Proposal for a REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL on establishing a Union programme to support specific activities in the field of financial reporting and auditing for the period of 2014-2020
Date: 2012-12-19
Institutions: European Commission
Subjects: EU programme, access to information, audit, financial control, financial market, financial services, international standard, single market

EUROPEAN 
COMMISSION 

Brussels, 19.12.2012  
COM(2012) 782 final 

2012/0364 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on establishing a Union programme to support specific activities in the field of financial 
reporting and auditing for the period of 2014-2020 

(Text with EEA relevance) 

{SWD(2012) 444 final} 

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EXPLANATORY MEMORANDUM 

1. 

CONTEXT OF THE PROPOSAL 

The  single  market  is  one  of  the  European  Union's  greatest  achievements.  Integration  and  a 
well-functioning  internal  market  are  indispensable  in  making  the  Europe  2020  strategy 
successful and to put the EU economy on a sustainable growth path in order to overcome the 
financial and the subsequent sovereign debt crisis that unfolded since 2008. 

As capital markets are global, harmonisation of financial reporting and audit rules at global 
level is essential for the smooth functioning of the capital markets and also for the realization 
of an integrated market for financial services in the EU. Instead of introducing its own set of 
regional  financial  reporting  standards,  and  thereby  harmonising  the  EU-level  legislation  but 
adding  to  regional  fractions  at  the  global  level,  in  2002  the  EU  has  decided  to  adopt 
international accounting standards (IFRS). 

With  more  and  more  countries  moving  towards  and  adopting  IFRS,  Europe  will  need  more 
weight  in  the  international  standard  setting  process  for  its  voice  to  be  heard.  In  order  to  be 
heard  and  listened  to,  the  Union  has  to  speak  with  one  voice.  EFRAG1,  the  European 
Commission's  technical  adviser  in  accounting  matters  has  gradually  taken  up  the  role  of 
providing upstream, technical and credible input to the IASB's standard setting process.  

Both the international standard setter and the organisation representing Europe's interests need 
to be independent, possess the sufficient capacity and expertise to produce quality standards 
and input to those standards, and have sound financial basis in order to be able to carry out 
their public interest mission on a long-term basis. 

To  these  ends,  in  2009  the  European  Parliament  and  the  Council  established  a  Community 
Programme to support specific activities in the field of financial services, financial reporting 
and  auditing2.  That  Programme  will  end  on  31  December  2013.  The  purpose  of  this 
Regulation  is  to  renew  that  Programme  for  the  next  financial  framework  (2014-2020)  and 
enable  direct  contributions  to  the  funding  of  the  Programme's  beneficiaries  from  the  Union 
budget in that period.  

The  original  beneficiaries  of  the  Programme  were  the  Committees  of  Supervisors3,  the 
International Accounting Standards Committee Foundation (IASCF), the European Financial 
Reporting  Advisory  Group  (EFRAG)  and  the  Public  Interest  Oversight  Board  (PIOB).  The 
Decision also foresaw the possibility of including a new or replacing an old beneficiary.  

In 2010, the European Supervisory Authorities have been set up and took over among others 
the  responsibilities  of  the  previous  Committees'  of  Supervisors.  Therefore  this  Regulation 
aims  at  extending  the  Union  co-financing  of  the  remaining  beneficiaries,  namely  the  IFRS 
Foundation (legal successor of the IASCF), EFRAG and the PIOB.  

1 
2 

3 

European Financial Reporting and Advisory Group 
Decision  No  716/2009/EC  of  the  European  Parliament  and  of  the  Council  of  16  September  2009 
establishing  a  Community  programme  to  support  specific  activities  in  the  field  of  financial  services, 
financial reporting and auditing OJ L 253, 25.9.2009, p. 8. 
CESR, CEBS, CEIOPS 

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1.1. 

Financial reporting: the IFRS Foundation  

The crisis in the financial markets that unfolded since 2007 has highlighted the importance of 
transparency  and  consequently  the  issue  of  accounting  standards  rose  high  on  the  political 
agenda.  It  became  clear  that  a  favourable  business  environment  and  a  global  level  playing 
field should be combined with transparency and comparability that are conducive to a well-
functioning global capital market. Leaders around the world realized the key importance of a 
single set of high-quality, global accounting standards.4  

The  European  Union  showed  leadership  when  it  decided  to  adopt  international  accounting 
standards (IFRS and IFRIC) in the Union law. According to Regulation 1606/2002 (the ‘IAS 
Regulation’), companies listed in the EU have to draw up their consolidated financial reports 
using international accounting standards adopted in the Union. Member States may require or 
allow their use for annual accounts and/or non-listed companies.  

The financial reports of European companies using IFRS adopted in the Union are accepted 
without restatement in several capital markets around the globe – including the US, Australia 
and Japan. With more and more countries adopting or converging to IFRS, progress towards 
the goal of one single set of globally accepted, international accounting standards is steady. 

International  accounting  standards  (IFRS  and  IFRIC)  are  developed  by  the  IASB  and  the 
IFRS  Interpretation  Committee.  The  IFRS  Foundation  is  an  umbrella  body  of  those 
organisations  and  cares  for  their  smooth  functioning  and  proper  financing.  The  body 
developing  high  quality  accounting  standards  has  to  be  independent  and  needs  sufficient 
capacity  to  recruit  top-quality  people.  To  this  end,  it  needs  a  solid,  neutral,  reliable  and 
calculable funding base for the long-term.  

In  addition  to  the  funding,  also  the  governance  of  the  IFRS  Foundation  has  to  support  the 
independent,  credible  and  proper  functioning  of  that  organisation.  The  governance  of  the 
Foundation  has  been  improved  in  the  past  years  most  importantly  with  the  creation  of  the 
Monitoring  Board.  That  body  was  set  up  to  allow  for  accountability  and  the  proper 
representation  of  public  interest  in  the  organisation.  The  effectiveness  of  the  Standards 
Advisory Council has been enhanced and the Due Process Oversight Committee was set up. 
Further work will be needed to ensure that the IFRS Foundation strengthens its status of high 
quality standard setter that is representative of the global nature of capital markets. 

To that end, by Decision 716/2009, the European Union has shown that it is willing to provide 
the IFRS Foundation (IASCF) with the necessary financial support in the form of a stable co-
financing  scheme.  The  Union,  together  with  certain  individual  Member  States  started  to 
contribute to the IFRS Foundation’s budget commensurate to its weight on the global capital 
markets.  The  EU  contribution  to  the  IFRS  Foundation's  budget  in  the  2011  fiscal  year  was 
€4.229.165,14 (17% of the Foundation's total eligible expenses for that year). 

According  to  the  Monitoring  Board's  final  report  on  the  Review  of  the  IFRS  Foundation’s 
Governance5 published on 9 February 2012, membership in the Monitoring Board will be tied 
to financial contribution to the IFRS Foundation's budget. It is therefore essential that the EU 
continues  to  contribute  to  the  IFRS  Foundation's  budget  according  to  its  global  economic 

4 
5

Repeated calls since the 2009 London declaration; last time in Los Cabos, 2012 

http://www.iosco.org/monitoring_board/pdf/Final%20Report%20on%20the%20Review%20of

%20the%20IFRS%20Foundation's%20Governance.pdf 

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weight if Europe wants to maintain its current position in the international financial reporting 
arena.  

1.2. 

Financial  reporting:  the  European  Financial  Reporting  Advisory  Group 
(EFRAG) 

EFRAG  was  established  in  2001  as  a  private  organisation  to  provide  the  European 
Commission with technical expertise in financial reporting matters. At the beginning, EFRAG 
provided mainly advices to the Commission on whether an international accounting standard 
to be adopted in the Union meets the technical endorsement criteria6. EFRAG has gradually 
taken on the role of pro-actively influencing the IASB in its standard setting work. It provides 
input by issuing comment letters on draft standards and early-stage contribution by publishing 
discussion papers on current accounting issues. EFRAG comment letters are read and cited all 
around the world.  

Originally,  representation  and  voting  rights  at  EFRAG's  governing  bodies  (such  as  the 
General  Assembly  and  the  Supervisory  Board)  were  tied  to  the  financial  contribution  to 
EFRAG's budget. The body in charge of the core technical work, the TEG (Technical Expert 
Group), has always been independent. 

In  2008,  EFRAG's  governance  was  thoroughly  reformed  in  order  to  mirror  its  enhanced 
public policy role – becoming a platform to form the single European accounting voice. The 
aim was to ensure increased public oversight and accountability.  

Two major changes were introduced:  

• 

• 

The setting up of the Planning and Resource Committee (PRC) where the early-stage 
pro-active work is centred – with the participation of national standard setters; and 

The  strengthening  the  role  of  the  Supervisory  Board:  its  members  are  no  longer 
representatives  of  the  funding  organisations  but  are  appointed  in  their  personal 
capacity.  Members  represent  diverse  stakeholders  –  preparers  (including  SMEs), 
users  and  financial  institutions;  or  have  a  public  policy  background  –  and  all  are 
expected to act in the public interest. Out of the 17 Supervisory Board members, four 
are so-called public policy members: they have in particular a background in public 
policy making and are nominated by the Commission.  

The  TEG  has  remained  responsible  for  the  core  of  EFRAG's  technical  work.  Any  EFRAG 
position  on  the  international  accounting  standards  has  to  be  discussed  and  approved  by  the 
TEG, which acts as an independent technical expert committee. EFRAG's chairman chairs the 
TEG  meetings  and  EFRAG  has  its  own  secretariat  (consisting  of  accounting  professionals). 
Endorsement advices to the Commission and comment letters to the IASB form the bulk of 
TEG’s work.  

The majority of EFRAG’s meetings are open to the public and the Commission services may 
attend as observers all EFRAG meetings.  

The targeted governance reform in 2008 allowed EFRAG to expand its pro-active activities in 
cooperation  with  the  European  National  Standard  Setters.  Through  further  governance 
reforms  to  be  engaged  in  the  coming  months,  EFRAG  will  continue  to  develop  means  to 

6 

EFRAG is in fact the body mentioned in recital (10) of the IAS Regulation  

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ensure that it becomes the leading platform to form a 'single accounting voice of the EU' and 
to  deliver  the  Union's  input  to  the  IASB.  For  that  purpose,  EFRAG  will  undertake  a 
comprehensive  review  of  its  governance  structure  taking  due  account  of  the  most  recent 
developments in the arena of international financial reporting. 

With  more  and  more  countries  adopting  IFRS,  the  EU  needs  to  take  steps  to  prevent  the 
gradual loss of influence and weight at the IASB. It is therefore of vital importance that the 
European interests are well-represented at international level. To this end, it is essential that 
Europe ‘speaks with one voice’ which is credible and technically sound.  

EFRAG needs solid, long-term, diverse funding to be credible and independent and be able to 
produce  top-quality  documents  by  employing  top-quality  experts.  Also,  the  pan-European 
view  is  represented  only  if  along  with  the  big  Member  States,  the  Commission  co-finances 
EFRAG on behalf of the smaller MS.  

The 2010-2013 financing Programme was set up with a view to establish a reliable funding in 
the  long-term.  On  the  basis  of  EU  financing  Decision  of  16  September  2009,  the  EU 
contribution to EFRAG in the 2011 fiscal year was €2.288.160 (43% of EFRAG's total budget 
for that year). 

The  goals  of  that  Programme  are  long-term  objectives;  therefore  it  is  difficult  to  draw 
conclusions after only two full years of financing. Based on the experiences of the financing 
so far, the Programme has met its main objectives. Among others, it has allowed EFRAG to 
expand its activities and engage in the pro-active work, go out to stakeholders and gather their 
views at outreach events and increase its independence by taking its chairperson on its own 
payroll.  For  more  details  about  the  experiences  so  far,  please  refer  to  the  Commission 
services' ex ante evaluation annexed to this proposal.  

1.3. 

Auditing: the Public Interest Oversight Board (PIOB) 

The Public Interest Oversight Board (PIOB) is a non-for-profit Spanish Foundation set up in 
Madrid.  The  key  partners  of  the  PIOB  are  the  Monitoring  Group  (MG),  which  is  the  body 
representing  international  regulators  and  institutions7,  and  the  International  Federation  of 
Accountants  (IFAC),  which  is  the  private  body  representing  accountants  and  auditors 
worldwide8. The PIOB consists of ten members including its Chairman. Two of the members 
are nominated by the European Commission. 

The PIOB members are persons nominated by the Monitoring Group for a three-year period 
according to a Memorandum of Understanding. The PIOB constituency comprises a variety of 
stakeholders:  legislators  (e.g.  the  European  Parliament,  national  legislators),  regulators  and 
supervisors of financial markets including auditor's oversight bodies, national standard setters 
for  accounting  and  auditing,  auditors  and  audit  profession  in  general,  preparers  of  financial 
statements  (companies),  users  of  financial  statements  (e.g.  investors,  analysts,  researchers, 
suppliers), academics. 

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The  members  of  the  MG  are:  the  European  Commission,  IOSCO  (International  Organization  of 
Securities  Commissions),  BCBS  (Basel  Committee  on  Banking  Supervision),  IAIS  (International 
Association of Insurance Supervisors), the FSB (Financial Stability Board), IFIAR (International Forum 
of Independent Audit Regulators) and the World Bank 
The  PIOB  oversees  IFAC  from  the  public  interest  point  of  view.  By  implication,  the  following  three 
independent  committees  of  IFAC  can  also  be  considered  PIOB  partners:  the  IAASB  (International 
Auditing  and  Assurance  Standards  Board),  the  IESBA  (International  Ethics  Standards  Board  for 
Accountants) and the IAESB (International Accounting Education Standards Board). 

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PIOB's role is to guarantee that due process, oversight and transparency are respected in the 
proposal, development and adoption of international standard for auditors in the framework of 
the International Federation of Accountants (IFAC). The Foundation is governed by a Board 
of Trustees in which each member of the PIOB is a trustee. 

On  the  basis  of  EU  financing  Decision  of  16  September  2009,  the  EU  contribution  to  the 
PIOB in 2010 fiscal year was €286.231. Such an  amount represented 22% of the PIOB's total 
eligible expenses (€1.301.050). On  the other hand, the EU contribution to the PIOB in 2011 
fiscal year was €288.991,78 which also represents 22%  of the PIOB eligible expenses for that 
year (€1.313.599). 

The PIOB co-funding experience has been up to now positive. The European Commission has 
had  the  opportunity  to  visit  the  PIOB  premises  twice  (March  2010  and  April  2011)  and  to 
verify its financial controls. The European Commission also trained its staff on EU budgetary 
procedures. From a practical point of view the activities involved in the management of the 
operating grant for the 2010 and 2011 fiscal years have been a very useful learning experience 
for  both  sides.  This  has  paved  the  way  for  more  efficient  management  of  future  funding 
contributions. 

The  EU  co-financing  of  the  PIOB  has  become  an  example  for  other  potential  contributors. 
Currently  only  IFAC  (around  78%)  and  the  EU  (around  22%)  co-finance  the  PIOB.  The 
European  Commission's  efforts  are  on-going  to  diversify  the  funding  of  the  PIOB  and  to 
reinforce its independence vis-à-vis the audit profession. Several international institutions are 
expected  to  provide  funds  to  the  PIOB  already  for  the  2013  fiscal  year.  Moreover,  the 
Monitoring Group, the PIOB and IFAC have created a Task Force to select and convince a 
group of donors from all over the world to provide funding to the PIOB on a stable and long-
term basis. 

For the EU to reduce its financial commitment from the current level (representing 22% of the 
total budget) would give the wrong message at a time when the PIOB is trying to diversify its 
funding  structure.  But  this  is  also  extremely  critical  in  view  of  our  current  audit  market 
reforms,  which  are  aiming  to  increase  the  independence  of  firms,  the  standard  setters  of 
international auditing standards (ISAs) as well as audit supervisors. 

2. 

RESULTS OF CONSULTATIONS WITH THE INTERESTED PARTIES AND 
IMPACT ASSESSMENTS 

In its ex-ante evaluation accompanying the Commission proposal for the establishment of the 
2010-2013  Programme9,  the  Commission  assessed  the  possible  alternatives  of  funding.  The 
objectives of the programme were to ensure stable, diversified, sound and adequate funding 
and  to  enable  the  bodies  concerned  to  accomplish  their  mission  in  an  independent  and 
efficient manner. It has been clearly established that Union co-financing is the most efficient 
and appropriate option of reaching those objectives.  

In the ex ante evaluation accompanying the current proposal, the Commission found that the 
Programme  so  far  met  the  expectations  and  objectives  set  and  that  financing  should  be 
continued. Moreover, the financing Programme was set up with the aim of meeting long-term 
objectives.  Thus,  it  is  appropriate  to  propose  it  being  continued  in  the  next  financial 
framework of 2014-2020.  

9 

COM(2009) 14 final 

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3. 

LEGAL ELEMENTS OF THE PROPOSAL 

3.1. 

Legal basis 

The Treaty on the Functioning of the European Union, and in particular Article 114. 

In accordance with the Commission legislative policy adopted in the framework of the Multi-
Annual Financial Framework, the present funding programme is proposed as a Regulation. 

3.2. 

Subsidiarity principle 

The  Union  programme  provides  for  the  possibility  to  co-finance  activities  of  certain  bodies 
pursuing an objective forming part of and supporting the Union policy in the field of financial 
reporting  and  auditing.  The  proposal  complies  with  the  subsidiarity  principle  since,  in 
accordance  with  Article  5  of  the  Treaty  on  the  European  Union,  its  objectives  cannot  be 
sufficiently achieved by the Member States and can, by reason of the scale and the effect of 
the action, be better achieved at Union level. 

3.3. 

Proportionality principle 

The proposal complies with the proportionality principle as set out in Article 5 of the Treaty 
on  the  European  Union.  As  assessed  in  the  ex-ante  evaluation,  this  Regulation  does  not  go 
beyond what is necessary in order to achieve its objectives. Union funding is proposed for a 
well-defined  and  limited  number  of  the  most  important  bodies  in  the  field  of  financial 
services.  Within  the  current  institutional  framework,  the  new  funding  arrangements  will 
ensure stable, diversified, sound and adequate funding to enable the relevant bodies to carry 
out  their  Union-related  or  Union  public  interest  mission  in  an  independent  and  efficient 
manner. Financial support will be granted according to the conditions laid down in Regulation 
(EU,  Euratom)  No  966/2012  of  the  European  Parliament  and  of  the  Council  of  25  October 
2012  on  the  financial  rules  applicable  to  the  general  budget  of  the  European  Union  and 
Commission Delegated Regulation (EU, Euratom) No …./.. of 29 October 2012 on the rules of 
application of Regulation (EU, Euratom) No 966/2012 of the European Parliament and of the 
Council on the financial rules applicable to the general budget of the Union. 

4. 

BUDGETARY IMPLICATION 

The total amount to be borne by the Union’s budget is EUR 58.01 million in current prices for 
the 2014 – 2020 period. The Programme is a seven year programme aligned with the duration 
of the financial perspectives 2014 – 2020. 

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2012/0364 (COD) 

Proposal for a 

REGULATION OF THE EUROPEAN PARLIAMENT AND OF THE COUNCIL 

on establishing a Union programme to support specific activities in the field of financial 
reporting and auditing for the period of 2014-2020 

(Text with EEA relevance) 

THE EUROPEAN PARLIAMENT AND THE COUNCIL OF THE EUROPEAN UNION, 

Having  regard  to  the  Treaty  on  the  Functioning  of  the  European  Union,  and  in  particular 
Article 114 thereof, 

Having regard to the proposal from the European Commission, 

After transmission of the draft legislative act to the national Parliaments, 

Having regard to the opinion of the European Economic and Social Committee10, 

Acting in accordance with the ordinary legislative procedure, 

Whereas: 

(1) 

(2) 

(3) 

Decision  No  716/2009/EC  of  the  European  Parliament  and  of  the  Council11 
established  a  Community  programme  to  support  specific  activities  in  the  field  of 
financial services, financial reporting and auditing. On the basis of that Decision, the 
European Financial Reporting Advisory Group (EFRAG), the International Financial 
Reporting  Standards  Foundation  (IFRS  Foundation;  the  legal  successor  of  the 
International  Accounting  Standards  Committee  Foundation,  IASCF)  and  the  Public 
Interest  Oversight  Board  (PIOB)  benefit  from  Union  co-financing  in  the  form  of 
operating grants until 31 December 2013.  

The crisis in the financial markets which has unfolded since 2008 has put the issue of 
financial reporting and auditing at the centre of the Union's political agenda. A well-
functioning common financial reporting framework is essential for the internal market, 
for  the  effective  functioning  of  the  capital  markets  and  for  the  realization  of  the 
integrated market for financial services in the EU. 

In  a  global  economy,  there  is  a  need  for  a  global  accounting  language.  International 
Financial  Reporting  Standards  (IFRS)  developed  by  the  International  Accounting 
Standards Board (IASB) are adopted and used in many jurisdictions around the world. 

10 
11 

OJ C , , p. . 
OJ L 253, 25.9.2009, p. 8. 

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(4) 

(5) 

(6) 

(7) 

(8) 

Such international accounting standards need to be developed under a transparent and 
democratically  accountable  process.  To  ensure  that  the  interests  of  the  Union  are 
respected and that global standards are of high quality and compatible with Union law, 
it is essential that the interests of the Union are adequately taken into account in that 
international standard-setting process. 

According  to  Regulation  (EC)  No  1606/2002  of  the  European  Parliament  and  of  the 
Council  of  19  July  2002  on  the  application  of  international  accounting  standards12, 
IFRS  should  be  incorporated  into  Union  law  to  be  applied  by  companies  with 
securities listed on a regulated market in the Union, provided that the IFRS meet the 
criteria set out in that regulation. IFRS therefore play a major role in the functioning of 
the internal market and thus the Union has a direct interest in ensuring that the process 
through which IFRS are developed and approved delivers standards that are consistent 
with the requirements of the legal framework of the internal market. 

IFRS  are  issued  by  the  IASB  and  related  interpretations  are  issued  by  the  IFRS 
Interpretations  Committee,  two  bodies  within  the  International  Financial  Reporting 
Standards  Foundation.  It  is  therefore  important  to  establish  appropriate  funding 
arrangements for the IFRS Foundation. 

The European Financial Reporting Advisory Group (EFRAG) was founded in 2001 by 
European organisations representing issuers, investors and the accountancy profession 
involved  in  the  financial  reporting  process.  In  accordance  with  Regulation  (EC)  No 
1606/2002, EFRAG provides the Commission with opinions on whether an accounting 
standard  issued  by  the  IASB  or  an  interpretation  issued  by  the  IFRS  Interpretations 
Committee, which is to be endorsed, complies with the endorsement criteria set out in 
that Regulation. EFRAG is also taking up the role of the 'single European accounting 
voice'  in  the  global  arena.  In  that  capacity,  EFRAG  provides  input  to  the  IASB's 
standard-setting process.  

Taking  into  account  EFRAG's  key  role  in supporting  internal  market  law  and  policy 
and in representing European interests in the standard-setting process at international 
level,  it  is  necessary  for  the  Union  to  ensure  EFRAG's  stable  financing  and  thus 
contribute to its funding. 

In the field of statutory audit, the Public Interest Oversight Board (PIOB) was created 
in 2005  by  the  Monitoring  Group,  an  international  organisation  responsible  for 
monitoring  the  governance  reform  of  the  International  Federation  of  Accountants 
(IFAC).  The  role  of  the  PIOB  is  to  oversee  the  process  leading  to  the  adoption  of 
International  Standards  on  Auditing  (ISAs)  and  other  public  interest  activities  of  the 
IFAC. It is possible for ISAs to be adopted for their application in the Union provided, 
in  particular,  that  they  have  been  developed  with  due  process,  public  oversight  and 
transparency  as  required  under  Article 26  of  Directive  2006/43/EC  of  the  European 
Parliament and of the Council of 17 May 2006 on statutory audits of annual accounts 
and  consolidated  accounts13.  The  new  audit  proposals  of  30  November  2011  also 
envisage the introduction of ISAs in the EU.14 

12 
13 
14 

OJ L 243, 11.9.2002, p. 1. 
OJ L 157, 9.6.2006, p. 87. 
The amended text of Article 26 as indicated in Article 1 of the Proposal for a Directive of the European 
Parliament and of the Council amending Directive 2006/43/EC on statutory audits of annual accounts 
and consolidated accounts, COM(2011) 778 final and Article 20 of the Proposal for a Regulation of the 

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(9) 

The introduction of ISAs in the Union and the key role of the PIOB in ensuring that 
they  fulfil  the  requirements  laid  down  in  Directive  2006/43/EC  mean  that  the  Union 
has  a  direct  interest  in  ensuring  that  the  process  through  which  such  standards  are 
developed  and  approved  delivers  standards  that  are  consistent  with  the  legal 
framework  of  the  internal  market.  The  amended  text  of  Article  26(3)  as  indicated  in 
Article  1  of  the  proposal  for  a  Directive15  also  explicitly  recognises  the  role  of  the 
PIOB.  It  is  therefore  important  to  ensure  appropriate  funding  arrangements  for  the 
PIOB. 

(10)  Bodies  working  in  the  field  of  accounting  and  auditing  are  highly  dependent  on 
funding and play major roles in the Union which are decisive for the functioning of the 
internal market. The proposed beneficiaries of the Programme established by Decision 
No  716/2009/EC  have  been  co-financed  by  operating  grants  from  the  Union  budget, 
which has allowed them to increase their independence from private-sector and ad-hoc 
funding, thereby raising their capacity and credibility.  

(11)  Experience has shown that Union co-financing ensures that beneficiaries benefit from 
clear, stable, diversified, sound and adequate funding and it contributes to enabling the 
beneficiaries  to  accomplish  their  public  interest  mission  in  an  independent  and 
efficient  manner.  Therefore,  sufficient  funding  should  continue  to  be  provided  by 
means of a Union contribution towards the functioning of international accounting and 
auditing  standard-setting,  and  in  particular  to  the  IFRS  Foundation,  EFRAG  and  the 
PIOB. 

(12) 

In addition to changing their funding patterns, the IFRS Foundation and EFRAG have 
undergone  governance  reforms  to  ensure  that  through  their  structure  and  processes 
they accomplish their public interest mission in an independent, efficient, transparent 
and  democratically  accountable  manner.  In  relation  to  the  IFRS  Foundation,  the 
Monitoring Board was created in 2009 to ensure public accountability and oversight, 
the effectiveness of the Standards Advisory Council has been enhanced, transparency 
has been improved and the role of impact assessments has been formalised as part of 
the due process of the IASB. 

(13)  For  the  entire  duration  of  the  programme,  a  financial  envelope  should  be  laid  down 
constituting  the  prime  reference,  within  the  meaning  of  point  [17]  of  the 
Interinstitutional  Agreement  of  XX/YY/201Z  between  the  European  Parliament,  the 
Council  and  the  Commission  on  cooperation  in  budgetary  matters  and  on  sound 
financial  management,  for  the  budgetary  authority  during  the  annual  budgetary 
procedure. 

(14)  Regulation  (EU,  Euratom)  No  966/2012  of  25  October  2012  on  the  financial  rules 
applicable to the general budget of the Union and Commission Delegated Regulation 
(EU, Euratom) No …/… of 29.10.2012 on the rules of application of Regulation (EU, 
Euratom) No 966/2012 of the European Parliament and of the Council on the financial 
rules  applicable  to  the  general  budget  of  the  Union16,  which  safeguard  the  Union 
financial interests, have to be applied taking into account the principles of simplicity 

European Parliament  and of  the  Council  on  specific  requirements  regarding  statutory  audit  of  public-
interest entities, COM(2011) 779 final 
Proposal for a Directive of the European Parliament and of the Council amending Directive 2006/43/EC 
on statutory audits of annual accounts and consolidated accounts, COM(2011) 778 final 
[...] 

15 

16 

EN 

10 

   EN 

                                                                                                                                                         
and consistency in the choice of budgetary instruments, a limitation on the number of 
cases  where  the  Commission  retains  direct  responsibility  for  implementation  and 
management, and the required proportionality between the level of resources and the 
administrative burden related to their use.  

(15)  The  co-financing  programme  to  be  established  by  this  Regulation  is  expected  to 
contribute  to  the  objectives  of  ensuring  comparability  and  transparency  of  company 
accounts  throughout  the  EU,  to  the  global  harmonization  of  financial  reporting 
standards  by  promoting  the  international  acceptance  of  IFRS  and  to  promoting 
convergence  and  high  quality  international  standards  for  auditing  in  all  Member 
States. This programme also contributes to the Europe 2020 strategy by reinforcing the 
single  market  of  financial  services  and  capital,  and  contributes  to  the  strategy's 
external dimension as well.  

(16)  This Regulation should provide for the possibility of co-financing activities of certain 
bodies  pursuing an objective  forming  part of and supporting the Union policy in  the 
field  of  designing  standards,  endorsing  standards  or  supervising  standard-setting 
processes related to financial reporting and auditing. 

(17)  Union  funding  is  proposed  for  a  well-defined  and  limited  number  of  the  most 
important  bodies  in  the  field  of  financial  reporting  and  auditing.  Within  the  current 
institutional  framework,  the  funding  arrangements  should  ensure  stable,  diversified, 
sound  and  adequate  funding  to  enable  the  relevant  bodies  to  carry  out  their  Union-
related or public interest mission in an independent and efficient manner.  

(18)  Financial  support  should  be  granted  in  accordance  with  the  conditions  laid  down  in 
Regulation  (EU,  Euratom)  No  966/2012  of  the  European  Parliament  and  of  the 
Council of 25 October 2012 on the financial rules applicable to the general budget of 
the  Union  and  Commission  Delegated  Regulation  (EU,  Euratom)  No  …/...  of 
29.10.2012 on the rules of application of Regulation (EU, Euratom) No 966/2012 of the 
European Parliament and of the Council on the financial rules applicable to the general 
budget  of  the  Union.  The  co-financing  programme  established  by  this  Regulation 
replaces the previous co-financing programme of the beneficiaries. Therefore, for the 
sake of legal certainty, Decision 716/2009/EC should be repealed. 

(19) 

In  order  to  promote  the  Union's  interests  in  the  fields  of  financial  reporting  and 
auditing and flexibly adapt to eventual governance and institutional changes in those 
fields,  the  power  to  adopt  acts  in  accordance  with  Article  290  of  the  Treaty  on  the 
Functioning of the European Union should be delegated to the Commission in respect 
of  selecting  new  beneficiaries  for  the  Programme.  It  is  of  particular  importance  that 
the  Commission  carry  out  appropriate  consultations  during  its  preparatory  work, 
including at expert level. The Commission, when preparing and drawing up delegated 
acts,  should  ensure  a  simultaneous,  timely  and  appropriate  transmission  of  relevant 
documents to the European Parliament and to the Council.  

(20)  Since the objectives of this Regulation cannot be sufficiently achieved by the Member 
States and can therefore, by reason of its scale and effects, be better achieved at Union 
level, the Union may adopt measures, in accordance with the principle of subsidiarity 
as  set  out  in  Article  5  of  the  Treaty  on  the  European  Union.  In  accordance  with  the 
principle  of  proportionality,  as  set  out  in  that  Article,  this  Regulation  does  not  go 
beyond what is necessary in order to achieve those objectives, 

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HAVE ADOPTED THIS REGULATION: 

Article 1 
Subject matter and scope 

1. 

2. 

1. 

2. 

A  Union  programme  (the  ‘Programme’)  is  hereby  established  for  the  period  from 
1 January 2014  to  31  December  2020  to  support  the  activities  of  bodies  which 
contribute  to  the  achievement  of  the  policy  objectives  of  the  Union  in  relation  to 
financial reporting and auditing. 

The  Programme  covers  the  activities  of  developing  or  providing  input  to  the 
development of standards, applying, assessing or monitoring standards or overseeing 
standard-setting processes in support of the implementation of Union policies in the 
field of financial reporting and auditing. 

Article 2 
Objectives 

The objective of the Programme is to improve the conditions for the functioning of 
the  internal  market  by  supporting  transparent  and  independent  development  of 
international financial reporting and auditing standards. 

This objective will be measured in particular through the number of countries using 
International  Financial  Reporting  Standards  (IFRS)  and  International  Standards  on 
Auditing (ISA). 

Article 3 
Beneficiaries of the Programme 

1. 

The following beneficiaries shall benefit under the Programme:  

(a) 

beneficiaries in the field of financial reporting: 

– 

– 

the European Financial Reporting Advisory Group (EFRAG); 

International  Financial  Reporting  Standards  Foundation 

the 
Foundation); 

(IFRS 

(b) 

beneficiary in the field of auditing: the Public Interest Oversight Board (PIOB). 

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12 

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2. 

3. 

The  Commission  shall  be  empowered  to  adopt  delegated  acts  in  accordance  with 
Article  9  to  select  new  beneficiaries  for  the  Programme  and  to  amend  paragraph  1 
accordingly.  

Any new beneficiary shall be a non-profit making legal person pursuing an objective 
forming  part  of  and  supporting  the  Union  policy  in  the  field  of  financial  reporting 
and  auditing  and  shall  be  a  direct  successor  of  one  of  the  beneficiaries  listed  in 
paragraph 1. 

Article 4 
Award of grants 

Financing under the Programme shall be provided in the form of operating grants.  

Article 5 
Transparency 

Any beneficiary of funding awarded under the Programme shall indicate in a prominent place, 
such  as  a  website,  a  publication  or  an  annual  report,  that  it  has  received  funding  from  the 
budget of the European Union. 

Article 6 
Financial provisions 

The financial envelope for the implementation of this Regulation over the period 2014-2020 
shall be EUR 58 010 000 in current prices.  

Article 7 
Implementation of the Programme 

1. 

2. 

1. 

The  Commission  shall  implement  the  programme  in  accordance  with  Regulation 
(EU,  Euratom)  No  966/2012  of  the  European  Parliament  and  of  the  Council  of  25 
October 2012 on the financial rules applicable to the general budget of the Union.  

In  order  to  implement  the  programme,  the  Commission  shall  adopt  annual  work 
programmes.  They  shall  set  out  the  objectives  pursued,  the  expected  results,  the 
method  of  implementation  and  their  total  amount.  They  shall  also  contain  a 
description  of  the  actions  to  be  financed,  an  indication  of  the  amount  allocated  to 
each action and an indicative implementation timetable. They shall include for grants 
the priorities, the essential evaluation criteria and the maximum rate of co-financing. 

Article 8 
Protection of the financial interest of the European Union 

The  Commission  shall  take  appropriate  measures  ensuring  that,  when  activities 
financed under this Regulation are implemented, the financial interests of the Union 
are  protected  through  the  application  of  preventive  measures  against  fraud, 
corruption  and  any  other  illegal  activities,  through  effective  checks  and,  if 

EN 

13 

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irregularities  are  detected,  through  the  recovery  of  the  amounts  wrongly  paid  and, 
where appropriate, effective, proportionate and deterrent penalties. 

2. 

The  Commission  or  its  representatives  and  the  Court  of  Auditors  shall  have  the 
power  of  audit,  on  the  basis  of  documents  and  on  the  spot,  over  all  grant 
beneficiaries,  contractors  and  subcontractors  who  have  received  Union  funds  under 
the Programme.  

The  European  Anti-fraud  Office  (OLAF)  may  carry  out  on-the-spot  checks  and 
inspections on economic operators concerned directly or indirectly by such funding 
in  accordance  with  the  procedures  laid  down  in  Regulation  (Euratom,  EC)  No 
2185/96 with a view to establishing whether there has been fraud, corruption or any 
other illegal activity affecting the financial interests of the Union in connection with 
a grant agreement or grant decision or a contract concerning Union funding.  

Without  prejudice  to  the  first  and  second  subparagraphs,  cooperation  agreements 
with  third  countries  and  international  organisations  and  grant  agreements  and  grant 
decisions  and  contracts  resulting  from  the  implementation  of  this  Regulation  shall 
expressly  empower  the  Commission,  the  Court  of  Auditors  and  OLAF  to  conduct 
such audits, on-the-spot checks and inspections. 

EN 

14 

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1. 

2. 

3. 

4. 

5. 

1. 

Article 9 
Exercise of the delegation 

The  power  to  adopt  delegated  acts  is  conferred  on  the  Commission  subject  to  the 
conditions laid down in this Article.  

The  power  to  adopt  delegated  acts  referred  to  in  Article  3(2)  shall  be  conferred  on 
the Commission  for  a  period  of  7  years  from  the  date  of  entry  into  force  of  this 
Regulation.  

The delegation of power referred to in Article 3(2) may be revoked at any time  by 
the European Parliament or by the Council. A decision to revoke shall put an end to 
the  delegation  of  the  power  specified  in  that  decision.  It  shall  take  effect  the  day 
following  the  publication  of  the  decision  in  the  Official  Journal  of  the  European 
Union  or  at  a  later  date  specified  therein.  It  shall  not  affect  the  validity  of  any 
delegated acts already in force. 

As soon as it adopts a delegated act, the Commission shall notify it simultaneously to 
the European Parliament and to the Council. 

A  delegated  act  adopted  pursuant  to  Article  3(2)  shall  enter  into  force  only  if  no 
objection  has  been  expressed  either  by  the  European  Parliament  or  the  Council 
within a period of two months of notification of that act to the European Parliament 
and the Council or if, before the expiry of that period, the European Parliament and 
the  Council  have  both  informed  the Commission  that  they  will  not  object.  That 
period shall be extended by two months at the initiative of the European Parliament 
or of the Council. 

Article 10 
Evaluation 

No  later  than  six  months  before  the  end  of  the  Programme,  the  Commission  shall 
submit  to  the  European  Parliament  and  the  Council  a  report  on  the  achievement  of 
the Programme's objectives. That report shall appraise at least the overall pertinence 
and  coherence  of  the  Programme,  the  effectiveness  of  its  execution  and  the  overall 
and  individual  effectiveness  of  the  beneficiaries'  work  programme  in  terms  of 
achievements of the objectives as set out in Article 2. 

2. 

The report shall be forwarded to the European Economic and Social Committee for 
information. 

Decision 716/2009/EC shall be repealed with effect from 1 January 2014. 

Article 11 
Repeal 

EN 

15 

   EN 

Article 12 
Entry into force 

This Regulation shall enter into force on the twentieth day following that of its publication in 
the Official Journal of the European Union. 

This Regulation shall be binding in its entirety and directly applicable in all Member States. 

Done at Brussels,  

For the European Parliament 
The President 

For the Council 
The President 

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LEGISLATIVE FINANCIAL STATEMENT 

1. 

FRAMEWORK OF THE PROPOSAL/INITIATIVE 

1.1. 

Title of the proposal/initiative  

Proposal  for  a  Regulation  of  the  European  Parliament  and  of  the  Council  on 
establishing a Union programme to support specific activities in the field of financial 
reporting and auditing for the period of 2014-2020 

1.2. 

Policy area(s) concerned in the ABM/ABB structure17  

Policy Area: 12 Internal Market 

Activity: Financial services and capital markets  

1.3. 

Nature of the proposal/initiative  

(cid:133) The proposal/initiative relates to a new action  

(cid:133)  The  proposal/initiative  relates  to  a  new  action  following  a  pilot  project/preparatory 
action18  

X The proposal/initiative relates to the extension of an existing action  

(cid:133) The proposal/initiative relates to an action redirected towards a new action  

1.4. 

Objectives 

1.4.1.  The  Commission's  multiannual 

strategic  objective(s) 

targeted  by 

the 

proposal/initiative  

Promote the global adoption of IFRS  

Ensure the EU's weight in influencing the formation of IFRS  

Contribute to the independence of audit standard settings' public oversight 

1.4.2. 

Specific objective(s) and ABM/ABB activity(ies) concerned  

Specific  objective:  To  improve  the  conditions  for  the  functioning  of  the  internal 
market  by  supporting  transparent  and  independent  development  of  international 
financial reporting and auditing standards. 

ABM/ABB activity(ies) concerned:  

12.03 Financial services and capital markets 

17 
18 

ABM: Activity-Based Management – ABB: Activity-Based Budgeting. 
As referred to in Article 49(6)(a) or (b) of the Financial Regulation. 

EN 

17 

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1.4.3.  Expected result(s) and impact 

Specify the effects which the proposal/initiative should have on the beneficiaries/groups targeted. 

Increase the financial independence of the beneficiaries (IFRS Foundation, EFRAG, 
PIOB) 

Equip EFRAG with the necessary resources to carry out its European public interest 
mission 

1.4.4. 

Indicators of results and impact  

Specify the indicators for monitoring implementation of the proposal/initiative. 

Result indicator 

Latest known result 

Target  

Number of countries using IFRS 

In  2012  approximately  120 
countries use IFRS.  

Increase by 2020 

Percentage 
standards 
of 
endorsed in the EU compared to 
the  number  of  standards  issued 
by the IASB by 2020 

On  29  October  2012,  89%  of 
IFRSs  was  endorsed  in  the  EU 
(124 standards out of 139).  

100% by 2020 

Number  of  EU  countries  using 
ISAs  

As  of  end-2012,  20  Member 
States  have  fully  endorsed  the 
clarified ISAs 

Adoption  and  implementation 
of  high  quality  ISAs  in  all 
Member  States  not  later  than 
2020 

1.5. 

Grounds for the proposal/initiative  

1.5.1.  Requirement(s) to be met in the short or long term  

Raising  the  independence  (also  the  perceived  independence)  of  beneficiaries  in  the 
field of financial reporting and audit to enable them to carry out their public interest 
mission in a satisfactory manner 

1.5.2.  Added value of EU involvement 

The  main  goal  of  the  programme  is  to  ensure  comparability  and  transparency  of 
company  accounts  throughout  the  EU  and  globally,  thereby  contributing  to  the 
smooth functioning of the capital markets at EU and global level. 

The EU is the largest jurisdiction applying IFRS (Regulation 1606/2002). It is in our 
interest  to  make  international  accounting  standards  (IFRS)  the  global  accounting 
language  and  to  ensure  the  EU  representation  at  the  public  oversight  of  the  IFRS 
Foundation (where membership in the oversight body will be tied to contribution to 
funding).  

Also  significant,  credible  and  independent  technical  upstream  European  input  is 
essential  at  the  development  of  those  standards.  EFRAG  is  responsible  for  those 
activities. 

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The  EU  may  adopt  International  Standards  on  Auditing  (ISAs)  based  on  Directive 
2006/43. It has therefore a direct interest in ensuring that those standards are of high 
quality  and  the  due  process  of  their  adoption  is  subject  to  independent  public 
oversight by the PIOB. 

1.5.3.  Lessons learned from similar experiences in the past 

The current financing has been successful so far in meeting the expectations 

1.5.4.  Coherence and possible synergy with other relevant instruments 

The European Commission is actively participating in the governance reforms of the 
beneficiaries 

1.6. 

Duration and financial impact  

X Proposal/initiative of limited duration  

–  X  Proposal/initiative in effect from 01/01/2014 to 31/12/2020  

–  (cid:133)  Financial impact from YYYY to YYYY  

(cid:133) Proposal/initiative of unlimited duration 

–  Implementation with a start-up period from YYYY to YYYY, 

–  followed by full-scale operation. 

1.7.  Management mode(s) envisaged19  

X Centralised direct management by the Commission  

(cid:133)  Centralised  indirect  management  with  the  delegation  of  implementation  tasks 
to: 

–  (cid:133)  executive agencies  

–  (cid:133)  bodies set up by the Communities20  

–  (cid:133)  national public-sector bodies/bodies with public-service mission  

–  (cid:133)  persons entrusted with the implementation of specific actions pursuant to Title 
V of the Treaty on European Union and identified in the relevant basic act within 
the meaning of Article 49 of the Financial Regulation  

(cid:133) Shared management with the Member States  

(cid:133) Decentralised management with third countries  

19 

20 

Details  of  management  modes  and  references  to  the  Financial  Regulation  may  be  found  on  the 
BudgWeb site: http://www.cc.cec/budg/man/budgmanag/budgmanag_en.html 
As referred to in Article 185 of the Financial Regulation. 

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(cid:133) Joint management with international organisations (to be specified) 

If more than one management mode is indicated, please provide details in the "Comments" section. 

Comments  

2. 

MANAGEMENT MEASURES  

2.1.  Monitoring and reporting rules  

Specify frequency and conditions. 

In the case of the IFRS Foundation: interim and final reports 

In the case of EFRAG: final reports and participation of the Commission services in 
all committees of EFRAG 

In the case of the PIOB: final reports and regular feedback to the Monitoring Group 

2.2.  Management and control system  

2.2.1.  Risk(s) identified  

There  is  a  risk  of  not  achieving  the  operational  objectives  if  the  quality  of  the 
beneficiaries'  output  is  not  in  accordance  with  the  initial  objectives  as  described  in 
the annual proposals 

There  is  a  risk  of  threat  to  the  EU  financial  interests/reputation  if  Commission's 
services fail to identify ineligible expenditure 

2.2.2.  Control method(s) envisaged  

Risk of not achieving operational objectives: 

–  Beneficiaries  are  requested  to  submit  an  annual  report,  in  accordance  with  the 
individual  objectives  of  each  programme  and  in  line  with  the  guidelines  of 
Regulation (EU, Euratom) No  966/2012 of 25  October  2012,  on  the  financial  rules 
applicable to the general budget of the European Union 

– The operational units responsible within DG MARKT have regular contacts with 
the beneficiaries and in particular, participate in all committees of EFRAG 

Risk of threat to the EU Financial interests: 

–  Controls  of  grant  commitments  and  payments  in  DG  MARKT  follow  the 
reinforced  financial  circuit  and  comprise  desk  checks  of  relevant  supporting 
documents,  including  interim  and  final  reports,  audited  accounts  and  specific 
documents requested by the DG. These controls are documented in checklists that are 
systematically filled in by all actors involved in the respective financial transactions 
(OIA,OVA,OVA2,FIA,  FVA,  FVA2,  AO),  including  controls  carried  out  by  the 
DG's  financial  unit  on  financial  and  legal  matters  in  order  to  deliver  the  "Bon  à 
Payer" 

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–  The  DG's  financial  unit  systematically  carries  out  on-the-spot  controls  on  each 
beneficiary with substantive testing of a sample of transactions with an aim to assess 
the  beneficiary's  financial  and  internal  control  system  and  to  provide  the  AO  with 
additional assurance on the sufficient protection of the EU financial interests 

The maximum error rate would remain below 2% 

The cost of the controls would be around 0.5 FTE or 63.500€ per year. 

The  benefit  of  the  controls  would  be  100%  of  the  annual  granted  amount  spent 
adequately and following the sound financial management principle. 

2.3.  Measures to prevent fraud and irregularities  

Specify existing or envisaged prevention and protection measures. 

Reinforced  financial  circuits  with  both  an  ex-ante  operational  and  financial 
verification  

Regular analysis of the beneficiaries' accounts, annual reports and audit certificates  

On-the-spot regular audits to verify budgetary systems and controls 

3. 

ESTIMATED FINANCIAL IMPACT OF THE PROPOSAL/INITIATIVE  

3.1. 

Heading(s)  of  the  multiannual  financial  framework  and  expenditure  budget 
line(s) affected  

•  Existing expenditure budget lines21 

In order of multiannual financial framework headings and budget lines. 

Budget line 

Type of  
expenditure

Contribution  

Diff./non-
diff. 
(22) 

from 
EFTA23 
countries 

from 
candidate 
countries24 

from third 
countries 

within the 
meaning of Article 
18(1)(aa) of the 
Financial 
Regulation  

Diff 

NO 

NO 

NO 

NO 

Standards  in  the  fields  of  financial  reporting 
and auditing25 

•  New budget lines requested: N/A. 

Heading of 
multiannual 
financial 
framework 

Number  
Description 

12.0301 

1 

21 

22 
23 
24 
25 

Budget line 12.0301 indicated below relates to new nomenclature for MFF 2014-2020. It corresponds to 
the budget line 12.0401 in MFF 2007-2013. 
Diff. = Differentiated appropriations / Non-diff. = Non-Differentiated Appropriations 
EFTA: European Free Trade Association.  
Candidate countries and, where applicable, potential candidate countries from the Western Balkans. 
The budget line is indicative and could be changed following the annual procedure' 

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3.2. 

Estimated impact on expenditure  

3.2.1. 

Summary of estimated impact on expenditure  

Heading of multiannual financial 
framework:  

Number:1 

Heading Smart and Inclusive Growth 

EUR million in current prices (to 3 decimal places) 

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DG MARKT 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

2021 

TOTAL 

(cid:121) Operational appropriations  

12.0301 
IFRS Foundation 

12.0301 
EFRAG 

12.0301 
PIOB 

Commitments 

Payments 

Commitments 

Payments 

Commitments 

Payments26 

(1) 

(2) 

(1a) 

(2a) 

(1a) 

(2a) 

4.335 

4.422 

4.510 

4.600 

4.692 

4.786 

4.882 

0 

32.227 

3.251 

4.400 

4.488 

4.578 

4.669 

4.763 

4.858 

1.220 

31.007 

3.162 

3.225 

3.290 

3.356 

3.423 

3.491 

3.561 

0 

23.508 

2.372 

3.209 

3.274 

3.339 

3.406 

3.474 

3.543 

0.891 

22.617 

0.306 

0.312 

0.318 

0.325 

0.331 

0.338 

0.345 

0 

0.000 

0.306 

0.312 

0.318 

0.325 

0.331 

0.338 

0.345 

2.275 

1.930 

Appropriations of an administrative nature 
financed  from  the  envelope  for  specific 
programmes27  
Number  of  budget 
line 

(3) 

TOTAL 
appropriations 
for DG MARKT 

Commitments 

Payments 

=1+1
a+3 

=2+2
a+3 

0 

0 

0 

0 

0 

0 

0 

0 

7.803 

7.959 

8.118 

8.281 

8.446 

8.615 

8.788 

0 

58.010 

5.623 

7.915 

8.074 

8.235 

8.400 

8.568 

8.739 

2.456 

55.554 

TOTAL  operational 
appropriations  

Commitments 

(4) 

7.803 

7.959 

8.118 

8.281 

8.446 

8.615 

8.788 

0 

58.010 

Payments 

(5) 

5.623 

7.915 

8.074 

8.235 

8.400 

8.568 

8.739 

2.456 

55.554 

TOTAL 
an 
appropriations 
administrative  nature  financed  from 
the 
specific 
programmes  

envelope 

for 

of 

(6) 

0 

0 

0 

0 

0 

0 

0 

0 

TOTAL 
appropriations  
under HEADING 
<1> 
of the multiannual 
financial 
framework 

TOTAL 
appropriations  
under HEADINGS 
1 to 4 
of the multiannual 
financial framework 
(Reference amount) 

Commitments 

=4+ 6 

7.803 

7.959 

8.118 

8.281 

8.446 

8.615 

8.788 

0 

58.010 

Payments 

=5+ 6 

5.623 

7.915 

8.074 

8.235 

8.400 

8.568 

8.739 

2.456 

55.554 

Commitments 

=4+ 6 

7.803 

7.959 

8.118 

8.281 

8.446 

8.615 

8.788 

0 

58.010 

Payments 

=5+ 6 

5.623 

7.915 

8.074 

8.235 

8.400 

8.568 

8.739 

2.456 

55.554 

26 

27 

The payments to the PIOB will be made without pre-payments and in a single operation the following 
year 
Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU 
programmes and/or actions (former "BA" lines), indirect research, direct research. 

EN 

23 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
Heading of multiannual 
financial framework:  

5 

" Administrative expenditure " 

EUR million (to 3 decimal places) 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

TOTAL 

DG: MARKT 

(cid:121) Human resources  

0.548 

0.548 

0.548 

0.548 

0.548 

0.548 

0.548 

(cid:121) Other administrative expenditure  

0.025 

0.025 

0.025 

0.025 

0.025 

0.025 

0.025 

TOTAL DG MARKT 

Appropriations  

0.573 

0.573 

0.573 

0.573 

0.573 

0.573 

0.573 

3.836 

0.175 

4.011 

TOTAL appropriations 
under HEADING 5 
of the multiannual 
financial framework  

(Total 
commitments  
= 
payments) 

Total 

0.573 

0.573 

0.573 

0.573 

0.573 

0.573 

0.573 

4.011 

EUR million (to 3 decimal places) 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

TOTAL 

Commitments 

8.376 

8.532 

8.691 

8.854 

9.019 

9.188 

9.361 

62.021 

Payments 

6.196 

8.488 

8.647 

8.808 

8.973 

9.141 

9.312 

59.565 

TOTAL appropriations  
under HEADINGS 1 to 
5 
of the multiannual 
financial framework  

3.2.2.  Estimated impact on operational appropriations  

–  (cid:133)  The proposal/initiative does not require the use of operational appropriations  

–  X  The  proposal/initiative  requires  the  use  of  operational  appropriations,  as 

explained below: N/A (operating grants) 

3.2.3.  Estimated impact on appropriations of an administrative nature 

3.2.3.1.  Summary  

–  (cid:133)  The  proposal/initiative  does  not 

require 

the  use  of  administrative 

appropriations  

–  X  The  proposal/initiative  requires  the  use  of  administrative  appropriations,  as 

explained below: 

EN 

24 

   EN 

 
 
 
 
 
 
EUR million (to 3 decimal places) 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

TOTAL 

HEADING 5 
of the multiannual 
financial framework 

Human resources  

0.548 

0.548 

0.548 

0.548 

0.548 

0.548 

0.548 

3.836 

0.025 

0.025 

0.025 

0.025 

0.025 

0.025 

0.025 

0.175 

0.573 

0.573 

0.573 

0.573 

0.573 

0.573 

0.573 

4.011 

Other administrative 
expenditure  

Subtotal HEADING 5 
of the multiannual 
financial framework  

Outside HEADING 528 
of the multiannual 
financial framework  

Human resources  

Other expenditure  
of an administrative 
nature 

Subtotal  
outside HEADING 5 
of the multiannual 
financial framework  

TOTAL 

0.573 

0.573 

0.573 

0.573 

0.573 

0.573 

0.573 

4.011

3.2.3.2.  Estimated requirements of human resources 

–  (cid:133)  The proposal/initiative does not require the use of human resources  

–  X  The  proposal/initiative  requires  the  use  of  human  resources,  as  explained 

below: 

Estimate to be expressed in full time equivalent units (or at most to one decimal place) 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

(cid:121) Establishment plan posts (officials and temporary agents) 

XX 01 01 01 (Headquarters and Commission’s 
Representation Offices) 

XX 01 01 02 (Delegations) 

XX 01 05 01 (Indirect research) 

4.125 

4.125 

4.125 

4.125 

4.125 

4.125 

4.125 

28 

Technical  and/or  administrative  assistance  and  expenditure  in  support  of  the  implementation  of  EU 
programmes and/or actions (former "BA" lines), indirect research, direct research. 

EN 

25 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
10 01 05 01 (Direct research) 

(cid:121) External personnel (in Full Time Equivalent unit: FTE)29 

XX 01 02 01 (CA, INT, SNE from the "global 
envelope") 

XX 01 02 02 (CA, INT, JED, LA and SNE in 
the delegations) 

XX 01 04 yy 30 

- at Headquarters31 

- in delegations  

XX 01 05 02 (CA, INT, SNE - Indirect 
research) 

10 01 05 02 (CA, INT, SNE - Direct research) 

Other budget lines (specify) 

TOTAL 

0.375 

0.375 

0.375 

0.375 

0.375 

0.375 

0.375 

4.5 

4.5 

4.5 

4.5 

4.5 

4.5 

4.5 

XX is the policy area or budget title concerned. 

The human resources required will be met by staff from the DG who are already assigned to 
management of the action and/or have been redeployed within the DG, together if necessary 
with any additional allocation which may be granted to the managing DG under the annual 
allocation procedure and in the light of budgetary constraints. 

Description of tasks to be carried out: 

Officials and temporary agents 

5  AD  and  6  AST  officials,  prorated  on  number  of  files  dealt  with.  Tasks:  initiating 
agents' tasks, verifying agents' tasks, keeping contact with the beneficiary, supervision. 

External personnel 

1 contract agent, prorated on number of files dealt with. Tasks: recording, support the 
planning and preparation of missions. 

29 

30 
31 

CA= Contract Agent; INT= agency staff ("Intérimaire"); JED= "Jeune Expert en Délégation" (Young 
Experts in Delegations); LA= Local Agent; SNE= Seconded National Expert;  
Under the ceiling for external personnel from operational appropriations (former "BA" lines). 
Essentially  for  Structural  Funds,  European  Agricultural  Fund  for  Rural  Development  (EAFRD)  and 
European Fisheries Fund (EFF). 

EN 

26 

   EN 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
                                                 
3.2.4.  Compatibility with the multiannual financial framework  

–  X  Proposal/initiative  is  compatible  with  the  proposal  for  the  new  multiannual 

financial framework 2014-2020  

–  (cid:133)  Proposal/initiative  will  entail  reprogramming  of  the  relevant  heading  in  the 

multiannual financial framework. 

Explain what reprogramming is required, specifying the budget lines concerned and the corresponding 
amounts. 

–  (cid:133)  Proposal/initiative requires application of the flexibility instrument or revision 

of the multiannual financial framework32. 

Explain what is required, specifying the headings and budget lines concerned and the corresponding 
amounts. 

3.2.5.  Third-party contributions  

–  The proposal/initiative does not provide for co-financing by third parties  

–  The proposal/initiative provides for the co-financing estimated below: 

Appropriations in EUR million (to 3 decimal places) 

2014 

2015 

2016 

2017 

2018 

2019 

2020 

Total 

24.873 

27.576 

30.278 

32.977 

35.674 

38.370 

41.064 

230.813 

4.338 

4.675 

4.910 

5.044 

5.277 

5.409 

5.439 

35.093 

1.084 

1.106 

1.128 

1.151 

1.174 

1.197 

1.221 

8.061 

30.295 

33.357 

36.316 

39.172 

42.126 

44.976 

47.724 

273.967 

IFRS  Foundation  with  its  own 
funds  and  with  funds  received 
from third parties 

(Beneficiary  average  co-finance 
87%) 

EFRAG  with  its  own  funds  and 
with  funds  received  from  third 
parties 
(Beneficiary average co-finance 
60%) 

PIOB  with  its  own  funds  and 
with  funds  received  from  third 
parties 
(Beneficiary average co-finance 
78%) 
TOTAL appropriations 
co-financed  

3.3. 

Estimated impact on revenue  

–  X  Proposal/initiative has no financial impact on revenue. 

–  (cid:133)  Proposal/initiative has the following financial impact: 

– 

– 

(cid:133) 

(cid:133) 

on own resources  

on miscellaneous revenue  

32 

See points 19 and 24 of the Interinstitutional Agreement. 

EN 

27 

   EN