proceeds from/(payment of) finance lease liabilities
Net cash flows from financing activities(32,361)(32,361)(40,429)(40,429)

Effect of exchange rate changes on cash and cash equivalents
Net (decrease) in cash and cash equivalents(377,184)(352,923)(173,878)(380,071)

Cash and cash equivalents — beginning of year (Note 6)
Cash and cash equivalents — end of year (Note 6)

18,278,014
17,925,090

18,658,085
18,278,014

Cash flows from operating activities
Surplus/(deficit) for the year
Adjustments to reconcile deficit/surplus to net cash flows

Changes in assets(Increase)/decrease in Assessed contributions receivable(Increase)/decrease in Voluntary contributions receivable(Increase)/decrease in Other accounts receivable(Increase)/decrease in Advance transfers - Projects(Decrease)/increase in Voluntary contributions advance receipts - allocated(Decrease)/increase in Voluntary contributions advance receipts - unallocated(Decrease)/increase in Assessed contributions advanceCash flows from financing activities

The accompanying notes are an integral part of the financial statements.

CFA(XXXVIII)/6
Page 11

International Tropical Timber Organization
V. Statement of comparison of budget to actual amounts for the year ended 31 December 2022
(United States dollars)

Original
BudgetActual oncomparable
basis (Note 5)

Final
BudgetDifference
between final
and actual

Receipts
Assessed contributions (Notes 8 and 20)

7,064,768

7,064,768

5,344,848

1,719,920

Host country contributions (Note 20)

1,365,392

1,365,392

1,182,441

182,9518,430,160

8,430,160

6,527,289

1,902,871

Total receipts
Expenditures
Basic administrative costs

4,122,534

4,122,534

2,904,631

1,217,903

Installation costs

Salaries and benefits

123,300

123,300-

123,300

Official travel

154,651

154,651

73,04881,603Social security

964,577964,577

840,416

124,161

Special activities

52,32752,327-52,327

Data processing

144,644

144,644

99,23445,410

Other costs

360,830

360,830

218,426

142,404

Council meetings

208,457

208,457

193,692

14,765

6,131,320

6,131,320

4,329,445

1,801,875

Communication andoutreach

435,000

435,000

283,399

151,601

Expert meetings byCouncil

110,000

110,000

44,68365,317----

Statistics, studies &information

265,000

265,000

259,6505,350

Annual report &biennial review

90,00090,00080,5209,480

Subtotal, core operational costs

900,000

900,000

668,252

231,748

Subtotal, administrative budget

7,031,320

7,031,320

4,997,697

2,033,623

Costs met by Japan (including tax refund)

1,365,392

1,365,392

1,182,441

182,951

8,396,712

8,396,712

6,180,138

2,216,574

33,44833,448347,151-

Subtotal, basic administative costs
Core operational costs

Policy work

Total expenditures
Net total

The accompanying notes are an integral part of the financial statements.

CFA(XXXVIII)/6
Page 12International Tropical Timber Organization
VI. Notes to the 2022 financial statements
Note 1
Reporting entity
1.
The International Tropical Timber Organization (ITTO) was establishedpursuant to the International Tropical Timber Agreement, 1983, as a non-profit
intergovernmental entity with its headquarters in Yokohama, Japan, and continues tooperate from this location. The Agreement was succeeded by the International
Tropical Timber Agreement, 1994 and 2006 (“the Agreement”).
2.
The objectives of the Organization are laid down in Article 1 of the Agreement
and include the provision of a consultative forum for producing and consuming
members on all aspects of the world timber economy; promotion of the expansion,
diversification, and structural improvement of the international tropical timber trade
together with more transparency and better distribution; the encouragement ofreforestation and other forest management activities; promotion of further processingof tropical timber in the producing countries, with research and development as wellas technology transfer to support both of these goals; and support for development of
national policies in sustainable utilization and conservation of tropical forests, withspecial regard for ecological balance and genetic resources.
3.
ITTO's governing body is the International Tropical Timber Council, which
comprises all the Organization's members. The Council adopts such rules andregulations as are necessary to carry out the provisions of the Agreement. The Council
is also responsible for the approval of ITTO’s financial statements.
4.
The financial statements include only the operations of ITTO. ITTO has no
subsidiaries or interests in associates or jointly controlled entities.
Note 2
Statement of approval of the Executive Director
ITTO’s financial statements have been prepared in accordance with the International
Public Sector Accounting Standards (IPSAS). The financial statements wereauthorised for issue by the Executive Director on 23 June 2023, and will be submitted
to the International Tropical Timber Council (ITTC) for approval at the next annual
Council Session.
Note 3Basis of preparation
A.

Basis of measurement

5.
The financial statements have been prepared on a full-accrual method of
accounting under International Public Sector Accounting Standards (IPSAS). The
accounting policies have been applied consistently throughout the reporting period.
ITTO applies the historical cost principle.
6.
These financial statements are expressed in United States dollars rounded to thenearest whole number, unless otherwise indicated.

CFA(XXXVIII)/6
Page 13

B.

Foreign currency translation

Functional and presentation currency
7.
Items included in the financial statements are measured using the currency ofthe primary economic environment in which an entity operates (“the functional
currency”). The functional and presentation currency of ITTO is the United States
dollar.
Transactions and balances
8.
Foreign currency transactions are translated into United States dollars at theprevailing United Nations operational rate of exchange at the time of the transaction.
The United Nations rates approximate market rates. Monetary assets and liabilities
denominated in foreign currencies are revalued at the exchange rate in effect at thereporting date. Non-monetary items in foreign currencies that are measured athistorical cost are translated using the exchange rate at the date of the transaction.
Foreign currency differences arising upon revaluation are recognized in the statementof financial performance and included under gains and losses.
C.

Use of estimates and critical judgments

9.
The preparation of financial statements in accordance with IPSAS requires ITTO
management to make judgments, estimates and assumptions that affect the applicationof accounting policies and the reported amounts of assets, liabilities, revenue andexpenses. Since uncertainty is inherent in the use of estimates and assumptions, actual
results may differ significantly from management estimates.
10. Estimates and underlying assumptions are reviewed on an ongoing basis.
Revisions to accounting estimates are recognized in the period in which the estimates
are revised and in any future period affected. Examples of estimates include: valuationand impairment of investments; collectability of receivables; provisions andadjustments of advance receipts; accrued liabilities for employee benefits; recognitionof project expenses; and contingencies.
11. Information about critical judgments in applying accounting policies that havethe most significant effect on the amounts recognized in the financial statements andwhich could have a significant risk of resulting in a material adjustment is includedin the following notes:(a) Investments (Note 7) and receivables (Note 8) valuation：if there is
objective evidence that an impairment loss has been incurred, the amount of the loss
is measured as the difference between the asset’s carrying amount and the present
value of estimated future cash flows. The amount of the loss is recognized in thestatement of financial performance.
(b) Note 8, Contributions receivable and other receivables, and note 20,
Revenue from contributions are defined in IPSAS 23: Revenue from non-exchangetransactions (taxes and transfers). Where non-exchange transactions are deemed toinclude conditions, IPSAS 23 requires that a liability be recognized until such timethat the condition is satisfied, at which time revenue may be recorded. The
determination of the existence of conditions for non-exchange transactions requires
reasonable professional judgment. Many ITTO contribution agreements with donors
include general stipulations; for those that include conditions, deferred revenue isrecognized (advance receipts);

CFA(XXXVIII)/6
Page 14(c) Project expenses (Note 25) incurred by the executing agencies arerecognized based on the audit reports of the projects. When those audit reports could
not be obtained for the reporting year, an estimation has been built based on theavailable reports. When no contradictory information is available, it is the best
estimate of the management that the costs are spend by the executing agencies on astraight line basis.
(d) Note 31, Contingencies: legal proceedings covering a wide range ofmatters are or may be pending or threatened in various jurisdictions against ITTO.
12. Provisions are recorded for pending matters when an entity has a present
obligation (legal or constructive) as a result of a past event; it is probable that an
outflow of resources embodying economic benefits or service potential will be
required to settle the obligation; and a reliable estimate can be made of the amount of
the obligation. Owing to the inherently uncertain nature of the matters, the ultimate
outcome or actual cost of settlement may materially vary from estimates.
D.

Future accounting changes

13. The IPSAS Board has published IPSAS 41: Financial Instruments. IPSAS 41
sets out requirements for recognition and measurement of financial instruments,
including impairment, derecognition and general hedge accounting and is effectivefrom 1 January 2023. IPSAS 42: Social Benefits has also been published by the
IPSAS Board and is effective from 1 January 2023. IPSAS 42 aims to help users of
the financial statements and general purpose financial reports assess the nature ofsocial benefits provided by the entity, the features of the operation of social benefit
schemes; and the impact of social benefits on the entity’s financial performance,
financial position and cash flows. Furthermore, IPSAS 43: Leases, IPSAS 44 Noncurrent Assets Held for Sale and Discontinued Operations, IPSAS 45 Property, Plant,
and Equipment and IPSAS 46 Measurement will be effective from 1 January 2025 and
IPSAS 47 Revenue and IPSAS 48 Transfer Expenses will be effective from 1 January
2026. ITTO is currently in the process of assessing the impact of these new IPSASs.
Note 4Significant accounting policies
Financial assets
14. The designation of financial assets depends on the purpose for which thefinancial assets are acquired and is determined at initial recognition. All financial
assets of ITTO that have a residual value are categorized as loans and receivables.
Major financial asset typeClassification

Contributions and other accounts receivable

Loans and receivables

Other assets

Loans and receivables

15. Contributions and other accounts receivables are recognized initially on the datethat they originated. All other financial assets are recognized initially on the tradedate, which is the date ITTO becomes a party to the contractual provisions of the
instrument. All financial assets are initially measured at fair value.

CFA(XXXVIII)/6
Page 15Loans and receivables
16. Loans and receivables are financial assets with fixed or determinable paymentsthat are not quoted in an active market. Subsequent to initial recognition, loans andreceivables are measured at amortized cost using the effective interest method, lessany impairment loss.
17. Loans and receivables are included in current assets, except for those withmaturities greater than 12 months after the end of the reporting period. Such loans andreceivables are classified as non-current assets.
18. Unused transfers of cash assistance due from executing agencies represent theclaims to the unused cash assistance funds remaining with executing agencies after
the completion or termination of a project. They are recorded as “other receivables”
and are recovered from executing agencies.
19. Cash generating assets and non-cash generating assets are distinguished basedon whether those assets bring revenue from exchange transactions or not. As ITTO
only generates non-exchange transactions revenue, all assets are considered non-cash
generating assets.
Impairment of financial assets — assets carried at amortized cost
20. At the end of each reporting period, ITTO assesses whether there is objective
evidence that a financial asset or a group of financial assets is impaired. ITTO
considers impairment of financial assets at a specific asset level.
21. A financial asset or a group of financial assets is impaired and impairment loss
is incurred only if there is objective evidence of impairment as a result of one or more
events that occurred after the initial recognition of the asset (a “loss event”) and thatloss event has an impact on the estimated future cash flows of the financial asset orgroup of financial assets that can be reliably estimated. No collective impairment ismade.
22. The amount of the loss is measured as the difference between the carrying
amount of the asset and the estimated recoverable amount. The carrying amount of
the asset is reduced and the amount of the loss is recognized in the statement offinancial performance and reflected in an allowance account in the statement offinancial position.
23. If, in a subsequent period, the amount of the impairment loss decreases and thedecrease can be related objectively to an event occurring after the impairment wasrecognized (such as receipt of funds), the reversal of the previously recognizedimpairment loss is recognized in the statement of financial performance. Off-settingof the impairment is done when there is no legal possibility that the corresponding
asset would be recovered.
24. Receivables relate to contractual amounts agreed to be paid by governments andintragovernmental organizations.
Advances to executing agencies

CFA(XXXVIII)/6
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25. Projects prepaid expenses represent transfers of cash where executing agencies
have not yet met performance obligations as specified by ITTO. ITTO monitors theutilization of cash by executing agencies and recognizes expenses only when those
funds have been used by executing agencies as specified by ITTO.
26. Reporting by executing agencies of the utilization of advances is due usually
every six months. Where an executing agency fails to report on the utilization of theadvance, or breaches the performance obligation, those amounts, as well as any
unused funds, are followed up by ITTO with the executing agency.
Property and equipment
27. Property and equipment is stated at cost, less accumulated depreciation andaccumulated impairment losses. This includes costs that are directly attributable tothe acquisition of assets and the initial estimate of dismantling and site restoration
costs.
28. Subsequent costs are included in an asset’s carrying amount or recognized as aseparate asset only when it is probable that future economic benefits associated with
the item will flow to ITTO and the cost of the item can be measured reliably. Repairs
and maintenance, which do not qualify for capitalization, are charged to surplus ordeficit in the period during which they are incurred.
29. Estimated useful lives are as follows:
Property and equipment class

Useful life

Buildings

Shorter of term of arrangement and useful life of building

Furniture and fixtures

10 years

Vehicles6 years

Office equipment

5 years

Communications and information
technology (IT) equipment

4 years

30. The gain or loss arising from the disposal or retirement of an item of property or
equipment is the difference between the sale proceeds and the carrying amount of theasset, and is recognized in other revenue or expenses within surplus or deficit.
31. Depreciation of property and equipment is recognized in surplus or deficit on astraight-line basis over the estimated useful lives of the related assets.
Intangible assets
32. Separately acquired intangible assets (e.g. software and rights) and internallydeveloped software are stated at cost, less accumulated amortization and accumulated
impairment losses. ITTO does not have any intangible assets with indefinite lives.
33. Amortization of intangible assets is recognized in surplus or deficit on a straightline basis over the estimated useful lives of the related assets. Software is amortizedCFA(XXXVIII)/6
Page 17

over periods ranging from 3 to 10 years. Other rights and licences are amortized overthe shorter of the licence or rights period and 2 to 6 years.
Leases
34. ITTO leases certain property and equipment. Leases of property and equipment
where ITTO substantially assumes all the risks and rewards of ownership areclassified as finance leases. Initial recognition of a finance lease results in an asset
and liability being recognized at the lower of the fair value of the leased property andthe present value of the minimum lease payments.
35. Subsequent to initial recognition, leased assets are depreciated over the shorter ofthe lease term and their useful lives in accordance with the accounting policies forproperty and equipment.
36. Each finance lease payment is allocated between the finance lease liability andfinance charges. The interest portion of the finance lease obligations is recognized as
an expense in the statement of financial performance over the term of the lease inorder to produce a constant periodic rate of interest on the remaining balance of theliability for each period. The corresponding rental obligations, net of finance charges,
are included in other liabilities.
37. Leases in which a significant portion of the risks and rewards of ownership are
retained by the lessor are classified as operating leases. Payments under operatingleases (net of incentives received from the lessor, if any) are recognized on a straightline basis under other expenses in the statement of financial performance over theperiod of the lease.
Impairment of non-cash generating assets
38. Property and equipment and intangible assets are reviewed for impairment at eachreporting date. Certain events or changes in circumstances may indicate that therecoverability of the carrying amount of such assets should be assessed, including any
significant decrease in market value. An impairment loss is recognized in otherexpenses within the statement of financial performance when the carrying amount ofan asset exceeds its recoverable service amount. The recoverable service amount ofan asset is the higher of the asset’s fair value, less costs to sell, and its value in use.
In assessing value in use, ITTO uses a variety of methodologies in accordance withIPSAS 21, depending on the availability of data and the nature of impairment,
including a depreciated replacement cost approach, a restoration cost approach and aservice units approach.
39. Impairment losses recognized in prior periods are assessed at each reporting date
for any indication that the impairment value has decreased or no longer exists. An
impairment deficit from previous years is reversed only to the extent that the asset’s
carrying amount does not exceed the carrying amount that would have existed, net of
depreciation or amortization, if no impairment deficit had been recognized.

CFA(XXXVIII)/6
Page 18

Financial liabilities
40. Other financial liabilities are initially recognized at fair value, less transaction
costs, and subsequently measured at amortized cost using the effective interest
method.
Major financial liability typeClassification

Accounts payable

Other financial liabilities

Other liabilities

Other financial liabilities

41. Accounts payable and accruals arising from the purchase of goods and services
are recognized when supplies are delivered or services consumed. Liabilities arestated at the invoice amounts, less the payment discounts if eligible at the reporting
date. Where invoices are not available at the reporting date, the liability is estimatedand recorded. Financial liabilities measured at amortized cost, due within 12 monthsof the date of the statement of financial position, are classified as current liabilities.
Otherwise, they are classified as non-current liabilities.
42. There was no discounting of advance receipts by donors as the impact isconsidered as not material. The amounts paid to executing agencies are always thecontribution amount received from the donors, hence the financial risks on theadvance receipts are considered remote.
Employee benefits
43.

ITTO recognizes the following categories of employee benefits:(a)Short-term employee benefits;(b)Post-employment benefits;(c)Other long-term employee benefits;(d)Termination benefits.

Short-term employee benefits
44. Short-term employee benefits are those that are due to be settled within
12 months after the end of the period during which employees have provided related
services. These benefits include wages and salaries, compensated absences (such as
paid leave and annual leave) and other benefits, including medical care and housing
subsidies. An expense is recognized when a staff member provides services inexchange for employee benefits. A liability is reported for any entitlement that has notbeen settled as at the reporting date and represents the amount expected to be paid tosettle the liability. Owing to the short-term nature of such entitlements, the liability is
not discounted for the time value of money.
Post-employment benefits
45. Post-employment benefits are those payable after completion of or separationfrom employment, excluding termination payments.

CFA(XXXVIII)/6
Page 19

46. All staff of ITTO participate in a provident fund as their pension plan, which
was established by the Staff Regulations and Rules to provide retirement related
benefits to employees. Contributions to the provident fund which are payable monthly
are set at the percentage rates defined by the United Nations Joint Staff Pension Fund(UNJSPF). Therefore, the provident fund is classified as a defined-contribution planin line with the requirements of IPSAS 25: Employee benefits. ITTO’s contributions
to the plan during the financial period are recognized as expenses in the statement offinancial performance.
Other long-term employee benefits
47. Other long-term employee benefits obligations are those that are not due to besettled within 12 months after the end of the period in which employees provide therelated service. These benefits comprise home leave, annual leave and repatriation
grant. The discounting of those obligations was considered not material considering
the amount of the current obligations.
Termination benefits
48. Termination benefits are recognized as an expense only when ITTO isdemonstrably committed, without realistic possibility of withdrawal, to a formal
detailed plan to either terminate the employment of a staff member before the normal
retirement date. No termination benefit was recognized at the beginning nor the endof the reporting period.
Provisions
49. A provision is recognized if, as a result of a past event, ITTO has a present legal
or constructive obligation that can be estimated reliably, and if it is probable that an
outflow of economic benefits will be required to settle the obligation. Provisions aremeasured at the present value of the expenditures expected to be required to settle theobligation using a rate that reflects current market assessments of the time value ofmoney and the risks specific to the obligation. Where the provision is expected to besettled beyond the next 12 months, the increase in the provision due to the passage oftime is recognized as interest expense. When an outflow is dependent upon a future
event that is not certain to occur, or cannot be reliably estimated, a disclosure
regarding the contingent liability is made in the notes to the financial statements.
50. A provision for the return of unused funds to donors is reported for unusedbalances related to projects that have expired at year-end where the donor agreement
requires unused funds to be returned and where it is probable that funds will be
returned as opposed to being reallocated. Where the donor has not disbursed all the
cash to ITTO, the receivable balance is written down to the present value of estimatedfuture cash flows (excluding future credit losses that have not been incurred). A
provision for returns of unused funds is reported only if there are funds to be returned
after the receivable has been fully written down. The effects of changes resulting fromrevisions to the timing or the amount of the original estimate of the provision arereflected on a prospective basis. The expense arising from reporting a provision (orreducing any receivable) for unused funds is presented in the statement of financial
performance.

CFA(XXXVIII)/6
Page 20

Revenue recognition
Assessed contributions
51. Assessed contributions are non-exchange transactions, which means that
resources (such as cash, items of property and equipment or enforceable rights tosuch) are received by ITTO with no or nominal consideration provided directly inreturn to the donor. The resources are to be applied towards advancing theOrganization’s mission.
52. Assessed contributions are determined during the Council session of the year
preceding considering the budget of the Organization and the number of votes of eachmember.
53.

Assessed contributions are received from members.

54.

The fair value of assessed contributions is determined by the cash inflow.

55. Assessed contributions are recognized in the year of the budget it is meant tocover.
Voluntary contributions
56. Voluntary contributions are non-exchange transactions, which means that
resources (such as cash, items of property and equipment or enforceable rights tosuch) are received by ITTO with no or nominal consideration provided directly inreturn to the donor. The resources are to be applied towards advancing theOrganization’s mission.
57. Voluntary contributions are received from members, regional and international
financial institutions, the common fund for commodities, and other sources.
58.

The fair value of voluntary contributions is determined by the cash inflow.

59. Voluntary contributions may be subject to terms in a binding agreement imposed
upon the use of the resource (termed earmarked funds) or may be free of specific terms
allowing ITTO to direct such resources according to its mandate (termed unearmarkedfund). Earmarked funds may be subject to conditions where terms not only restrict theuse of resources, but also require the return of resources, if not used as specified.
60. With regard to unearmarked funds and earmarked funds with no conditions
attached, ITTO recognizes an asset (cash or receivable) and revenue at the earlier ofcash received or formal acknowledgement/agreement of the contribution to beprovided unless the agreement specifies a later contribution start date.
Examples of such funds with no conditions attached are:-Donors pledges to Thematic Programme funds-

Programme support recognized from donors pledges-

Donors pledges to Fellowship programme-

Projects’ ex-post budgets when the project is officially finishedCFA(XXXVIII)/6
Page 2161.

For earmarked contributions:(a) Where the agreement has a legislative clause, the receivable and related
revenue is not recorded until ITTO is notified of the legislative approval;(b) Where the agreement has a performance clause, the receivable and related
revenue is not recorded until the obligation is met.
62. For earmarked contributions with a condition attached, ITTO recognizes an asset(cash or receivable) and a liability (contributions advance receipts or deferred
revenue) at the earlier of cash received or formal written acknowledgement/agreementof the contribution to be provided (unless the contribution specifies a later start date).
The liability is reduced and revenue is recognized only when conditions have beensatisfied.
63. Revenue from voluntary contributions is shown net of realized gains and losses
on foreign exchange as ITTO does not assume the risk of foreign exchange on
contribution revenue.
Pledges
64. Pledges of contributions to ITTO may be received at any time but are most likely
to occur following donor meetings which are held annually. ITTO does not recognize
pledges as assets or revenue until they are enforceable at the earlier of written
confirmation of the pledge or receipt of funds. Once enforceable, the asset and related
revenue are recognized consistent with the revenue recognition policy for voluntary
contributions referred to above. Until that time, the pledges are disclosed ascontingent assets.
Contributions in kind
65. ITTO receives contributions of services and office space and other facilities
from the Host Government. These contributions, as well as in-kind contributions ofgoods, are initially measured and recorded at their fair value at the date of receipt. The
fair value of these non-monetary assets is determined by reference to observable market
values or by independent appraisal. The revenue and the corresponding expense arerecorded in the statement of financial performance as part of voluntary contributions.
Recognition of expenses
66. Expenses are recognized in the statement of financial performance in the period
to which they relate.
Transfers of cash assistance and programme supplies
67. In fulfilling its mandate, ITTO transfers cash to governments, non-governmentalorganizations and other third parties (“executing agencies”). Transfers of cash
assistance are initially reported as an advance on the statement of financial position
where there are performance obligations imposed on the executing agency, and are
expensed when ITTO is satisfied that those performance obligations are met. An
accrual against advances is recorded at year-end for expenses incurred by executing
agencies reported to but not processed by ITTO.
68. Project expenses incurred by the executing agencies are recognized based on theaudit reports of the projects. When those audit reports could not be obtained for the

CFA(XXXVIII)/6
Page 22reporting year, an estimation has been built based on the available reports. When nocontradictory information is available, it is the best estimate of the management thatthe costs are spend by the executing agencies on a straight line basis.
Commitments
69. Commitments are future expenses and liabilities to be incurred on contracts
outstanding at the reporting date for which ITTO has little, if any, discretion to avoid
in the ordinary course of operations, including:(a) Capital commitments represents the aggregate amount of capital
expenditures contracted for but not recognized as paid or provided for at the period-end;(b) Contracts for the supply of goods or services that ITTO is expecting to bedelivered in the ordinary course of operations;(c)Cash transfers;(d)Other non-cancellable commitments.

ITTO does not have any non-cancellable lease agreements.
Contingencies
Contingent assets
70. A contingent asset is a possible asset that is not wholly within the control of theorganization. Contingent assets are reviewed to ensure that developments areappropriately reflected in the financial statements. If it has become virtually certainthat an asset is no longer contingent and the asset’s value can be measured reliably,
the asset is recognized during the period in which the change occurs.
Contingent liabilities
71. A contingent liability is disclosed unless the possibility that it will be realized isremote. If it becomes probable that a contingent liability will be realized, a provision
is recorded during the period in which the change of probability occurs. A contingent
liability will also arise in cases where there are liabilities that cannot be measured
reliably.
Segment reporting
72. The ITTO governing body and management does not manage the organization
based on service segments or geographical segments.
Budget73. ITTO budgets, which are approved by the Council for each financial biennium,
permit expenditures to be incurred within the Administrative Account. ITTO hasclassified its budgets as: (a) basic administrative costs budgets; and (b) core
operational costs budgets.
74. The basic administrative costs budget includes costs such as salaries and benefits,
installation costs, and official travel. Costs met by Japan, which include officeequipment, council meetings, supporting staff and tax refund for Japanese taxation, arealso classified under the basic administrative costs. However, these costs are fullyCFA(XXXVIII)/6
Page 23

reimbursed by Japan and are not included in the total for the assessment of theadministrative budget.
75. The core operational costs budget includes costs such as those related tocommunication and outreach, expert meetings convened by the Council and preparationand publication of studies and assessments pursuant to articles 24, 27 and 28 of theAgreement.
76. An original budget is defined by IPSAS as “the initial approved budget for thebudget period”. The final budget is defined as:(a)

The original budget as defined above;(b)

All subsequent changes to the budget approved by the Council.

77. While ITTO’s financial statements are prepared under the IPSAS full-accrualbasis, ITTO budgets are prepared and managed on a modified cash basis. The mostsignificant differences are as follows:(a) The actual budget does not include revenue. Expenses for projects andactivities funded by voluntary contributions in the Project Accounts and expenses
deriving from other voluntary contributions in the Administrative Account are also
not included in the budget of ITTO. The difference is presented under “presentationdifferences” in the reconciliation between budget actuals and net cash flows;(b) Budget costs are recorded on a modified cash basis in contrast withexpenses in the financial statements that are prepared under the IPSAS full-accrualbasis. The difference is presented under “basis differences” under the “operating”
category in the reconciliation between budget actuals and net cash flows;(c) The budget does not include investing and financing activities. These arepresented under “basis differences” under the “investing” and “financing” categories
in the reconciliation between budget actuals and net cash flows. The amount of thebudget is based on estimated expenses.
Note 5Comparison to budget
Statement V documents the various budgets to the actual amounts incurred against
them. Both budgets and actual amounts (cash and budgetary commitments) arecalculated on the same modified cash basis.
The presentation of this statement includes the budget information for costs met by
Japan, which was included in the approved administrative budget for the 2022 and2023 financial biennium (CFA(XXXVI)/2 Rev.1, dated 3 December 2021).
Main comparisons of budget and actual amounts for costs met by Japan consist of
office, equipment, utilities ($505,778 budget vs $437,363 actual), council meetings($389,635 budget vs $425,468 actual), supporting staff ($89,940 budget vs $70,694
actual) and tax refund for Japanese taxation ($380,039 budget vs $248,916 actual),
respectively.
Explanations of material differences between the final budgets and actual amounts are
as follows.

CFA(XXXVIII)/6
Page 24(a) Assessed contributions amounting to approximately $1.7 million were notreceived overall during the reporting period, which had an influence on management’s
decision regarding budget spending.
(b) There were months where certain positions were vacant including theposition for the executive director, director and projects manager of division of forest
management, and director of operations during the reporting period, which impactedsalaries and benefits, and social security costs.
(c) There were no installation costs incurred in 2022 due to staff not being
hired during this period.
(d) Many official meetings were cancelled or held online in 2022 due to the
COVID-19 pandemic, which impacted the official travel costs.
(e) Costs met by Japan are paid directly or reimbursable by Japan based on
actual expenditures and the budget is based on actual expenditures from previous
years.
(f) The difference between the budget and total receipts $33,448 is due toAngola becoming a new member of the ITTA, 2006 on 7 July 2022 and being assessed
the same amount for 2022 in accordance with Council Document ITTC(LVIII)/9.

The net surplus between actual receipts and expenditures will be received by theWorking Capital Reserve in accordance with Financial Rules and Rules Relating to
Project of the ITTO, Rule 5.5.

CFA(XXXVIII)/6
Page 25

The following table presents the reconciliation of actual budget amounts on acomparable basis in the statement of comparison of budget to actual amounts and theamounts presented in the statement of cash flows.

(United States dollars)

Total actual amount on comparable basis
as presented in the budget and actuals
comparative statement
Basis differences

Exchange rate changes on cash and cash
equivalents
Presentation differences
Net cashflows from thestatement of cash flows

Operating

Investing

Financing

Exchange ratechanges2022(6,180,138)

-

-

-

(6,180,138)

177,469(4,099)(32,361)-

141,009---(377,184)(377,184)

6,063,389---

6,063,389

60,720(4,099)(32,361)(377,184)(352,923)

Note 6
Cash and cash equivalents
All cash in ITTO is at bank or on hand and convertible (freely exchanged to othercurrencies without licence or authorization).

Note 7
Investments
ITTO does not currently hold any investments. In accordance with CFA(XXXII)/8,
recommendation 9, investment of the Organization’s funds is suspended until at suchtime as the Council deems appropriate for ITTO to resume investing.

CFA(XXXVIII)/6
Page 26

Note 8
Accounts receivables
Assessed contributions: receivables from non-exchange transactions(United States dollars)

Administrative accountMember States

Allowance for
Total assessed
doubtful assessed
contributions contributions receivable
receivable
2,913,128(6,771,426)

Balance as of 31 December 2020

9,684,554

Assessed Contribution for 2021

7,104,313-

7,104,313

Receipt for 2021 Assessed Contributions(5,150,042)-(5,150,042)

Receipt for prior year Assessed Contributions(1,417,918)(1,417,918)-

Write-off---

Net Increase of Allowance for doubtful assessed contributions receivable-(356,053)(356,053)(7,127,479)

3,093,428

Balance as of 31 December 2021

Administrative accountBalance as of 31 December 2021
Assessed Contribution for 2022
Receipt for 2022 Assessed Contributions

10,220,907

Member States
10,220,907

Allowance for
Total assessed
doubtful assessed
contributions contributions receivable
receivable3,093,428(7,127,479)

7,064,768-

7,064,768(5,344,848)-(5,344,848)(562,218)

Receipt for prior year Assessed Contributions(562,218)-

Write-off(44,195)

44,195--(754,877)(754,877)

11,334,414(7,838,161)

3,496,253

Net Increase of Allowance for doubtful assessed contributions receivable
Balance as of 31 December 2022

Allowances for doubtful assessed contributions receivable amounting to $135,571.33
were reversed on 20 December 2022 due to Honduras making payments for its
assessed contributions corresponding to years 1989-1994 and 2020.

Host country contributions: receivables from non-exchange transactions(United States dollars)

Administrative accountMember States

Allowance for
doubtful hostcountry
contributions
receivable

Total host country
contributions
receivable

Balance as of 31 December 2020

-

-

‐

Claims--‐Cash-in
Balance as of 31 December 2021‐‐‐
425,468‐

Claims425,468-

Cash-in--‐

425,468‐

425,468

Balance as of 31 December 2022

CFA(XXXVIII)/6
Page 27

Voluntary contributions: receivables from non-exchange transactions(United States dollars)

Project accounts

DonorsAllowance for
Total voluntary
doubtful voluntary
contributions contributions receivable
receivable

Balance as of 31 December 2020

2,216,858-

2,216,858

Increases in Voluntary Contributions Receivalbes for 2021

3,642,802

3,642,802(3,686,994)
1,990,998

Allocation from Internal Funds(181,668)‐‐‐

Balance as of 31 December 2021

1,990,998-

4,097,208‐‐‐‐

Cash received in 2021 for Voluntary Contribtuions

Increases in Voluntary Contributions Receivables for 2022
Cash received in 2022 for Voluntary Contributions(3,686,994)(3,729,661)

Allocation from Internal Funds(246,448)

Balance as of 31 December 2022

2,112,098(181,668)
4,097,208(3,729,661)(246,448)
2,112,098

Breakdown of Increases in Voluntary Contributions Receivables

2022

2021

Pledges in ITTC Decision 1(LVIII) and (LVII) - Financing for Projects, PreProjects and Activities
China

83,000100,000

China, Macao SAR

1,333,920

-

Korea

53,064

1,109,958

Japan

1,662,511

848,389

Australia

305,204-

USA

534,000

555,000-

200,000

Bruno Manser Fonds
CITES Secretariat
City of Basel (Switzerland)
FAO
Kisso-an (Private)

25,000375,538-

200,000-

167,000

2,961

1,721

Precious Forests Foundation-

11,000

Soka Gakkai-

89,582

Unearmarked Fund-

89,254

Bali Partnership Fund (Sub-account B)-

26,8283,999,660

3,774,270

Total of Pledges in ITTC Decision 1(LVIII) and (LVII)- Financing for
Projects, Pre-Projects and Activities
Adjustments to pledges in Decision 1 not affecting Accounts Receivable

74,881

81,148Adjustments for items not recorded in Decision 1

22,667(212,616)

4,097,208

3,642,802

Total

CFA(XXXVIII)/6
Page 28(United States dollars)

Breakdown of Voluntary Contributions Cash Receipts

2022

2021

Australia

305,204-

China

83,000100,000

China, Macao SAR

533,568--

940,979

European Union
Finland5,247-

Germany

291,831363,838Japan

1,431,190

848,952

Korea

309,496351,461

USA

600,000

500,000

FAO

57,000177,848

CBD

10,000-CITES

100,107281,654

IUCN-

19,434

Kisso-an

3,018

2,248

Precious Forests Foundation-

11,000

Soka Gakkai-

89,582

3,729,661

3,686,994

Total(United States dollars)

Breakdown of Allocation from Internal Funds

2022

2021

USA's unallocated voluntary contributions advance receipts(66,000)(25,000)

Japan's unallocated voluntary contributions advance receipts

147,438(37,324)

Korea's unallocated voluntary contributions advance receipts

89,114-

Fellowship Pooled Fund (including refund to pool from cancelled Fellowship)

76,635

127,321

Programme Support

588

Unearmarked Fund

89,254

Bali Partnership Fund (Sub-account B)

26,828Adjustments to reclassification of internal funds
Total

1.

(739)

-

246,448

181,668

Receivables are earmarked when agreements specify terms for the use ofcontributions, such as the purpose, geographical area and period of use, andare unearmarked when contributions are free of specific terms, allowing
ITTO to direct such resources according to its mandate. Both earmarked
and unearmarked receivables are recorded when contribution agreements
become enforceable, which occurs at the date when the agreement is signed,
free of legislative/parliamentary approval clauses, or at the date whendonor’s notification of the amount to be disbursed to ITTO, when such aclause exists, is fulfilled. Ageing of receivables as well as the exposure tocredit and currency risks related to those receivables are disclosed in Note
28, Financial risk management.

CFA(XXXVIII)/6
Page 292.

The exposure of ITTO to credit and currency risks related to receivables aredisclosed in Note 28, Financial risk management.

Other accounts receivable
Other accounts receivable are mainly composed by amounts related to accounts
receivable from the Executing Agency and accrued interest.
Projects PD507/08 Rev.1(F), PD552/09 Rev.1(F), and PD764/14 Rev.3(F) wererecommended for termination at the 57th Council Session in November 2021. The
Council decided to officially terminate PD507/08 Rev.1(F), however, PD552/09
Rev.1(F) and PD764/14 Rev.3(F) were decided not to be terminated due to the
executing agencies submitting required audit reports prior to the Council Session.
Accordingly, the respective other accounts receivable and allowances recorded were
written-off for PD507/08 Rev.1(F) and reversed for PD552/09 Rev.1(F) and PD764/14
Rev.3(F).

CFA(XXXVIII)/6
Page 30

Note 9Advance transfers - Projects(United States dollars)

Category

2022

2021

Reforestation and Forest Management

211,235

183,118

Economics, Statistics and Market

297,070

37,422

Forest Industry

110,914

139,478

Activities
Total advance transfer by type535,463745,729

1,154,682

1,105,747

Reconciliation of advance transfer balances(United States dollars)

Advance transfer as at 31 December 2020

770,836

Expenses recognized through reports from EAs(2,400,976)

Advance transfers made in 2021

2,735,887

Reclassified to other receivables-

Advance transfers as at 31 December 2021

1,105,747

Expenses recognized through reports from EAs(2,487,224)

Advance transfers made in 2022

2,536,158

Reclassified to other receivables-

Advance transfers as at 31 December 2022

1,154,682

Advance transfers - Projects represent transfers of cash where executing agencies have
not yet met performance obligations as specified by ITTO. ITTO monitors theutilization of cash by executing agencies and recognizes expenses only when those
funds have been used by executing agencies as specified by ITTO.
Note 10
Advance transfers – Others(United States dollars)

Breakdown of Advance transfers – Others
Prepaid expenses - staff

2022

2021

118,801

133,165

Prepaid expenses - others

18,811

134,984

Total

137,611

268,150

CFA(XXXVIII)/6
Page 31
Note 11
Property and equipment(United States dollars)Communications
and information
technology (IT)equipment

Total 2021

204,708

51,147564,460-

24,60346,705

Buildings

Furniture andfixtures

VehiclesOffice equipment

Balance as at 1 January

49,220151,827

107,558

Additions

22,101--

Cost

Disposals, transfers and adjustments

-

-

-

-

-

-

71,321

151,827

107,558

204,70875,750611,165

Balance as at 1 January

8,086

99,170107,558

111,698

38,398364,910Depreciation

6,290

9,424

-

41,392

11,423

68,529Balance as at 31 December
Accumulated depreciation

Impairment

-

-

-

-

-

-

Disposals, transfers and adjustments

-

-

-

-

-

-

Balance as at 31 December

14,376

108,594

107,558

153,090

49,821

433,439

Carrying value as at 31 December

56,94543,233-51,61825,929177,726

Buildings

Furniture andfixtures

VehiclesOffice equipment

Communications
and information
technology (IT)equipment

Total 2022

71,321

151,827

107,558

204,70875,750611,165

Cost
Balance as at 1 January
Additions

-

-

-

-

4,099

4,099

Disposals, transfers and adjustments

-

-

-

-

-

-

71,321

151,827

107,558

204,708

79,849615,264

Balance as at 1 January

14,376

108,594

107,558

153,090

49,821

433,439

Depreciation

7,059

9,424

-

39,905

10,212

66,600

Impairment

-

-

-

-

-

-

Balance as at 31 December
Accumulated depreciation

-

-

-

-

-

-

Balance as at 31 December

21,436

118,018

107,558

192,995

60,032500,039

Carrying value as at 31 December

49,88533,809-11,713

19,817

115,225

Disposals, transfers and adjustments

CFA(XXXVIII)/6
Page 32

1.
ITTO does not currently hold any donated property or items of equipment thatare subject to conditions.
2.
The gross carrying amount of fully depreciated property and equipment is$221,008 for 2022 and $197,342 for 2021.
3.
The carrying value of property and equipment recognized under finance leases
is as follows:(United States dollars)

2022

2021

Office equipment

9,273

46,465

Total

9,273

46,465

4.
The ITTO leases copy machines, which the annual lease payments are allocatedbetween the finance charges and the repayment of the finance lease obligation toachieve a constant rate of interest on the remaining balance of the obligation.
5.
There is no significant difference between minimum lease payments and thepresent value of minimum lease payments.
6.

ITTO has not entered into any arrangements containing contingent rent.

Note 12Intangible assets(United States dollars)

Softwareacquiredexternally

Softwareinternallydeveloped

Licences andrightsCopyrights

Total 2021

13,709---13,709Additions

-

-

-

-

-

Transfers

-

-

-

-

-

Disposals

-

-

-

-

-

13,709---13,709Balance as at 1 January

6,862

-

-

-

6,862

Amortization

2,740

-

-

-

2,740

-

-

-

-

-

Balance as at 31 December

9,602

-

-

-

9,602

Carrying value as at 31
December

4,107

-

-

-

4,107

Cost
Balance as at 1 January

Balance as at 31 December
Amortization

Disposals

CFA(XXXVIII)/6
Page 33(United States dollars)

Softwareacquiredexternally

Softwareinternallydeveloped

Licences andrightsCopyrights

Total 2022

Cost
Balance as at 1 January

13,709---13,709Additions

-

-

-

-

-

Transfers

-

-

-

-

-

Disposals

-

-

-

-

-

13,709---13,709Balance as at 1 January

9,602

-

-

-

9,602

Amortization

2,740

-

-

-

2,740

-

-

-

-

-

Balance as at 31 December

12,342---

12,342Carrying value as at 31
December

1,366

-

-

-

1,366

Balance as at 31 December
Amortization

Disposals

Note 13
Other assets
Other assets are mainly comprised of prepaid expenses that cover a period longer than
1 year.
Note 14
Accounts payable – Members
The amounts in Accounts payable – Members correspond to advance payments madeby Members to ITTO for reimbursement of income tax payments of staff members, inaccordance with Regulation 2.11 of the ITTO Staff Regulations and Rules.

CFA(XXXVIII)/6
Page 34

Note 15
Voluntary contributions advance receipts – allocatedDeferred revenue(United States dollars)

Breakdown of deferred revenue

2022

2021

Deferred revenue for the Administrative Account

7,072

8,676

Reforestation and Forest Management (F)1,866,100

2,194,282

Economics, Statistics and Markets (M)880,896361,220

Deferred revenue for projects

Forest Industry (I)880,158

451,734

Activities (A)Deferred revenue for projects

4,909,867
8,537,020

7,547,019
10,554,254

Total deferred revenue

8,544,091

10,562,931

Reconciliation of deferred revenue balances(United States dollars)

Deferred revenue for projects as at 31 December 2020

11,430,728

Liabilities recognized for obligations attached to pledges

2,969,033

Revenue recognized from ongoing projects(3,845,506)

Deferred revenue for projects as at 31 December 2021

10,554,254

Liabilities recognized for obligations attached to pledges

2,304,157

Revenue recognized from ongoing projects(4,321,392)

Deferred revenue for projects as at 31 December 2022

8,537,020

Deferred revenue consists of contributions receivable which are not yet due, and,based on the terms of agreements, are to be used by ITTO in future periods specified
by donors.

CFA(XXXVIII)/6
Page 35

Detail of projects with balance as of 31 December 2022
(United States dollars)

Project ID

Category

ITTO Budget

Programme
SupportExpenses

Deferred Revenue
Advance Transfers
for Projects

Voluntarycontributions:
receivables

PD 452/07 Rev.5 (F) /C50

F

556,963

395,084

70,353

91,526

1,093-

PD 712/13 Rev.2 (F)/C54

F

250,000-

26,787223,213--

PD 732/14 Rev.2 (M)/03'16

M

321,138

246,395

34,40840,335541-

PD 764/14 Rev.3 (F)/04'16

F

606,313

189,21051,886365,21796,930-PD 770/15 Rev.1 (I)/03'16

I

196,224

60,60521,024

114,595

58,721-

PD 832/16 Rev.2 (M)/C55

M

416,080

192,804

44,580178,696

71,529-PD 836/17 Rev.1 (F)/C54

F

417,558

111,048

44,738

261,772

34,237-

PD 845/17 Rev.3 (M)/C56

M

120,000

97,143

12,857

10,000--PD 849/17 Rev.2 (F)/C54

F

335,765

22,18935,975

277,601

67,811-

PD 902/19 Rev.2 (F) Ph.I/09'21(portion funded by Voluntary Contribution)
PD 905/19 Rev.3 (F) Ph.I

F

500,000-

48,168451,832-

400,000

F

200,000-

21,429178,571-

200,000

PD 913/20 Rev.3 (M)/03'22

M

730,088-

78,224

651,864

225,000-

PD 922/21 Rev.1 (I)I

339,500

57,03636,375

246,089

52,193-

PD 926/22 Rev.1 (I)I

320,000-

34,286

285,714-

PD 928/22 Rev.1 (I)I

261,811-28,051

233,760-

PPD 201/21 Rev.1 (F)/C57

F

65,58841,668

7,552

16,368

11,165-

PP-A/49-291 BWP 6 IMM (EU)A

4,681,810

3,953,438

276,600

451,771-

170,603

PP-A/50-304 BWP 18 TAG&CSAG

A

190,402

127,971

31,306

31,125--

PP-A/50-305 BWP27 CPF

A130,000

73,816

13,69442,490--

PP-A/50-305A BWP13/Dec.7(LVII)

A

100,000

27,007

13,043

59,950--

PP-A/52-320: CITES BWP Activit

A

1,648,980

218,945

123,350

1,306,685

251,844

18,777

PP-A/52-320D: Agarwood 2021

A

400,538

309,134

52,244

39,160-

PP-A/53-322 BWP18-19/1

A

50,00039,717

6,522

3,761

-

-

PP-A/53-323 BWP18-19/2 GeneralA

972,953

325,108

127,015

520,830--

PP-A/53-323C BWP18-19/2 FAO

A

133,848

117,748-

16,100--

PP-A/53-323D BWP 2 Timber-Lex

A

24,00020,000

3,130

870

-

-

PP-A/53-323E BWP 2/Mekong FAO

A

70,00025,5595,000

39,441-

15,000

PP-A/53-323F BWP 2/Macao GTI

A

986,720

114,071

128,703

743,946

235,929

592,032-

208,320

PP-A/53-323G BWP 2/Macao BTTS

A

347,200

291,91345,287

10,000

PP-A/53-323H BWP 2/SWU PolicyA

15,000--15,000

PP-A/53-324 BWP18-19/3

A

170,000

71,232

22,17576,593--

PP-A/53-325 BWP18-19/10(a)A

25,00010,864

3,261

10,875--

PP-A/54-326 Landscape RestoratA

147,796

82,060-65,736--

PP-A/54-328 BWP18/8b C&I Mtgs

A

36,117

19,918-16,199--

PP-A/54-329 BWP18/10 Mangrove

A

4,826

-

-

4,826

-

-

PP-A/54-330 BWP18/19b OutreachA

30,044

5,000

3,261

21,783-15,000

PP-A/54-332 BWP18-19/9 StatsA

76,761-

8,479

68,282-

PP-A/55-335 BWP/11 Action PlanA

93,265

8,409

12,16572,691--

PP-A/55-336 EU Grant to 6 BWPs

A

325,440

229,534-

95,906-

106,496

PP-A/55-337 IUCN FLR Tier 2A

41,844

20,577-

21,267

19,433-

PP-A/55-338 BWP18-19/15 C&I SFM

A

20,000-2,609

17,391--

PP-A/55-339 BWP18-19/16 Communications Strategy

A

70,00060,870

9,130

0

-

-

CFA(XXXVIII)/6
Page 36(United States dollars)
Project ID

Category

ITTO Budget

Program m e
SupportExpenses

Deferred Revenue
for Projects

Voluntarycontributions:
receivables

Advance
Transfers

PP-A/56-341A REFACOF Togo Ph.2

A

89,58230,055

6,001

53,526--

PP-A/56-342A (JPNFA)

A

378,930

110,970

40,600227,360--

PP-A/56-342B (JPNFA)

A

344,100

154,538

36,868

152,694

28,257-

PP-A/56-344 BWP21-22/11b

A

100,000

25,01013,044

61,946-

24,712

PP-A/56-345 BWP21-22/12

A

80,00015,797

7,136

57,067-

PP-A/57-346 FAO PF CS

A

10,000

8,696

1,304

0

-

-

PP-A/57-347 PFF NTFP ReportA

11,000

8,551

-

2,449

-

25,000

PP-A/57-348 BWP 17c JPN Trsl

A

75,00038,693

6,522

29,785-

PP-A/57-349 FAO GlobalTimberOutloA

77,00070,000

7,000

0

-

-

PP-A/57-350 Korea Officer 2021

A

850,570

218,12160,087572,362-

323,870

Fellowship progmramme
PP-A/52-319 FFF/up to15AA

80,65844,942-35,716--

PP-A/52-319 FFF/16A

A

56,66851,040

-

5,628

-

-

PP-A/52-319 FFF/17A

A

120,829

100,436

10,018

10,374--

PP-A/52-319 FFF/18A

A

139,564

130,774

2,022

6,769

-

-

PP-A/52-319 FFF/19A

A

115,451

78,915

17,78518,751--

PP-A/52-319 FFF/20A

A

172,896

126,551

22,552

23,793--

PP-A/52-319 FFF/21A

A

127,321111,797-

15,524-

PP-A/52-319 FFF/22A

A

76,635--76,635-

Recognized as net assets-193,190

Unallocated pledges to the fellowship program
Projects funded from Net Assets(BPF-B/Unearmarked Fund)
PD 902/19 Rev.2 (F) Ph.I/09'21(portion funded by Unearmarked Fund)
Recognized as net assets
Total

12,288

F

56,083

5,403

50,680--50,680
19,391,859

Project ID-

Category

8,890,960

ITTO Budget
50,0001,720,009

8,537,020

Expenses(cumulative)
44,643

1,154,682

2,112,098

Balance at project
Programme
closure (*See note
Supportbelow)
5,357-

PPD 189/17 Rev.3 (F)F

PPD 196/19 Rev.1 (F)F

85,79273,600

9,192

3,000

PD 552/09 Rev.1 (F)F

621,578575,856

41,844

3,878

PD 696/13 Rev.2 (F)F

294,444

255,318

33,2765,850

PD 737/14 Rev.2 (I)I

589,863504,069

63,20022,594

PD 740/14 Rev.2 (F)F

450,542

390,760

51,9427,840

PD 765/14 Rev.4 (F) Phase I

F

250,000

212,786

26,786

10,428

PD 777/15 Rev.3 (F)F

515,590435,325

55,24225,023

PD 852/17 Rev.4 (F)F

125,000

111,607

13,393-

PP-A/53-323 BWP18-19/2 RIFFEAC Portion

A

245,727

213,675

32,051-

PP-A/54-331 BMEL Teak Activity

A

1,236,250

1,069,878

161,250

5,122

PP-A/55-334 LSSC-BMEL

A

2,390,000

1,927,611

289,142

173,247

PP‐A/56‐340

A

2,210,526

1,883,585

236,842

90,100

PP-A/56-341 REFACOF TogoA

93,24087,2406,000-

9,158,552

7,785,954

1,025,517

347,081

Total

CFA(XXXVIII)/6
Page 37

Project ID

Category

ITTO Budget

Expenses(cumulative)

Balance at project
closure (*See note
below)

Programme
SupportPPD 191/18 Rev.1 (F)F

71,21160,581

7,630

3,000

PD 599/11 Rev.1 (M)M

490,624

362,81136,88490,929PD 646/12 Rev.3 (F)F

427,210

365,026

46,627

15,557

PD 721/13 Rev.3 (F)F

440,873359,766

47,23633,871

PD 741/14 Rev.3 (F)F

437,478

371,10946,873

19,496

PD 815/16 Rev.2 (I)I

116,480

86,63912,48017,361

PP-A/52-320A:TreeSpecies(Asia)

A

179920152473.25

27446.75

0PP-A/52-320C: TreeSpecieAfrica

A

376,027

358,008

18,019-

PP-A/53-321 KFS Officer

A

979,577

904,771-

74,806

3,519,400

3,021,183

243,196

255,021

Total*Note 1): Balance includes funds to be returned, transferred to Pooled Sub-accounts for ex-post evaluations and/or otherwise reallocated depending on consultations with donors
in accordance with prevailing rules and procedures.

Detail of project terminated in 2021
Project ID
PD 507/08 Rev.1 (F) /C44

Category

ITTO Budget

F

Total

Expenses(cumulative)

Programme
SupportBad debt expenses

Balance

385,800

326,679

29,356

10,115

19,650385,800

326,679

29,356

10,115

19,650

Unearmarked funds and earmarked funds with no conditions attached, such as donor pledges to
the Thematic Programme funds or the Fellowship fund, recognize revenue at the earlier of cash
received or formal acknowledgement/agreement of the contribution to be provided. Therefore,
advance receipts from Thematic programme projects and the Fellowship programmes arerecorded in net assets and are excluded from the reconciliation of deferred revenue balances
shown above.
Note 16
Voluntary contributions advance receipts - unallocated
The amounts in Voluntary contributions advance receipts – unallocated are comprisedof (a) voluntary contributions that have been received from donors but have not been
allocated to specific projects and (b) unspent balance of completed projects belonging
to donors.

Note 17
Assessed contributions advance receipts
Those amounts correspond to assessed contributions, related to 2023 budget, that werereceived before the end of 2022.

CFA(XXXVIII)/6
Page 38

Note 18
Other liabilities(United States dollars)

Breakdown of Other liabilities
Other accounts payable
Employee benefits accrued liabilities
Lease obligation
Other accrued liabilities
Total

2022

2021

248,793

69,196

1,341,053

1,444,737

7,857

45,256247,169

290,906

1,844,872

1,850,093

Information on finance lease payments is contained in Note 11: Property andequipment.
Employee benefits liabilities breakdown(United States dollars)

2022

2021

69,056

111,843

Current employee benefits liabilities
Home leave
Accrued salaries and allowances

73,21745,512

Accrued social securities

118,299

175,232

Total current employee benefits liabilities

260,572

332,587

Non-current employee benefits liabilities
Home leave

12,144

16,703

Repatriation benefits

419,894

399,190

Annual Leave

648,442696,257

Total non-current employee benefits liabilities

1,080,481

1,112,149

Total employee benefits liabilities

1,341,053

1,444,737

CFA(XXXVIII)/6
Page 39

Note 19
Net assets(United States dollars)

Breakdown of net assets
Restrictedaccumulated
surplus2022
Unrestrictedaccumulated
surplusReserves

Restrictedaccumulated
surplus2021
Unrestrictedaccumulated
surplusReserves

Administrative AccountWorking Capital reserve

7,721,032--

6,229,652--

Reserve provided by interest
income-227,717--228,039-

Special reserve--2,500,000--

2,500,000

Funds provided by interest
income

4,028

-

-

3,053

-

-

Thematic programme funds
allocated to projects

902

-

-

902

-

-

Funds allocated to
Fellowship programme

332,091--

361,657--

Unearmarked funds allocatedto projects

50,680--55,235--

Funds allocated to expost
evaluation

426,507--393,063--

Thematic programme funds
unallocated

-

4,935

-

-

4,935

-

Programme support funds-

1,714,576--

1,565,560-

8,535,240

1,947,228

2,500,000

7,043,563

1,798,534

2,500,000

Project Accounts

Total

1.
Net assets represent the value of ITTO assets, less its outstanding liabilities at
the reporting date. ITTO net assets comprise accumulated surpluses and reserves.
2.
Accumulated surplus represent the accumulated surpluses and deficits from
ITTO operations over the years. Accumulated surplus is presented as restricted orunrestricted. Restricted accumulated surplus are linked to commitments or require a
Council decision to be utilized.
3.
Reserves represent the special reserve contained in the Administrative Account.
In accordance with the Financial Rules and Procedures of ITTO, this reserve is set
aside to meet obligations towards the staff members of the Organization, arising in
the event that ITTO ceases to exist, such as termination indemnities, repatriation travel
and removal costs, and repatriation grants.

CFA(XXXVIII)/6
Page 40

Note 20
Administrative account; Revenue from Assessed Contributions and the other contributions(United States dollars)

Breakdown of revenue

2022

2021

7,064,768

7,104,313

7,064,768

7,104,313

248,916
485,136

357,407
94,042

168,551
279,838

201,481324,954

Total Host Country contributions

1,182,441

977,884

Total Assessed and Host Country Contributions

8,247,209

8,082,197

Assessed Contribution receivable

3,496,253

3,093,428

425,468-

Assessed Contributions
Member countries
Total Assessed contributions
Host Country cash contributions
Government of Japan
City of Yokohama
Host Country in-kind contributions
Government of Japan
City of Yokohama

Host Country Contribution receivable

In-kind contributions
In-kind contributions comprise contributions received as goods or services. In-kind
contributions mainly include rights to use assets such as land and buildings.

CFA(XXXVIII)/6
Page 41

Project accounts; Revenue from Voluntary Contributions(United States dollars)

Breakdown of revenue

2022

2021

4,321,392

3,845,506

93,80530,950Contributions
Donors
Revenue from closed projects to the Pooled Fund for
Ex-Post Evaluation
Programme Support Revenue

546,360

398,614

Total voluntary contributions

4,961,557

4,275,069

Voluntary Contribution receivable

2,112,098

1,990,998

Advance transfer - Project

1,154,682

1,105,747

Advance receipts

8,537,020

10,554,254

Ex-Post evaluation revenue from Thematic Programme projects are normallyrecognized at the start of the project. There were no Ex-post evaluation revenue from
Thematic Programme projects recognized in 2021 as well as 2022.

Cash Receipts and Pledges from Donors
A detailed breakdown of cash receipts and pledges by donor can be found in Note 8:
Accounts receivables.

CFA(XXXVIII)/6
Page 42

Note 21
Financial revenue
ITTO generates interest revenue from bank accounts. Interest revenue for 2022 is$1,786 and 2021 is $1,681.
Note 22
Other income
Other income is mainly comprised of honorariums received by staff members wheninvited by external institutions to give lectures or speeches. In 2022, ITTO received$21,742.47 from Honduras for interest payments related to the late payments ofassessed contributions for 1988-1996 written-off previously, which is included inother income.
Note 23
Administrative account; Employee benefits expenses(United States dollars)

Breakdown of employee benefits expenses
Salaries and benefits
Social security
Total employee benefits expenses

2022

2021

3,079,091

3,899,794

840,416

933,847

3,919,507

4,833,641

The total amount of defined contribution plan expenses for pension schemes amount
to $572,675 for 2022 and $518,645 for 2021.
In accordance with CFA(XXXVI)/9 recommendation 4(c), matters related to the
Administration of the Administrative Account regarding the proposal for the treatmentof past provident fund management fees charged to staff was approved and an amountof $47,216.49 was reimbursed to the relevant staff members in 2021.

CFA(XXXVIII)/6
Page 43

Note 24
Operating expenses(United States dollars)

Breakdown of operating expenses
Installation costs
Official travel
Special activities

2022

2021

-

-

73,04823,180-13,895

Data processing

95,135

94,111Other costs

218,426

264,560

Council meetings

419,160

269,831

Expert meetings

44,68333,505

Communication and outreach

283,399

301,411

Statistics, Studies and information

259,650

223,602

Annual Report and Biennial review

80,52074,831Services received through host country in-kind contributions

448,389

526,435

Services received through host country cash contributions

27,30755,694

Expenses from reserve provided by interest income

1,132

7,011

Working capital reserve expenses in accordance with Council decisions

42,49645,8481,993,344

1,933,913

Total operating expenses

Note 25
Project expenses(United States dollars)

Category

2022

2021

Reforestation and Forest Management454,702461,552

Economics, Statistics and Markets

132,188

149,345

Forest Industry

68,457

123,570

3,700,167

3,210,035

84,475

1,792

Transfers to executing agencies

Activities
Programme support expenses
Ex-post Expenses
Total by type60,362

18,3644,500,351

3,964,657

Transfers to executing agencies correspond to the expenses incurred during theaccounting period of 2022 and 2021 by those agencies.
Ex-post expenses are expenses incurred by ITTO for the evaluation of finishedprojects.

CFA(XXXVIII)/6
Page 44

Note 26
Other expenses(United States dollars)

Breakdown of other expenses

2022

2021

Exchange loss / (gain)

374,300

204,307

Allowance expense for debt - Administrative Account754,877

356,053

-

-

315

818

1,129,491

561,179

Allowance expense for debt - Project AccountInterest expense
Total other expenses

Net foreign exchange gains or losses(United States dollars)

Breakdown of foreign exchange gains or losses

Gains

Unrealized

Realized

2021

11,254

5,823

17,078Losses185,132

36,252

221,385

Total net losses

173,878

30,429204,307

Unrealized

Realized

2022

Gains

238,583

22,884

261,467

Losses615,767

19,999635,767

Total net losses

377,184(2,884)374,300

Breakdown of foreign exchange gains or losses

CFA(XXXVIII)/6
Page 45

Note 27
Financial instruments
1.
ITTO has exposure to the following risks from its use of financial instruments:
credit risk, liquidity risk and market risk. The present note contains information about
the exposure to each of the above risks, its objectives, policies and processes formeasuring and managing risk and its management of capital. Further quantitative
disclosures are included throughout the financial statements.
Accounting classifications and fair values
2.
The following tables detail the value of financial assets and financial liabilities
by class of instrument and by category, as defined in the accounting policies.
Financial assets as at 31 December(United States dollars)
Fair value through surplus or deficit
Breakdown of financial assets

Total fair value

Loans and receivables

Available-for-sale

Designated as such upon
initial recognition

Total carrying value

2021

5,084,427

Assessed and voluntary contributions receivable

5,084,427--

5,084,427

Other accounts receivable

61,305--61,30561,305

Total financial assets

5,145,731

5,145,731

5,145,731

Fair value through surplus or deficit

Total fair value

Loans and receivables

Available-for-sale

Designated as such upon
initial recognition

Total carrying value

2022

6,033,819--

6,033,819

6,033,819

Other accounts receivable

49,502--49,50249,502

Total financial assets

6,083,321

6,083,321

6,083,321

Breakdown of financial assets

Assessed and voluntary contributions receivable

3.
The carrying value of financial assets is considered to be a reasonableapproximation of fair value.
Financial liabilities as at 31 December(United States dollars)

Other financial
liabilities(amortized cost)

Total carrying value

8,941

8,941

8,941

1,850,093

1,850,093

1,850,093

1,859,034

1,859,034

1,859,034

Other financial
liabilities(amortized cost)

Total carrying value

Total fair value

Breakdown of financial liabilities
Accounts payable - Members
Other liabilities
Total financial liabilities

2021

Breakdown of financial liabilities
Accounts payable - Members
Other liabilities
Total financial liabilities

Total fair value

2022
66,02566,02566,025

1,844,872

1,844,872

1,844,872

1,910,897

1,910,897

1,910,897

CFA(XXXVIII)/6
Page 46

4.
Most liabilities are short-term and are expected to be settled within the next 12months. Non-current liabilities are reported at amortized cost in the statement offinancial position, and it is assumed that the carrying amounts don’t materially deviate
from the fair values of the financial instruments.
Valuation method5.
The valuation method of the different levels of financial instruments carried atfair value has been defined as follows:(a) Level 1. Average quoted prices from two separate sources (unadjusted) in
active markets for identical assets or liabilities;(b) Level 2. Inputs other than quoted prices included within level 1 that are
observable for the asset or liability, either directly (as price) or indirectly (derived
from prices);(c) Level 3. Inputs for the asset or liability that are not based on observable
market data (unobservable inputs).
6.
ITTO does not hold any financial liabilities that are recognized at fair value
through surplus or deficit. All ITTO’s financial assets and liabilities are of level 3.

CFA(XXXVIII)/6
Page 47

Note 28
Financial risk management
Exposure to credit risk
1.
Credit risk is the risk of financial loss to ITTO if a donor or other counterparty
to a financial instrument fails to meet its contractual obligations. Credit risk arises
principally from cash and cash equivalents, investments, receivables fromcontributions and other receivables.
2.

ITTO holds bank accounts only in Japan and United States.

3.
In the Financial Rules and Rules relating to Projects of the ITTO (Second
Edition), ITTO has a detailed investment policy along with a charter for an investment
oversight panel with quarterly reporting requirements to Council members.
4.
The significant receivables of ITTO are all towards member countries. ITTO hasestablished an allowance for impairment that represents its estimate of incurred losses
in respect of receivables from contributions and other receivables, based on thefollowing rules representing the management’s best estimate of the risk.
For all assessed contributions receivables that are overdue 4 years and more, 100%
allowance is recommended for financial reporting purposes. Write-off of receivables
is not addressed by this IPSAS policy framework, as the Council is the final authority
to determine the write-offs of balances of assessed receivables outstanding from
Member States.
Fair values of unpaid assessed contributions that are outstanding for periods up to 4
years are to be computed using allowance of 80% for receivables overdue by morethan 36 months, allowance of 60% for receivables overdue by more than 24 months,
and 20% for receivables overdue by more than 12 months.
5.
The carrying value of all financial instruments represents the maximum
exposure to credit risk.
Ageing of assessed and voluntary contributions receivables(United States dollars)
0 to 1 year

>1 to 2 years>2 to 3 years>3 up to 4 years

4 years and more

2021

Assessed contributions receivables

1,954,271

912,280

718,002610,666

6,025,689

10,220,907

Voluntary contributions receivables

1,990,998

-

-

-

-

1,990,998

Allowance-(182,456)(430,801)(488,533)(6,025,689)(7,127,479)

Net Total

3,945,269

729,824

287,201

122,133-

5,084,427

0 to 1 year

>1 to 2 years>2 to 3 years>3 up to 4 years

4 years and more

Assessed contributions receivables

1,719,920

1,622,605

858,931

673,3826,459,575

Voluntary contributions receivables

2022

11,334,414

2,112,098

-

-

-

-

2,112,098

Allowance-(324,521)(515,359)(538,706)(6,459,575)(7,838,161)

Net Total

3,832,018

1,298,084

343,572

134,676-

5,608,351

Exposure to liquidity risk

CFA(XXXVIII)/6
Page 48

6.
Liquidity risk is the risk that ITTO will encounter difficulty in meeting its
obligations associated with its accounts payables, other liabilities and promisedtransfers of cash to programmes. ITTO holds sufficient financial assets to cover all its
obligations and contingent liabilities. ITTO does not have any borrowings.
7.
ITTO strictly monitors its budget to avoid engaging in commitments which
sufficient budget is unavailable from contributions received and liquidated by thedonors.
Contractual maturities of financial liabilities(United States dollars)Due
0-3 months

3-6 months

Overdue
6-12 months

More than 1 year

0-3 months

3-6 months

6-12 months

More than 1
year2021 total
carrying value

Lease payments

9,051

9,051

18,102$9,052----45,256

Total

9,051

9,051

18,102

9,052

-

-

-

-

45,256Due
0-3 months

3-6 months

Overdue
6-12 months

More than 1 year

0-3 months

3-6 months

6-12 months

More than 1
year2022 total
carrying value

Lease payments

7,857

-

-

$0

-

-

-

-

7,857

Total

7,857

-

-

$0

-

-

-

-

7,857

8.

No other financial liabilities have contractual maturities.

9.
It is not expected that the cash flows included in the maturity analysis could
occur significantly earlier, or at significantly different amounts.
Exposure to market risk
10. ITTO financial instruments are only composed by loans, receivables and otherfinancial liabilities, consequently ITTO exposure to market risk is considered as not
significant.
Currency risk
11. Currency risk (or foreign exchange risk) arises with regard to financial
instruments that are denominated in a foreign currency. ITTO is exposed to currency
risk on expenses, assets and liabilities that are denominated in a currency other thanthe United States dollar. The currencies in which these transactions are primarily
denominated are as follows:(a) Regarding expenses for the year employee benefits are mainly made inJapanese yen;(b) Regarding assets and liabilities as at 31 December are mainly balanced in
the United States dollar.

CFA(XXXVIII)/6
Page 49

Summary of currency positions(United States dollars)

United States dollar

Yen (converted)

Euro (converted)

2021

Cash and cash equivalents

16,183,396

2,094,617-

18,278,014

Assessed and voluntary contributions
receivable

4,789,085-

295,342

5,084,427

61,305--61,30521,033,786

2,094,617

295,342

23,423,745

-

8,941

-

8,941.19

Other liabilities

1,516,119

333,975-

1,850,093.49

Total financial liabilities

1,516,119

342,916-

1,859,035

Net exposure

19,517,667

1,751,701

295,342

21,564,710

United States dollar

Yen (converted)

Euro (converted)

2022

Cash and cash equivalents

16,840,585

1,084,505-

17,925,090

Assessed and voluntary contributions
receivable

5,331,252

425,468

277,099

6,033,819

49,502--49,502

22,221,339

1,509,973

277,099

24,008,411-

66,025-66,025

Other liabilities

1,647,168

197,705-

1,844,872

Total financial liabilities

1,647,168

263,730-

1,910,897

Net exposure

20,574,172

1,246,243

277,099

22,097,514

Other accounts receivable
Total financial assets

Accounts payable - Members

Other accounts receivable
Total financial assets

Accounts payable - Members

CFA(XXXVIII)/6
Page 50

Sensitivity analysis: foreign currency
12. The following table shows the sensitivity of net assets and surplus/deficits to thestrengthening and weakening of key currencies used by ITTO. This analysis is basedon foreign currency exchange rate variances that ITTO considered to be reasonably
possible as at the reporting date. This analysis assumes that all other variables, inparticular interest rates, remain constant and ignores any impact of forecasted
contributions and expenditures.
(United States dollars)

As at 31 December 2021

Surplus/(deficit)
Strengthening of
United States dollar
by 10 per cent

Weakening of UnitedStates dollar
by 10 per centJapanese yen(159,246)

194,633

Total(159,246)

194,633

As at 31 December 2022

Surplus/(deficit)
Strengthening of
United States dollar
by 10 per cent

Weakening of UnitedStates dollar
by 10 per centJapanese yen(113,295)

138,471

Total(113,295)

138,471

13. The information presented above is calculated by reference to carrying amountsof assets and liabilities.
Sensitivity analysis: interest rates
14.

The exposure of ITTO to interest rates is not material.

Note 29
Capital management
1.
ITTO defines the capital as the aggregate of its net assets, which comprises
accumulated surpluses and reserve balances. ITTO does not have any long-termborrowings and its Financial Rules and Procedures prohibit ITTO from borrowing
funds for the Administrative Account.
2.
Except for unrestricted accumulated surplus, the utilization by ITTO of net
assets requires a Council decision or termination of commitments. Unrestrictedaccumulated surplus are composed by:(a) Interest earned on funds in the Administrative Account usable by the Executive
Director to hire on a temporary and intermittent basis, consultants andcontractors to support the Secretariat in carrying out its duties; and(b) Programme Support within the Project Accounts usable to defray the expenses
of administration of projects, pre-projects, and other activities of theOrganization approved by the Council. Such administrative expenses shallCFA(XXXVIII)/6
Page 51

comprise bank charges, project-related communication costs, the remunerationof project administration staff, and other expenses related to project
administration.
3.
The Executive Director shall notify the Council if the amount of the Working
Capital Reserve falls below 15% or approximately two months of annual operating
expenses of the Administrative Budget. Working Capital Reserve is part of therestricted accumulated surplus and amount to $7,721,032 at the end of 2022 and$6,229,652 at the end of 2021.
Note 30
Commitments
ITTO had no open purchase orders at the end of the reporting period.
Long-term agreements
ITTO is not part of any long term agreement.
Ongoing projects and activities
Restricted accumulated surplus are partially composed by funds allocated to ongoingprojects. While no obligation is attached to the related assets recognized initially,
ITTO has commitments for both Thematic Programme (TP) ongoing projects and theFellowship Programme, as follows:(United States dollars)

Thematic
Programme-

Fellowship
Programme
367,584

Revenue from pledges-

106,619

Transfer to the Ex-post pooled fund--Transfer to the TP pooled fund--Expenses of 2021-

(112,545)

Balance as of 31 December 2021-

361,657

Revenue from pledges-

94,410Transfer to the Ex-post pooled fund--Transfer to the TP pooled fund--Expenses of 2022-

(123,976)

Balance as of 31 December 2022-

332,091

Balance as of 31 December 2020

CFA(XXXVIII)/6
Page 52

Note 31
Contingencies
Contingent assets
ITTO has not received pledges prior to concluding contribution agreements, or
pledges subject to approval.
ITTO has consequently no contingent assets,corresponding to probable inflow of resources, to disclose.
Contingent liabilities
ITTO has no pending litigation representing a financial risk for the organization.
Note 32
Related parties
Key management personnel
1.
The leadership structure of ITTO consists of the Executive Director and the
Directors of each division, including those who substitute these positions as Officerin-charge.
2.
There are no close family members of key management personnel employed by
ITTO nor have there been any transactions made with them by ITTO during thereporting period.
Costs of Key management(United States dollars)

2022

2021

Remuneration

692,384

630,443

Other Entitlements

121,695

143,835

Long-term Benefits

280,548

217,454

1,094,627

991,732

Total

3.
The remuneration paid to key management personnel includes salary, post
adjustment, dependency allowances, medical and social insurance and otherentitlements such as educations grants.
4.
Key management personnel are also eligible for post-employment employee
benefits such as pension defined contributions plan, repatriation and home leave
benefits and payment of unused annual leave. The total amount of defined contribution
plan expenses for pension schemes for key management personnel was $144,235.44
for 2022 and $110,367 for 2021.
5.
There were no loans or advances granted to key management personnel during
the reporting period.

CFA(XXXVIII)/6
Page 53

Note 33
Events after the reporting dateNo significant adjusting or non-adjusting event occurred between the closing date of
31 December 2022 and the date of this report.
Note 34
Financial Accounts
1.
The ITTO governing body and management does not manage the organization
based on service segments or geographical segments. It, therefore, does not havesegments as defined under IPSAS-18: Segment reporting.
2.
However, Article 18 of the International Tropical Timber Agreement, 2006
establishes separate financial accounts to reflect the major funding sources of ITTO
as follows:(a)

The Administrative Account, which is an assessed contribution account where
expenses necessary for the administration of the Agreement are brought into andare met by annual contributions paid by members;(b)

The Special Account, which is a voluntary contribution account comprising of
two sub-accounts: the Project Sub-Account and the Thematic Programmes SubAccount. The purpose of the Project Sub-Account is to facilitate earmarked
contributions for the financing of pre-projects, projects and activities approvedin accordance with criteria established by Council on policy work and project
activities of the Organization. The purpose of the Thematic Programmes SubAccount is to facilitate unearmarked contributions for the financing of approved
pre-projects, projects and activities consistent with Thematic Programmes
established by the Council; and(c) The Bali Partnership Fund, which is a Fund for sustainable management of
tropical timber producing forests, established to assist producer members tomake the investments necessary to achieve the objective of enhancing thecapacity of members to implement strategies for achieving exports of tropicaltimber and timber products from sustainably managed sources.
3.
All financial accounts elimination includes revenue and expenses arising fromtransfers between funds which are accounted for at cost and are eliminated on
consolidation.

CFA(XXXVIII)/6
Page 54
International Tropical Timber Organization
I. Statement of financial position as at 31 December by financial account(United States dollars)

Project Accounts
Administrative Account

Eliminations

Special Account:
Thematic Programme
Sub-AccountSpecial Account:
Project Sub-AccountBali Partnership Fund

Total

Sub-Total

31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December 31 December
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021
2022
2021

AssetsCurrent assets
Cash and cash equivalents
Investments
Assessed and voluntary contributions receivable, net

8,310,798
3,921,721

7,540,379
3,093,428

9,605,896
2,112,098

10,729,725
1,990,998

5,681
-

5,681
-

2,715
-

2,228
-

9,614,292
2,112,098

10,737,634
1,990,998--

17,925,090
6,033,819

18,278,014
5,084,427

Other accounts receivable, net
Advance transfers - Projects
Advance transfers - Others
Total current assets

274
118,000
12,350,794

260
265,554
10,899,621

49,2281,154,682
19,611
12,941,515

61,045
1,105,747
2,596
13,890,112

5,681

5,681

2,715

2,228

49,2281,154,682
19,611
12,949,911

61,045
1,105,747
2,596
13,898,021--

49,502
1,154,682
137,61125,300,705

61,305
1,105,747
268,150
24,797,642

115,225
1,366
116,591
12,467,384

177,726
4,107
181,832
11,081,453

12,941,515

13,890,112

5,681

5,681

2,715

2,228

12,949,911

13,898,021--

115,225
1,366
116,591
25,417,296

177,726
4,107
181,832
24,979,474

Accounts payable - Members

66,025

8,941

-

-

-

-

-

-

-

-

-

-

66,025

8,941

Voluntary contributions advance receipts - allocatedVoluntary contributions advance receipts - unallocated
Assessed contributions advance receipts

7,072
349,459

8,676
325,247

1,551,624
1,630,379-

1,520,727
890,165
-

-

-

-

-

1,551,624
1,630,379-

1,520,727
890,165---

1,558,696
1,630,379
349,459

1,529,404
890,165
325,247

Other liabilities
Total current liabilities

515,598
938,154659,643
1,002,508

248,7933,430,797

69,1962,480,088

-

-

-

-

248,7933,430,797

69,1962,480,088--

764,392
4,368,951

728,839
3,482,595

1,080,481
1,080,481
2,018,635
10,448,750

1,121,255
1,121,255
2,123,763
8,957,691

6,985,396
6,985,396
10,416,192
2,525,323

9,033,527
9,033,527
11,513,615
2,376,497

5,681

5,681

2,715

2,228

6,985,396
6,985,396
10,416,192
2,533,719

9,033,527
9,033,527
11,513,615
2,384,406--

6,985,396
1,080,481
8,065,876
12,434,827
12,982,468

9,033,527
1,121,255
10,154,782
13,637,377
11,342,097

7,721,032
227,7172,500,000
10,448,750

6,229,652
228,0392,500,000
8,957,691

812,829
1,712,494
2,525,323

813,019
1,563,479
2,376,497

892
4,789
5,681

892
4,789
5,681

487
2,228
2,715

2,228
2,228

814,208
1,719,511
2,533,719

813,911
1,570,495
2,384,406--

8,535,240
1,947,228
2,500,000
12,982,468

7,043,563
1,798,534
2,500,000
11,342,097

Non-current assets
Property and equipment
Intangible assets
Other assets
Total non-current assets
Total assets
Liabilities
Current liabilities

Non-current liabilities
Voluntary contributions advance receipts - allocated
Other liabilities
Total non-current liabilities
Total liabilities
Net of total assets and total liabilities
Net assets
Accumulated surplus - Restricted
Accumulated surplus - Unrestricted
Reserves
Total net assets

CFA(XXXVIII)/6
Page 55

International Tropical Timber Organization
II. Statement of financial performance for the year ended 31 December by financial account(United States dollars)
Project Accounts
Administrative Account

Eliminations

Special Account:
Project Sub-AccountSpecial Account:
Thematic Programme
Sub-AccountBali Partnership Fund

2022

2022

2022

2021

2021

Total

Sub-Total

2022

2021

2021

2022

2021

2022

2021

2022

2021

Assessed contributions

7,064,768

7,104,313

-

-

-

-

-

-

-

-

-

Host country contributions

1,182,441

977,884

-

-

-

-

-

-

-

-

-

-

7,064,768

7,104,313-

1,182,441

Financial revenue

810

724

-

-

-

-

-

-

-

-

977,884--

810

Other income

41,852

1,189

-

-

-

-

-

-

-

724

-

-

-

41,852

1,189

-

-

4,321,392

3,845,506

-

-

-

-

4,321,392--

3,845,506--

4,321,392

3,845,506

Other voluntary contributions

-

-

-

-

-

-

-

-

-

-

-

-

-

-

Programme support Revenue--

546,360

398,614

-

-

-

-

546,360

398,614--546,360

398,614

Expost evaluation Revenue--

93,80530,950----93,80530,950--93,80530,950Financial revenue

-

-

489

488

-

-

487

469

976

957

-

-

976

957

Other income

-

-

-

-

-

-

-

-

-

-

-

-

-

-

8,289,871

8,084,111

4,962,046

4,275,557

-

-

487

469

4,962,533

4,276,026--

13,252,404

12,360,137

Employee benefits

3,919,507

4,833,641

-

-

-

-

-

-

-

-

-

-

3,919,507

4,833,641

Operating expenses

1,993,344

1,933,913

-

-

-

-

-

-

-

-

-

-

1,993,344

1,933,913

Revenue
Administrative AccountProject Accounts
Member States voluntary contributions

Total revenue
Expenses
Administrative AccountProject Accounts
Project expenses--

4,500,351

3,964,657

-

-

-

-

4,500,351

3,964,657--

4,500,351

3,964,657

69,340816,622

71,269401,888

312,870

159,290

-

-

-

-

312,870

159,290--

69,3401,129,491

71,269561,179

Total expenses

6,798,812

7,240,712

4,813,220

4,123,947

-

-

-

-

4,813,220

4,123,947--

11,612,033

11,364,658

Surplus/(deficit) for the year

1,491,059

843,399

148,825

151,610

-

-

487

469

149,312152,080--

1,640,371

995,479

Depreciation and amortization
Other expenses