REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the activities of the IFRS Foundation, EFRAG and PIOB in 2019
Date: 2020-12-14
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: EU financing, EU office or agency, EU programme, audit, financial accounting, financial control, foundation, international standard, standardised accounting system

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 14.12.2020  COM(2020) 807 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the activities  of the IFRS Foundation, EFRAG and PIOB in 2019     
 
 
PURPOSE AND SCOPE OF THE REPORT 

1. 
Pursuant  to  Regulation  No  258/20141  of  the  European  Parliament  and  of  the  Council, 
amended by Regulation 2017/8272, the European Union co-finances three organisations active 
in  the  field  of  financial  reporting  and  auditing:  the  International  Financial  Reporting 
Standards Foundation (IFRS Foundation), the European Financial Reporting Advisory Group 
(EFRAG),  and  the  Public  Interest  Oversight  Board  (PIOB).  The  co-financing  programme 
takes the form of operating grants. 

The purpose of this report required by Article 9 (3) of the Regulation is to report on the latest 
developments linked to the activities of these three bodies in 20193. However, certain events 
that took place in 2020 are also described where deemed useful for the purpose of this report 
(e.g.  new  challenges  that  have  emerged  as  part  of  the  European  Action  Plan  on  Financing 
Sustainable Growth (2018) or in the context of the COVID-19 global pandemic).  

As  a  follow-up  of  the  Stolojan4  report  and  as  mentioned  in  Recital  (9)  of  the  Regulation 
amending Regulation  No 258/2014,  this report also  provides a Commission’s assessment of 
the  governance  of  these  three  bodies,  in  particular  on  the  prevention  of  conflict  of  interest, 
transparency,  diversity  of  experts,  diversity  of  funding,  public  accountability  and  public 
access to documents.  

1.1. 

STRUCTURE OF THE REPORT 

The Report is structured as follows: 

  Section 2: International Financial Reporting Standards Foundation - provides an 

overview of the IFRS Foundation’s activities and its governance in 2019;  

  Section 3: European Financial Reporting Advisory Group - provides an overview 

of EFRAG’s activities and its governance in 2019; 

  Section 4: Public Interest Oversight Board - provides an overview of the PIOB’s 

activities and its governance in 2019; 

  Section 5: Conclusions as regards the relevance of the funding programme. 

1 OJ, L 105, 8.4.2014, p.1. 
2 OJ, L 129, 19.5.2017, p.24. 
3 Last appraisal of the Programme was included as Annex 3 to the annual 2019 Report related to the activities of  the IFRS 
Foundation, EFRAG and PIOB in 2018, 29.10.2019, COM/2019/549 final. 
4 A8-0172/2016 Report on International Accounting Standards (IAS) evaluation and the activities of the International 
Financial Reporting Standards (IFRS) Foundation, the European Financial Reporting Advisory Group (EFRAG) and the 
Public Interest Oversight Board (PIOB). 

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2. 

INTERNATIONAL FINANCIAL REPORTING STANDARDS FOUNDATION 

2.1. 

OVERVIEW OF IFRS ACTIVITIES 

2.1.1.  STANDARD SETTING  

In  September  2019,  the  International  Accounting  Standards  Board  (IASB)  completed  the 
Phase 1 of the project  “IBOR Reform and its Effects on Financial Reporting” by publishing 
amendments  to  International  Financial  Reporting  Standards  (IFRS)  9  Financial  Instruments 
and  its  predecssor  International  Accounting  Standards  (IAS)  39  Financial  Instruments: 
Recognition  and  Measurement.  The  main  objective  was  to  address  the  consequences  on  the 
accounting treatment of existing hedging relationships prior to the actual replacement of the 
benchmark rates. Subsequently, the  IASB issued the Phase 2 of the project in August 2020. 
The objective of IBOR Phase 2 is to prevent that IFRS would trigger unwarranted accounting 
consequences  upon  the  actual  replacement  of  the  benchmark  interest  rates  for  hedge 
accounting in particular. 

In  2019,  the  IASB  prepared  amendments  to  IFRS  17  Insurance  Contracts,  which  were 
adopted in June 2020. These amendments  aim to  reduce the costs of implementation  and to 
make  it  easier  for  companies  to  explain  the  results  of  applying  IFRS  17  to  investors  and 
others.  In  this  context,  the  IASB  decided  to  postpone  the  effective  date  of  IFRS  17  from  1 
January  2021  to  1  January  2023  and  to  extend  the  optional  deferral  of  IFRS  9  Financial 
Instruments granted to the insurance industry.  

Since March 2020, the COVID-19 global pandemic has led to a public health emergency and 
a corresponding lockdown of many parts of the global economy. As a result, the IASB and its 
staff commenced to support stakeholders by responding to COVID-19-related questions about 
applying  IFRS  standards,  by  providing  specific  accounting  relief,  and  by  adjusting  the 
Board’s  work  plan  including  postpone  less  critical  consultations.  One  example  is  the 
amendment to  IFRS 16 Leases to facilitate the accounting by entities for COVID-19-related 
lease concessions such as rental holidays and temporary rent reductions. 

A complete overview of the IASB standard-setting activities, including the work of the IFRS 
Interpretations  Committee  (IFRIC),  and  ongoing  endorsement  procedures  is  outlined  in 
Appendix 1 of this report.  

Finally, the IFRS Foundation updated the IFRS taxonomy in order to reflect the implications 
of new standards and amendments5. 

5 The financing provided by the European Union also supports the timely update of the IFRS taxonomy which in turn serves 
as an input to the European Single Electronic Format.   

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2.1.2.  RESEARCH PROJECTS 

The 2017-2021 work plan of the IASB aims at improving and supporting existing standards, 
promoting better communication and supporting implementation. In 2019, with regards to its 
"Better Communication" project, the IASB completed technical discussions and published the 
exposure draft General Presentation and Disclosures in December – proposing improvements 
to the structure and content of the Primary Financial Statements with a focus on the statement 
of financial performance. 

The  IASB  also  continued  the  research  project  on  extractive  activities  to  consider  a  possible 
replacement of IFRS 6 Exploration for and Evaluation of Minerals Resources. 

As part of its follow-up of the post-implementation review of IFRS 3 Business Combination, 
the  Board  explored  possible  simplifications  to  the  accounting  for  goodwill  and  targeted 
improvements to the impairment test and issued a discussion paper in Q1 2020.  

The IASB started in 2019 the post-implementation review of IFRS 10 Consolidated Financial 
Statements,  IFRS  11  Joint  Arrangements  and  IFRS  12  Disclosures  of  Interests  in  Other 
Entities. 

2.1.3.  COMPREHENSIVE REVIEW OF THE IFRS FOR SMES STANDARD 

In  2019,  the  IASB  commenced  the  second  Comprehensive  Review  of  the  IFRS  for  SMEs 
Standard  with  a  view  to  align  the  IFRS  for  SMEs  Standard  with  the  full  IFRS  standards 
without  causing  undue  cost  and  effort  for  SMEs.  In  January  2020,  the  IASB  published  a 
request for information. 

2.2. 

GENERAL PRINCIPLES AGAINST WHICH NEW STANDARDS HAVE BEEN DEVELOPED 

2.2.1.  GENERAL PRINCIPLES 

The due process principles on the IASB and IFRIC standard setting are laid down in the Due 
Process Handbook. Its application is overseen by a dedicated committee of Trustees known as 
the Due Process Oversight Committee (DPOC). In 2019, the DPOC continued its review of 
the  Due  Process  Handbook  with  the  aim  to  increase  the  effectiveness  of  standards.  The 
revised Handbook was published in August 2020. One new principle is that the IASB should 
in the future publish explanatory material in order to address implementation questions arising 
from an issued standard before its application date.  

Tthe revised Due Process Handbook states that the IASB’s effects analyses should focus on 
the improvements to  financial reporting taking into account the implementation costs, while 
also considering how increased transparency may affect financial stability. It also embeds the 
effects’  analysis  throughout  the  standard  setting  process.  As  regards  the  broader  economic 
impacts of new financial reporting requirements, the amendments highlight that quantitative 
assessments  are  generally  impracticable  but  that  the  IASB  may  assess  specific  economic 

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effects where relevant. The revised version does not fully meet the expectation expressed by 
the  European  Commission  as  a  member  of  the  Monitoring  Board  as  it  may  not  sufficiently 
bridge  the  gap  between  the  limited  scope  of  the  IASB’s  impact  assessment  and  the 
endorsement criteria of the European Public Good set out in the IAS Regulation.  

2.3. 

GOVERNANCE, INTEGRITY AND ACCOUNTABILITY 

2.3.1.  OVERVIEW 

The IFRS Foundation is a non-profit corporation under the General Corporation Law of the 
state  of  Delaware  (United  States)  and  operates  in  the  United  Kingdom  as  an  overseas 
company. 

The  IFRS  Foundation  is  governed  by  a  Board  of  22  Trustees  collectively  responsible  for 
general oversight and appointments to the IASB. In 2019, the Trustees met three times. The 
Trustees  designation  is  subject  to  an  apportionment  by  geographical  origin  and  to  prior 
approval  by  the  Monitoring  Board,  which  is  designed  to  provide  a  link  with  Public 
Authorities. The European Commission is member of the Monitoring Board. The Monitoring 
Board met twice in 2019. The IASB consists of 14 members appointed by the Trustees subject 
to  geographical  balance  requirements as well.  IASB members are nominated for a five-year 
term,  renewable  once.  The  IASB  is  responsible  for  the  standard  setting.  It  held  13  board 
meetings during 2019. The Trustees also appoint the 14 members of the IFRIC dedicated to 
interpreting the application of IFRS Standards and providing guidance on financial reporting 
issues.  Additionally,  the  IFRS  Advisory  Council  provides  a  forum  for  participation  by 
organizations  and  individuals.  Its  members  are  also  appointed  by  the  Trustees  and  shall  be 
consulted by the Board on decisions pertaining to major projects. 

2.3.2.  TRANSPARENCY RULES 

In principle, all meetings of the IASB and IFRIC are open to the public. The meeting agendas 
are published in advance and the meetings themselves can be viewed by webcast. 

With  regard  to  transparency  registers,  the  IFRS  Foundation  introduced  a  stakeholder 
engagement register for IASB Board members in August 2019. It is published quarterly on its 
website6  and  lists  meetings  with  stakeholders.  The  first  report  was  published  in  December 
2019. 

2.3.3.  REPRESENTATION OF STAKEHOLDERS 

Following  the  2015  "Trustees'  Review  of  Structure  and  Effectiveness",  the  geographical 
distribution of the Trustees should be representative of the world’s capital markets and subject 

6 Please see the following link: https://www.ifrs.org/groups/international-accounting-standards-board/pages/board-member-
external-engagement . 

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to geographical balance requirement to maintain equal representation between America, Asia-
Oceania and Europe.  

The IFRS Foundation constitution requires the appointment of six Trustees from each of the 
three  regions  plus  one  Trustee  from  Africa  and  three  Trustees  from  any  area  subject  to 
maintaining an overall geographical  balance. Similary, the criteria for appointment as board 
member of the IASB require four members from each region, one member from  Africa and 
one member from any area.  

There were three new appointments of Trustees of the IFRS Foundation on 01 January 2019 
(Mrs Sarah J. Al Suhaimi [Other]; Mr Dr Suresh Kana [Africa] and Mr Kazyyuki Masu [Asia-
Oceania]) and one reappointment (Mr Guillermo Babatz [Americas]).  

As  at  31  December  2019,  the  IFRS  Advisory  Council  comprised  51  organizations  with  50 
individual members. The European Commission participates as an observer. In addition, the 
European Central  Bank  (ECB) and European Securities and  Markets  Authority (ESMA) are 
also members of the IFRS Advisory Council. 

2.3.4.  ACCOUNTABILITY TOWARDS THE EUROPEAN PARLIAMENT 

A full account of the development of IFRS has to be submitted to the European Parliament as 
part of the 2017/827 Regulation7. The annual exchange of views between the Committee on 
Economic  and  Monetary  Affairs  (ECON)  of  the  European  Parliament  and  Mr  Hoogervorst, 
Chair of the IASB and Mr Liikanen, Chair of the IFRS Foundation's Trustees, took place on 
on 26 February 2019 and  on 18 February 2020. 

2.3.5.  PREVENTION OF CONFLICT OF INTERESTS 

The  Trustees  of  the  IFRS  Foundation  are  appointed  for  a  three  years  term  renewable  once, 
and must commit to act in the public interest. Following a request from the Monitoring Board, 
a  revised  conflict  of  interest  policy  was  adopted  in  2018.  It  introduces  the  principle  that  a 
Trustee  and  a  Monitoring  Board  Member  cannot  be  employed  by  the  same  organization. 
However,  it  also  empowers  the  Chair  of  the  Trustees  to  derogate  from  this  principle  in 
exceptional circumstances. 

Only one member of the IASB is a part-time member. Full-time Board members are required 
by the IFRS Foundation constitution to sever all employment relationships and ties that might 
affect their independence. Neither secondment from an employer nor rights to reintegrate with 
the former employer are allowed. 

2.3.6.  BREAKDOWN OF FUNDING 

The  IFRS  Foundation  received  a  EUR  4,7  million  grant  from  the  European  Union  in  2019, 
representing  20,7%  of  the  total  funding  received.  According  to  the  breakdown  of  the  IFRS 

7   Recital 7 

5 

 
 
                                                           
Foundation,  the  EU  was  the  largest  contributor,  ahead  of  the  international  accounting  firms 
with 19,8% in 2019. 

The downward trend in contribution of the IFRS Foundation in recent years has continued in 
2019.  The  reported  contributions  were  down  by  10,8%  in  2019  (10,6%  after  taking  into 
account  the  impact  of  exchange  rate  fluctuations).  The  most  significant  decreases  in 
contribution were observed in South Africa (-95%), Spain (-71%), Hong Kong (-67%), Brasil 
(-48%),  the  United  States8  (-34%),  the  international  audit  networks  (-30%),  Switzerland  (-
19%) and Germany (-9%). A breakdown of funding by main geographical areas is outlined in 
Appendix 2. It clearly shows that despite an equal representation of the EU and the US at the 
Board  of  Trustees  (six  Trustees  each)  and  the  IASB  (four  board  members  each),  the  area 
“Americas”  only  contributes  up  to  5,1%  of  the  Foundation’s  funding,  whereas  the  EU  and 
Asia-Oceania made respectively 38,5% and 33,5% of total contributions. The relative share of 
the EU budget and Member States went  up compared to 2018 (from 35,8% to 38,5%). The 
decrease  in  the  reported  contributions  from  international  audit  networks  was  partially  offset 
by a commercial arrangement resulting in increased licensing revenues.  

The IFRS Foundation reported a net surplus of GBP 3,8 million. The total retained surplus as 
at 31 December 2019 amounted to GBP 38,1 million.  

3. 

EUROPEAN FINANCIAL REPORTING ADVISORY GROUP  

3.1. 

EFRAG ACTIVITIES OVERVIEW  

EFRAG’s work can be divided in three main categories: 

-  The primary role of EFRAG remains to advise the European Commission as to  whether 
new or revised IFRS standards meet the endorsement critera set by the IAS Regulation on 
the application of International Accounting Standards. These criteria include meeting the 
requirements  of  a  ‘true  and  fair  view’,  and  of  the  European  public  good.  Field  tests, 
studies,  impact  assessments  and  outreach  activities  form  a  significant  part  of  EFRAG's 
endorsement work.  

-  The second important activity of EFRAG is the IFRS-related work consisting of research 
work  and  activities  contributing  to  the  IASB’s  standard  setting  work  to  ensure  that 
European  views  on  the  development  of  financial  reporting  are  clearly  articulated  in  the 
IASB’s standard setting process. 

- 

In  2019,  as  part  of  the  Commission’s  Action  Plan  on  Financing  Sustainable  Growth 
(2018),  the  scope  of  EFRAG  work  was  widened  with  the  establishment  of  a  European 
Corporate Reporting Lab (“the Lab”), which became operational in February 2019, when 

8 Since 2015 the Securities and Exchanges Commission does not contribute anymore to the funding of the IFRS Foundation. 
The funding from the United States only stems from voluntary contributions from private organizations. 

6 

 
 
 
 
                                                           
the Lab’s Project Task Force on climate-related reporting started its work. 

3.1.1.  ENDORSEMENT ACTIVITIES  

In 2019, EFRAG's work programme remained largely driven by the IASB’s standard setting 
decision  to  amend  IFRS  17  Insurance  Contracts.  EFRAG  commented  on  the  proposed 
amendments  to  IFRS  17  in  September  2019.  The  IASB  issued  the  revised  amendments  to 
IFRS 17 in June 2020. In order to to be able to issue a draft endorsement advice soon after 
publication of the amended standard, EFRAG has continued to work on its draft endorsement 
advice. 

In  the  second  half  of  2019,  the  preparatory  work  by  EFRAG  for  the  endorsement  advice 
intensified further with continuous dialogues and outreaches with European insurance experts 
from different stakeholder groups represented in the EFRAG Insurance Accounting Working 
Group  (EFRAG  IAWG).  In  addition,  selected  topics  have  been  addressed  through  specific 
surveys  with  broader  groups.  EFRAG’s  Technical  Expert  Group  (EFRAG  TEG)  and  the 
EFRAG Board have been involved in each step.  

EFRAG  has  also  commissioned  an  update  of  its  2018  economic  study  in  areas  such  as 
industry  trends,  any  potential  impact  on  competition  for  capital  and  customers,  and  any 
potential impact on offerings of insurance products and services by insurers. 

EFRAG  contributed  to  the  accelerated  endorsement  process  of  IBOR  reform  Phase  1  to 
ensure that the amendments to IAS 39 and IFRS 9 on financial instruments were in place in 
time  for  companies’  2019  financial  statements  avoiding  potential  accounting  disruptions 
resulting from the IBOR reform. 

The  EFRAG  Secretariat  conducted  in  2018  as  a  pilot  an  early  stage  analysis  on  the  IASB 
Discussion Paper Financial Instruments with Characteristics of Equity (FICE), following up 
EFRAG’s  call  that  impact  analyses  should  be  carried  out  throughout  the  standard  setting 
process rather than only at the end. The EFRAG Secretariat published a working paper on the 
early-stage analysis at the end of February 2019. EFRAG also ran an early-stage analysis in 
preparation of the Draft Comment Letter for the IASB Exposure Draft General Presentations 
and  Disclosures  (formerly  “Primary  Financial  Statements”)  that  was  issued  in  December 
2019.  The  results  of  the  early-stage  analysis  gave  insight  in  how  European  stakeholders 
thought the new IASB proposals would impact their financial reporting in practice.  

In  the  course  of  2019,  EFRAG  participated  in  the  IASB  consultation  process,  and  issued 
comment  letters  after  public  consultation,  on  all  IASB  proposals  (exposure  drafts  and 
discussion  papers).  Other  areas  of  focus  included  the  IASB’s  projects  on  Rate-regulated 
Activities, Primary Financial Statements, Management Commentary, Business Combinations 
under Common Control (BCUCC) and Goodwill and Impairment. 

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3.1.2.  RESEARCH ACTIVITIES  

EFRAG’s  research work remained essential  part  of its activities in  2019  for influencing  the 
IASB  and  fostering  international  debate  by  providing  thought  leadership  on  issues  that  are 
important for Europe.  

Based  on  a  public  consultation  in  2018  on  priorities  among  European  constituents,  EFRAG 
worked  on  Better  Information  on  Intangibles;  Crypto  Assets;  and  Variable  and  Contingent 
Consideration in 2019. In January 2020, EFRAG published an academic literature review on 
intangibles. EFRAG also published a Discussion Paper Accounting for pension plans with an 
asset-return promise. Through its Academic Panel and Academic Network, EFRAG enhanced 
its cooperation with academics. 

Finally,  responding  to  the  Commission’s  second  request  on  long-term  equity  instruments  to 
explore  potential  alternative  accounting  treatments  to  fair  value  measurement  for  long-term 
investment  portfolios  of  equity  instruments,  EFRAG  launched  a  public  consultation  over 
summer  2019  to  gather  constituents'  views.  EFRAG  published  its  technical  advice  on 
alternative  accounting  treatments  to  measurement  at  fair  value  through  profit  or  loss  for 
equity  and  equity-type  instruments  held  in  a  long-term  investment  model,  together  with  the 
Feedback Statement of EFRAG’s public consultation in January 2020. 

3.1.3.  THE EUROPEAN LAB AND NON-FINANCIAL REPORTING DOMAIN 

The European Lab is designed to stimulate innovation in corporate reporting through sharing 
good  practices,  which  also  complements  and  contributes  to  EFRAG  work  on  financial 
reporting.  The  European  Lab  consists  of  a  European  Lab  Steering  Group,  chaired  by  the 
EFRAG Board President and as Vice-Chair the Commission’s head of the corporate reporting, 
audit and credit rating agencies unit, and project task forces. 

The European Lab Steering Group is directly accountable to the EFRAG General Assembly. 
The  European  Lab  Steering  Group  is  responsible  for  the  agenda  of  the  European  Lab, 
appointing  the  members  of  the  project  task  forces,  monitoring  project  implementation, 
promoting the European Lab and mobilising networks.  

Following  a  public  call  for  candidates  in  December  2018,  the  first  project  task  force  on 
climate-related  reporting  was  established,  making  the  European  Lab  fully  operational  in 
February 2019.  

Following a stakeholder outreach with nearly 50 participants, the project task force published 
early February 2020 its interactive practical and action-oriented report. The report highlights 
good reporting practices as well as potential ways of improving the current reporting practices 
with  two  supplements  on  general  climate  disclosures  and  scenario  analysis  reporting.  The 
report was published in time to be used by companies and financial institutions for their 2019 
corporate reporting. 

8 

 
 
The European Lab Steering Group carried out a public consultation in Q3 2019 on the future 
agenda  of  the  European  Lab.  Based  on  the  results  the  Steering  Group  decided  on  a  second 
project  of  the  European  Lab  that  would  address  reporting  of  non-financial  risks  and 
opportunities and linkage to the business model. This project  became operational in Q2 2020. 

The  European  Commission  supports  this  new  project  and  issued  a request  for  technical 
advice mandating  EFRAG  in  June  2020  to  begin  preparatory  work  for    possible  European 
non-financial  reporting  standards.  This  preparatory  work  would  provide  a  basis  for  the 
development  of  European  non-financial  reporting  standards,  if  the  co-legislators  decide  that 
such  standards  are  necessary  as  an  outcome  of  the  review  of  the  Non-Financial  Reporting 
Directive. It will be carried out by  a Project Task Force (PTF) established by the European 
Lab in September 2020 following the call for candidates. For the role of Chair of the PTF, the 
European Lab Steering Group has appointed Patrick de Cambourg, currently President of the 
“Autorité des Normes Comptables”. 

3.2. 

GOVERNANCE, TRANSPARENCY AND PUBLIC ACCOUNTABILITY 

3.2.1.  GOVERNANCE  OF  EFRAG  FOLLOWING  RECOMMENDATION  OF  THE  MAYSTADT 

REPORT 

The governance reform  of EFRAG, which was implemented on 31 October 2014, increased 
the  legitimacy  and  representativeness  of  the  organisation  and  resulted  in  a  more  cohesive 
process for the participation of the EU in the standard setting process. The governance reform 
was completed in July 2016 with the official appointment by the EFRAG General Assembly 
of Jean-Paul Gauzès, former Member of the European Parliament, as EFRAG Board President 
following  the  nomination  of  the  Commission9  and  as  endorsed  by  the  European  Parliament 
and the Council. His mandate was renewed for a further three years ending 30 June 2022. 

The European Supervisory Authorities and the ECB have opted to be official observers with 
speaking rights in the EFRAG Board instead of becoming full members. They have made an 
important contribution to EFRAG’s impact analysis notably in the area of financial stability.  

The  EFRAG  Board  reached  all  its  conclusions  in  2019  on  a  full  consensus  basis  without 
having resort to  majority voting.  In 2017, in  the spirit of the Maystadt report10, an observer 
seat was created for European organisations representing private investors (“end users”). 

The EFRAG  Board carries out  a performance  and effectiveness  review of its own members 
under the oversight of the EFRAG General Assembly on an annual basis. The 2019 review, 
which covered a mixture of strategic, governance and operational issues, demonstrated that on 
balance the governance structure worked well, which resulted in increased credibility for the 
organisation.  Some  recommendations  were  adopted  to  further  improve  the  effectiveness  of 

9    See Commission Decision of 22.05.2019, C(2019) 3760 final 
10   Should IFRS Standards be more “European”? Report by Philippe Maystadt – October 2013 

9 

 
 
                                                           
EFRAG's activities in the future. The implementation of EFRAG’s communication strategy, 
and  having  a  communication  team  in  place  under  the  leadership  of  the  EFRAG  Board 
President, has brought further progress on the visibility and credibility of EFRAG.  

There  were  no  issues  with  potential  conflicts  of  interest.  EFRAG’s  Internal  Rules  set  out 
requirements on conflicts of interest and the EFRAG Board has a Conflict of Interest Policy 
for Board members that is published on the EFRAG website. The objective of the policy is to 
ensure the credibility of EFRAG as an organisation working in the European public interest. 
The policy is intended to avoid situations where conflicts or perceptions of conflict may arise, 
that would:  discourage free discussion;  result in decisions or actions that are not  in  the best 
interest of the European public at large or of EFRAG; or give the perception that EFRAG has 
acted  improperly.  EFRAG  Board  members  and  EFRAG  staff  confirm  yearly  their 
independence in form of signed declarations. 

3.2.2.  TRANSPARENCY RULES 

Evidence collected during 2019 shows that the EFRAG due process remains broadly in line 
with stakeholders needs. It is marked by a transparent flow of information among all parties 
involved. EFRAG continues to show its commitment to engage with the Commission in order 
to  achieve  even  higher  standards  of  transparency  than  it  was  applying  in  the  past.  This  is 
essential to ensuring that new IFRS Standards respond to Europe’s needs. 

The  transparent  public  due  process  developed  over  time  by  EFRAG  allows  all  European 
constituents  to  put  forward  their  views  for  consideration  by  EFRAG  and  ensures  that  the 
diversity of accounting and economic models and views in Europe are taken into account in 
determining EFRAG’s positions.  

Moreover, as part of its due process, EFRAG publishes draft positions for public consultation, 
undertakes field tests and other forms of effect analyses, organises outreach events (some of 
which are especially aimed at users) and undertakes special surveys, publishes the results in 
feedback  statements  and  publishes  final  positions.  EFRAG  contributes  to  evidence-based 
standard setting by undertaking quantitative studies  that inform  the discussion  on EFRAG’s 
comment letters and endorsement advice and which are gradually becoming a more important 
part of EFRAG’s research work. 

Meetings of the EFRAG Board, EFRAG TEG and EFRAG Consultative Forum of Standard 
Setters (EFRAG CFSS) are held in public and the agendas and summaries of the meetings are 
published on EFRAG’s  website. Also, the supporting agenda papers for the meetings of the 
EFRAG Board, EFRAG TEG and EFRAG CFSS are publicly available. Since March 2018, 
these  public  meetings  have  been  webcasted  allowing  stakeholders  to  watch  the  discussions 
not only real time but also after the meetings have been held. The discussions of EFRAG TEG 
are  supported  by  input  received  from  EFRAG  CFSS  and  the  specialised  EFRAG  Working 
Groups and Advisory Panels.  

10 

 
 
The  input  received  from  the  EFRAG  User  Panel  is  essential  for  the  work  of  EFRAG.  The 
diversified composition of these groups as well as the EFRAG Board and EFRAG TEG, both 
in terms of geographical and professional background ensures, in addition to the transparent 
public due process, that all different perspectives are properly taken into account by EFRAG.  

The EFRAG Board receives a regular report of all meetings between EFRAG staff and other 
parties  (other  than  routine  administrative  meetings).  These  reports  in  aggregated  form  are 
included in the final grant reports that EFRAG submits to the Commission. 

EFRAG  publishes  every  year  an  annual  review  providing  transparency  on  its  governance, 
financial  structure  and  the  main  activities  in  the  year  concerned.  The  Annual  Review  2019 
was published on 19 May 202011. 

Finally, on 9 July 2019 the EFRAG Board approved a Public Transparency Register with all 
meetings and conferences of the President of the Board, the TEG Chairman and the CEO of 
EFRAG. 

3.2.3.  BROAD  REPRESENTATION  AND  PUBLIC  ACCOUNTABILITY  OF  EFRAG’S 

GOVERNANCE STRUCTURE  

In  2019,  EFRAG  Member  Organisations’  feedback  on  the  approach  to  the  governance 
structure of EFRAG in promoting broad representation of interests and public accountability 
was in general positive.  EFRAG  remains vigilent to guarantee neutrality and objectivity in 
the decision-making process.  

EFRAG strives for a proper geographical, professional background and gender balances in its 
Board,  Technical  Expert  Group  and  its  Working  Groups  and  Advisory  Panels  and  the 
European  Lab  Steering  Group  and  its  project  task  forces.  EFRAG’s  Internal  Rules  include 
requirements  on  a  maximum  number  of  members  of  the  same  nationality  in  the  EFRAG 
Board  and  EFRAG  TEG.  These  requirements  have  also  been  applied  to  the  European  Lab 
Steering Group. In addition, there are requirements for proper balance in terms of professional 
background and gender.  

The  members  of  the  EFRAG  Board  are  nominated  by  the  EFRAG  Member  Organisations 
according  to  a  system  put  in  place  following  the  Maystadt  recommendations.  For  EFRAG 
TEG and its Working Groups and Advisory Panels and of the European Lab Steering Group 
and its project task forces, public calls for candidates are issued.  

The  number  of  applications  differs  widely.  There  is  in  particular  a  shortage  in  female 
candidates and candidates from Central and Eastern Europe but the situation is improving. On 
the  latter,  EFRAG  has  appointed  an  EFRAG  TEG  member  from  the  Czech  Republic  in  the 

11 Please see the following the link:  
https://efrag.org/About/AnnualReports 

11 

 
 
                                                           
 
2020 EFRAG TEG rotation process effect from 1 April 2020. The management team consists 
entirely of female professionals.  EFRAG has also  been able to  attract  for the European  Lab 
Steering Group and its project task force a higher number of female candidates and candidates 
from Central and Eastern Europe (see situation in details per 31 December 2019 in Appendix 
4). 

Although the overall results of these actions were positive, a few issues identified in  earlier 
years remain of concern and need further improvement like the under-representation of users, 
preparers  and  investors.  EFRAG  should  remain  pro-active  in  seeking  feedback  from 
stakeholders  less  closely  involved  in  EFRAG’s  work  and  protect  itself  against  any  bias 
towards industry and other interests.  

3.2.4.  EARLY STAGE INVOLVEMENT OF THE EUROPEAN PARLIAMENT AND THE COUNCIL 

EFRAG  is  sufficiently  well  know  among  the  inner  circle  of  stakeholders  that  have  a  direct 
interest in IFRS. But, its visibility seemed to decrease in 2019 amongst the policymakers like 
the European Parliament.  

EFRAG  would  welcome  the  re-establishment  of  the  ECON-IFRS  Permanent  Team  in  the 
European Parliament to exchange views and to alert significant issues. In 2019 contrary to the 
previous  year,  no  exchange  of  views  took  place  with  the  ECON  Committee  in  a  public 
meeting. EFRAG took into account the European Parliament’s resolution of 3 October 2018 
on IFRS 17 in its work on the endorsement advice of IFRS 17. 

EFRAG generally attends the Accounting Regulatory Committee (ARC) meetings and gives 
presentations at the request of the Commission of work in progress and particular topics. This 
allows the ARC to exchange views with EFRAG and to give early input. The ARC discusses 
the endorsement advice request letters, before they are submitted to EFRAG to ensure that all 
relevant issues are addressed. 

Receiving input from the Parliament and ARC at an early stage allows EFRAG to cover the 
issues in its public consultations on draft comment letters or draft endorsement advice. 

3.3. 

DIVERSIFICATION AND BALANCE OF EFRAG’S FINANCING STRUCTURE  

EFRAG  is  a  publicly  and  privately  funded  organisation  working  in  the  European  public 
interest.  EFRAG  has  the  legal  form  of  an  AISBL  (Belgian  international  non-profit 
organisation).  In  2019,  the  funding  for  EFRAG  came  from  eight  European  Stakeholder 
Organisations  and  nine  National  Organisations,  plus  the  European  Commission.  The 
breakdown of the cash contributions by member organisations is reported in Appendix 3.  

In  addition  to  cash  funding,  EFRAG  receives  contributions  in  kind  provided  by  the  unpaid 
members of EFRAG TEG, the EFRAG Board, the Working Groups and Advisory Panels as 
well as in form of free secondments to EFRAG’s secretariat. 

12 

 
 
EFRAG’s financial structure did not raise any particular concern in 2019. The total expenses 
and human resourses  were below budget  and the staff remained stable. However, it appears 
important  that  EFRAG  will  secure  its  longer-term  funding  structure  and  find  additional 
sources  of  funding,  not  only  following  the  reduction  of  contribution  of  the  Accountancy 
profession in  2020 and the financial implication of the Brexit, but  also considering possible 
negative impacts from the coronavirus on contributions from some organisations.  

Aware  of  the  problem,  EFRAG  is  already  seeking  to  broaden  its  membership  base.  Its 
President  Jean-Paul  Gauzès  launched  a  task  force  to  reflect  about  EFRAG’s  long-term 
funding structure in 2019. EFRAG’s membership base should ideally cover all EU Member 
States.  Support  from  all  EU  institutions  and  the  Member  States  to  encourage  national 
organisations in countries to join would be of great support.  

1.  PUBLIC INTEREST OVERSIGHT BOARD 

4.1. 

ACTIVITIES OVERVIEW   

The  global  architecture  of  standard  setting  in  the  field  of  audit,  assurance,  ethics  and 
education  consists  of  a  three-tier  structure  made  up  of  Standard  Setting  Boards  (SSB) 
supported by the  International Federation of Accountants (IFAC), the independent oversight 
(PIOB), and accountability to a monitoring body of public authorities (Monitoring Group). 

The PIOB is an independent external body, consisting of 10 members including its Chairman 
(the Commission has nominated 2 EU members of the 10) which oversees the standard setting 
on auditing,  ethics and education for accountants. The relevant standards are the International 
Standards  on  Auditing  (ISA),  the  Ethics  standards  for  accountants,  and  the  International 
Education  Standards  (IESs).  The  standard  setting  structure  is  a  result  of  the  2003  IFAC 
Reforms12,  which  were  developed  as  a  response  to  high-profile  corporate  collapses  and 
failures  in  financial  reporting  and  auditing  in  a  number  of  countries.  A  key  reform  was  the 
establishment  of  the  PIOB,  aimed  at  increasing  the  confidence  of  investors  and  others  by 
overseeing  that  the  activities  of  the  standard  setting  Boards  related  to  auditing  are  properly 
responsive to the public interest.  

The overall task of the PIOB is to guarantee that due process, oversight and transparency are 
respected  and  that  the  public  interest  is  safeguarded  along  the  process  comprising  the 
proposal, development and adoption of international standard for auditors. 

The  PIOB  also  approves  the  nominations  of  the  members  of  the  standard  setting  boards,  it 
agrees with their strategies and work plans, it monitors the development of the standards and 
verifies  that  all  elements  mentioned  in  the  public  consultations  are  duly  taken  into  account. 
Where needed, the PIOB recommends steps to ensure that the standards effectively respond to 
the public interest.  

12 IFAC is the private body representing accountants and auditors worldwide. 

13 

 
 
                                                           
In  2019,  the  PIOB,  as  explained  in  its  15th  Public  Report  published  in  May  2020,13  has 
regularly  communicated  with  the  standard  setting  boards  under  its  oversight  (International 
Auditing  and  Assurance  Standards  Board  (IAASB);  the  International  Accounting  Education 
Standards  Board  (IAESB)  and  the  International  Ethics  Standards  Board  for  Accountants 
(IESBA), their three Consultative Advisory Groups, the Compliance Advisory Panel and the 
Nominating Committee and IFAC leadership.  

Pursuant to the advice of the PIOB, the IAASB included in its strategy for the next four years 
information-gathering  activities  regarding  both  going  concern  and  the  auditor’s  role  in 
detecting fraud.  

The  IAASB  adopted  International  Standard  on  Auditing  (ISA)  315  (Revised).  IAS  315 
established more robust requirements and detailed guidance on identifying and assessing risk 
and emphasizing professional skepticism and data analytics, which the PIOB had identified as 
key public interest issues. 

The  PIOB  also  provided  comments  on  the  new  proposed  quality  management  standards 
currently under development by the IAASB to ensure higher-quality audits and reinforce the 
importance of professional skepticism.  

The  International  Code  of  Ethics  for  Professional  Accountants  issued  by  the  IESBA  is  an 
essential tool combining fundamental principles and rules that steer professional accountants 
and their firms toward a business model that identifies and avoids potential ethical conflicts 
and  threats  to  independence.  The  current  practice  of  simultaneous  provision  of  audit  and 
consulting  services  is  under  extensive  discussion.  The  PIOB  has  therefore  encouraged  the 
IESBA to widen the scope of a project on allowed and prohibited non-assurance services. In 
2019, the IESBA issued a public consultation on an updated standard that would further limit 
offering non-assurance services to audited companies, together with another project for a new 
standard that would require auditors to  address  threats  to  auditors’ independence  created by 
fee-related matters (the Fees project). 

The PIOB has also actively participated in the Monitoring Group’s discussions on the reform 
of  the  current  governance  and  oversight  model  of  international  audit-related  standards  and 
contributed to the development of a “Public Interest Framework” that would aim at providing 
a better mechanism for assessing how the public interest is captured throughout the standard 
setting  process.  The  Monitoring  Group  published  its  recommendations  to  “Strengthen  the 
International Audit and Ethics Standard-Setting System” on 14 July 2020. 14 

13  https://ipiob.org/wp-content/uploads/2020/11/PIOB-Fifteenth-Public-Report-2019-1.pdf 

14 https://www.iosco.org/about/monitoring_group/pdf/2020-07-MG-Paper-Strengthening-The-International-Audit-And-
Ethics-Standard-Setting-System.pdf  

14 

 
 
                                                           
 
 
4.2. 

GOVERNANCE AND ACCOUNTABILITY 

The  members  of  the  PIOB  are  appointed  by  the  Monitoring  Group  which  is  ultimately 
responsible for the overall governance arrangements in the field of International Standards on 
Auditing, assurance, ethics and education.  

The Monitoring Group, of which the European Commission is a member, monitors how the 
PIOB carries out its public interest role with particular regard to the PIOB's oversight of the 
standard setting process.  

As regards potential situations of conflicts of interest, PIOB members and staff need to abide 
by the PIOB Code of Conduct.  The first  principle of the PIOB Code of  Conduct  states that 
Board members and staff must not become involved in any matter in relation to which their 
judgement may be affected by a conflict of interest. Every year, each Board member signs a 
declaration of absence of conflicts of interest. No conflicts of interests have been reported by 
any of the PIOB´s Board members in 2019. 

4.3. 

DEVELOPMENTS IN THE DIVERSIFICATION OF FUNDING IN 2019 

The funding of the PIOB is designed as to preserve its independence in fact and appearance. 
To  achieve  the  public  interest  objective,  proper  diversification  of  stable  funding  sources 
would help not only to preserve its continuity but also to guarantee the PIOB’s independence. 
The importance of funding diversification was already recognised in the IFAC (International 
Federation of Accountants) reform of 2003 which was at the origin of the current international 
standard setting system, including the PIOB. 

Since  its  creation  in  2005  and  until  2010  when  the  Community  funding  programme 
established by Decision 716/2009/EC became operative, the PIOB was financed exclusively 
by IFAC (apart from an in-kind contribution by Spain (i.e. the rental of the Madrid office). 

The  funds  made  available  by  IFAC  in  a  given  year  constitute  a  maximum  guaranteed 
contribution.  The  non-IFAC  contributions  substitute  and  thus  reduce  the  IFAC  contribution 
for  that  specific  year.  Ideally  the  IFAC  funding  portion  of  the  total  PIOB  annual  expenses 
should  be  less  than  half  of  the  total.  But  it  is  been  very  challenging  to  find  other  public 
sponsors. For many years now the EU is the second biggest donor to the PIOB. In year 2019, 
PIOB’s  revenue  (monetray  and  in-kind  contributions)  amounted  to  EUR  1,858,346  and  the 
EU contribution was EUR 338,000 or 18.18%. IFAC contributed EUR 1,201,028 or 64,62%. 

Article 9.5 of the Regulation stipulates that if funding by IFAC in a given year reaches more 
than two-thirds of the total annual  PIOB funding, the Commission must propose to limit its 
annual  contribution  for  that  year  to  a  maximum  of  EUR  300,000.  So  far,  this  has  not 
happened.  Therefore,  as  the  critical  threshold  stipulated  in  the  Regulation  (66.66%)  has  not 
been  reached  by  the  IFAC  funding,  the  Commission  does  not  need  to  review  its  2019 
contribution to the PIOB. 

15 

 
 
5. 

CONCLUSIONS AND ISSUES FOR FUTURE CONSIDERATION 

The present assessment of the funding programme carried out by the European Commission 
in  2019  confirms  the  relevance  and  the  added  value  of  the  EU  funding  programme.  It  also 
confirms  that  the  programme  strengthens  the  legitimacy  of  the  three  beneficiaries  (IFRS 
Foundation,  EFRAG  and  PIOB)  to  serve  the  European  public  interest  by  developing  and 
promoting European views in the field of financial reporting and auditing and ensuring these 
views are properly considered in the IASB and IFAC standard-setting processes. 

As  regards  the  IFRS  Foundation,  the  IASB  undertook  measures  to  address  the  concerns 
arising from the pre-implementation phase of IFRS 17. It postponed the effective date by two 
years to 1 January 2023 and introduced targeted amendments to IFRS 17. However, the extent 
to  which  all  European  concerns  have  been  considered  can  only  be  assessed  once  EFRAG 
submits its endorsement advise on the amendments to IFRS 17 to the European Commission. 

Furthermore,  the  2019  breakdown  of  funding  of  the  IFRS  Foundation  shows  that  the  gap 
between  the  financial  contributions  and  the  corresponding  representation  of  jurisdictions 
within  the  board  of  Trustees  and  the  IASB  Board  has  further  widened,  starting  from  an 
already unbalanced situation. The “Americas” have a particularly low proportion of the total 
funding (5%) but have the same number of seats as the EU providing 38% of the total funding 
(Commisison and Member States) and a higher number of seats than Asia-Oceania providing 
33% of the total funding.  

As  for  EFRAG,  the  Commission  has  in  particular  appreciated  the  comprehensive  effects 
analysis initiated by EFRAG's in order to support its future endorsement advice on IFRS 17 
Insurance  Contracts  and  its  key  role  played  to  technically  advise  the  Commission  on 
alternative  accounting  treatments  for  long-term  equity  instruments,  recommending  the 
Commission  to  request  the  IASB  to  perform  “expeditious”  review  of  the  non-recycling 
treatment of equity instruments in IFRS 9.  

The PIOB’s independent oversight function exists to provide assurance to investors and others 
that audit-related standard setting has taken place in the public interest. The reform initiated 
by  the  Monitoring  Group  seeks  to  enhance  the  PIOB’s  oversight  role  and  to  enlarge  its 
funding base. 

16 

 
 
 
 
 
 
 
 
 
Appendix 1 – Summary of IFRS activities in 2019 

Standard 

IASB Issue 
date 

Application 
date 

Publication 
date 
Official 
Journal 

IFRS 17 – Insurance Contracts 

18/05/2017 

01/01/2023 

Amendment to IAS 28 – Long Term Interest in 
Associates and Joint Ventures 

12/10/2017 

01/01/2019 

11/02/2019 

Annual improvements 2015-2017 

12/12/2017 

01/01/2019 

15/03/2019 

Amendments to IAS 19 – Plan Amendment, 
Curtailment or Settlement 

Amendments to references to the Conceptual 
Framework in IFRS Standards 

07/02/2018 

01/01/2019 

14/03/2019 

29/03/2018 

01/01/2020 

06/12/2019 

Amendments to IFRS 3 – Definition of a business 

22/10/2018 

01/01/2020 

22/04/2020 

Amendments to IAS 1 and IAS 8 – Definition of 
material 

31/10/2018 

01/01/2020 

10/12/2019 

Amendments to IFRS 9, IAS 39 and IFRS 7 – Interest 
Rate Benchmark Reform (Phase 1) 

26/09/2019 

01/01/2020 

16/01/2020 

Amendments to IAS 1 – Presentation of Financial 
Statements (Classification of Liabilities as Current or 
Non-current) 

23/01/2020 

01/01/2023 

Amendment to IFRS 16 – Leasing 

28/05/2020 

01/06/2020 

Amendments to IFRS 17, IFRS 9 and IFRS 4 – 
Deferral option 

25/06/2020 

01/01/2023 

Amendments to IFRS 9, IAS 39 and IFRS 7 – Interest 
Rate Benchmark Reform (Phase 2) 

27/08/2020 

01/01/2021 

17 

 
 
 
 
 
 
 
2019 

2020 

Comments 

Work Plan  Exposure Draft 

Work Plan 

Targeted improvement of the structure and content of the 
Primary Financial Statement. Exposure Draft Feedback 
expected in Q4 2020. 
Project completed.  

2018 

Projects reported in 
grant applications 
Better communication project 
Primary Financial 
Statements 

Disclosure Initiative – 
Principles of 
disclosures 

Discussion 
paper 
30/03/2017 

17/12/2019 

Project 
summary 
published on 
03/2019 

Disclosure Initiative – 
Targeted Standards-
level Review of 
Disclosures 

Disclosure initiative – 
Accounting Policies 

Management 
Commentary 

Research projects 
Business combination 
under Common 
Control 
Discount rate 

Work Plan  Work Plan 

Work Plan 

Work Plan  Exposure Draft 

Work Plan 

01/08/2019 

Work Plan  Work Plan 

Work Plan  Work Plan 

Exposure Draft 
expected in 
Q1 2021 

Discussion 
Paper expected 
in Q4/2020 

Project designed to test the disclosure requirements of 
IFRS 13 Fair Value Measurement and IAS 19 Employee 
Benefits against the new guidance principles defined by 
the IASB.  
Exposure Draft postponed to H1 2021. 

Project designed to improve the disclosures pertainining 
to accounting policies by applying the materiality 
principle. Exposure Draft Feedback expected in Q4 2020 
Project to revise and update the Practise Statement 1 
Management Commentary as a complementary and 
supportive instrument to the financial statements.  

Aims at reducing the diversity in accounting for business 
combinations under common control. 

Work Plan  Project 

Project completed. 

18 

 
 
 
 
 
summary 
published 
02/2019 

Dynamic Risk 
Management 

Work Plan  Work Plan 

Work Plan 

Financial Instruments 
with Characteristics of 
equity 

Work Plan  Discussion 

Ongoing 

paper 06/2018 

Goodwill and 
impairment 

Rate regulated 
activities 

Work Plan  Work Plan 

Work Plan  Work Plan 

Extractive activities 

Work Plan 

Discussion 
Paper 
19/03/2020 
Exposure Draft 
expected in 
Q4 2020 
Work Plan 

Pension Benefits that 
Depend on Asset 
Return 

Work Plan 

Work Plan 

Macro Hedging research plan that aims at devising an 
accounting model to report the effect of hedging and 
dynamic risk management. Core Model Outreach 
expected in Q4 2020 before developing a second 
Discussion Paper. 
Clarification for the presentation of financial instruments 
with both liability and equity features. Aims at clarifying 
the requirements of IAS 32 Financial 
Instruments:Presentation. Decision on Project Direction 
expected in Q4 2020. 
Research project to ensure the timely recognition of 
goodwill impairment. Aims at improving the 
requirements of IAS 36.  
The project aims at accounting for the effect of rate 
regulations when companies pricing policies are 
regulated. 
Research project to consider an upgrade of IFRS 6 
Exploration for and Evaluation of Mineral Ressources. 
Review research in H1 2021. 
Research project to develop proposals to make a narrow-
scope amendment to IAS 19 Employee Benefits for 
pension benefits that depend on asset returns.  
Review research in Q4 2020. 

19 

 
 
 
 
Post-implementation 
Review of IFRS 10, 
IFRS 11 and IFRS 12 

Work Plan 

Work Plan 

Work plan  Work plan 

Maintenance projects – Narrow scope amendments 
Accounting policies 
and Accounting 
Estimates 
(Amendments to IAS 
8) 
Accounting policies 
changes (Amendment 
to IAS 8) 

26/03/2018 

Work plan  Exposure Draft 

An amendment 
expected in 
Q4 2020 

Work Plan 

Availability of a 
refund (Amendments 
to IFRIC14) 
Fees in the 10 percent 
test for Derecognition 
(Amendment to IFRS 
9) 
Lease Incentives 
(Amendment to 
Illustrative Example 
13 accompanying 

Work plan  Work plan 

Work Plan 

Work Plan  Work Plan 

Work Plan  Exposure Draft  

05/2019 

Amendment 
issued on 
14/05/2020 

Amendment 
issued on 
14/05/2020 

The review aimed at assessing the impact of IFRS 10 
Consolidated Financial Statements, IFRS 11 Joint 
Arrangements and IFRS 12 Disclosures of Interests in 
Other Entities. Request for Information expected in Q4 
2020. 

Clarifications on the distinction between accounting 
policies and estimates. 

Designed to lower the impracticability threshold 
regarding retrospective application of voluntary changes 
in accounting policies. Decision on Project Direction 
expected in Q4 2020. 
Clarifications when third parties have rights to make 
particular decisions about a company's defined benefit 
plan 
Project completed. 

Project completed. 

20 

 
 
 
IFRS 16) 
Improvements to IFRS 
8 - Operational 
segments 
Property, Plant and 
Equipment: Proceeds 
before Intended Use 
(Amendments to IAS 
16) 
Taxation in Fair Value 
Measurements 
(Amendments to IAS 
41) 
IBOR Reform and the 
Effects on Financial 
Reporting 
Onerous Contracts – 
Cost of fulfilling a 
contract (Amendment 
to IAS 37) 
Subsidiary as a First-
time Adopter 
(Amendments to IFRS 
1) 
2019 Comprehensive 
Review of the IFRS 

Project 
summary 
02/2019 
Work plan 

Exposure 
Draft 
29/03/2017 
Exposure 
Draft 
20/06/2017 

Work plan 

Project terminated following the feedback from the 
Exposure Draft consultation.  

Project completed. 

Project completed.  

Amendments 
issued on 
14/05/2020 

Amendments 
issued on 
14/05/2020 

Phase 1 issued 
on 26/09/2019 

Phase 2 issued 
on 27/08/2020 

Project completed. 

Exposure Draft 
13/12/2018 

Work Plan 

Amendment 
issued on 
14/05/2020 

Amendments 
issued on 
14/05/2020 

Project completed. 

Project completed. 

Work plan 

Work plan 

Second comprehensive review of the IFRS for SMEs 
Standard. 

21 

 
 
 
 
 
 
 
 
for SMEs Standard 
Deferred tax related to 
assets and liabilities 
arising from a single 
transaction 
(Amendments to IAS 
12) 
Lack of 
Exchangeability 
(Amendments to IAS 
21) 
Provisions—Targeted 
Improvements 

Exposure Draft 
17/07/2010 

Work Plan 

Change in the requirements relating to the accounting for 
deferred tax when an entity accounts for transactions 
such as leases or decommissioning obligations by 
recognizing both an asset and a liability. Decision on 
Project Direction expected in November 2020. 

Work plan 

Work plan 

Amendents to address the spot exchange rate an entity 
uses when exchangeability between two currencies is 
lacking. Exposure Draft expected, but not date yet set. 

Work plan 

Work plan 

Proposals for three targeted improvements to IAS 37 
Provisions, Contingent Liabilities and Contingent Assets. 
Aligning the definition of a liability and requirements for 
identifying liabilities with the Conceptual Framework for 
Financial Reporting; and clarifying two aspects of the 
measurement requirements. Decision on Project 
Direction expected, but no date yet set. 

22 

 
 
 
 
 
 
Appendix 2 – Breakdown of the 2019 funding of the IFRS Foundation 

Breakdown of funding of the IFRS Foundation 
Financial contributors 

Contribution 
2019 

Contribution 
2018 

Contribution 
2017 

Number of 
trustees 

Evolution at constant 
exchange rate 

2019/2018 

2018/2017 

International Auditing Firms 
European Commission 
EU Member States  
Asia/ Oceania 
Americas 
Africa 
Other 
Total  
Source: IFRS Foundation 

19.8% 
20.7% 
17.8% 
33.5% 
5.1% 
0.0% 
3.0% 

24.0% 
18.5% 
17.2% 
30.8% 
6.1% 
0.6% 
2.7% 

34.7% 
16.5% 
15.9% 
23.9% 
5.8% 
0.5% 
2.6% 

-29.7% 
0.5% 
-6.5% 
-0.8% 
-21.4% 
-94.8% 
-2.5% 
-10.6% 

-31.8% 
2.0% 
-4.0% 
7.9% 
-10.8% 
0.0% 
-5.4% 
-9.7% 

6 
6 
6 
1 
3 
22 

23 

 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
 
Appendix 3 – Breakdown of the 2019 funding of EFRAG 
CONTRIBUTIONS                  000 EUR 

European Stakeholder Oganisations 
Accountancy Europe 
BUSINESSEUROPE 
INSURANCE EUROPE 
EBF 
ESBG 
EACB 
EFAA 
EFFAS 
Total  
National Organisations 
France 
Germany 
UK 
Italy15 
Sweden 
Denmark 
Netherlands 
Spain 
Luxembourg 
Total  
Source: EFRAG 

2019 

240 
125 
75 
75 
75 
75 
25 
15 
705 

350 
350 
350 
290 
100 
50 
50 
50 
10 
1600 

2018 

300 
125 
75 
75 
75 
75 
25 
15 
765 

350 
350 
350 
290 
100 
50 
50 
50 
10 
1600 

Appendix 4 : Gender balance information in EFRAG per 31 December 2019 
Group 

Percentage 
male 

Percentage 
female 

Percentage 
Central and 
Eastern Europe 

Number of 
nationalities 

EFRAG Board 
EFRAG TEG 

EFRAG TEG 
working groups and 
Advisory Panels 
European Lab 
Steering Group 
European Lab 
Project Task Force 
EFRAG Secretariat 
Management 
Technical staff 
Support staff 

Source: EFRAG 

76% 
81%  

81% 

59% 

52% 

0% 
50% 
0% 

24% 
19%  

19% 

41% 

48% 

100% 
50% 
100% 

0% 
0% (from 1 April 
2020 6%) 
2% 

9 
8 (from 1 April 
2020: 9) 
Between 5 and 14 

12% 

13% 

0% 
14% 
0% 

13 

13 

3 
10 
3 

15 For part of 2018 OIC seconded a staff member to EFRAG, with an annual equivalent of 60K euro 

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