REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the activities of the IFRS Foundation, EFRAG and PIOB in 2024
Date: 2025-12-15
Institutions: Directorate-General for Financial Stability, Financial Services and Capital Markets Union, European Commission
Subjects: EU financing, EU office or agency, EU programme, International Accounting Standards, audit, financial accounting, financial control, foundation, single market, standardised accounting system

EN 

  EN 

   EUROPEAN COMMISSION  Brussels, 15.12.2025  COM(2025) 758 final  REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND THE COUNCIL on the activities of the IFRS Foundation, EFRAG and PIOB in 2024  
 
 
REPORT FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT AND 
THE COUNCIL 

on the activities of the IFRS Foundation, EFRAG and PIOB in 2024 

1. 

INTRODUCTION 

On 28 April 2021, the European Union adopted the Single Market Programme1 to support and 
strengthen the governance of the single market, with a total budget of EUR 4.21 billion for the 
period 2021-2027. The Single Market Programme Regulation included a budget envelope of 
EUR 220.5 million for standardisation processes, of which EUR 10.0 million was allocated in 
20242 to  support the development  of international  financial  and non-financial reporting and 
auditing standards and to facilitate their integration into EU law. 

Under  the  Single  Market  Programme,  the  Commission  provides  an  annual  grant  to  the 
International  Financial  Reporting  Standards  Foundation  (IFRS  Foundation)  for 
the 
development of International Financial Reporting Standards (IFRS accounting standards), the 
European Financial Reporting Advisory Group (EFRAG), and the Public Interest  Oversight 
Board (PIOB). These organisations play an important role in ensuring the quality, reliability 
and availability of financial and sustainability information in corporate reports through their 
work on developing international financial and non-financial reporting and auditing standards. 
This report summarises their activities in 2024, except for the activities of the IFRS Foundation 
on sustainability reporting as these are not co-financed by the EU grant. 

2. 

IFRS FOUNDATION 

2.1. 

GOVERNANCE 

The IFRS Foundation is a non-profit organisation established to develop, promote and facilitate 
the  use  of  a  single  set  of  high-quality,  understandable,  enforceable  and  globally  recognised 
accounting and sustainability disclosures standards. 

The IFRS Foundation is governed by a Board of 22 trustees that is collectively responsible for 
overseeing the governance and organisational strategy of the IFRS Foundation, overseeing due 
process,  maintaining  the  IFRS  Foundation’s  Constitution  and  Due  Process  Handbook, 
appointing  members  to  the  International  Accounting  Standards  Board  (IASB),  International 
Sustainability Standards Board (ISSB), IFRS Interpretations Committee and various advisory 
bodies, and securing the funding of the IFRS Foundation. During 2024, Erkki Liikanen served 
as Chair of the Board of Trustees. 

The Trustees are accountable to the Monitoring Board. The Monitoring Board, of which the 
Commission  is  a  member,  reinforces  the  public  interest  oversight  function  of  the  IFRS 
Foundation, promotes the development of high -quality standards, and appoints the trustees. 

1 Regulation (EU) 2021/690 establishing a programme for the internal market, and the competitiveness of enterprises (OJ L 

153, 3.5.2021, p. 1, ELI: http://data.europa.eu/eli/reg/2021/690/oj). 

2 Annex I to Commission Implementing Decision C(2024)5420 amending Implementing Decision C(2023)8926 as regards the 
implementation of certain actions under the Single Market Programme. 

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The  IFRS  Foundation  hosts  the  IASB,  which  is  responsible  for  the  development  of  IFRS 
accounting  standards,  and  the  ISSB,  which  is  responsible  for  the  development  of  IFRS 
sustainability disclosure standards. The IASB and ISSB each consist of 14 members. They are 
nominated for a five-year term, renewable once. In 2024, Andreas Barckow served as Chair of 
the IASB and Emmanuel Faber as Chair of the ISSB. 

Under the IAS Regulation3, the Commission may endorse new or amended IFRS accounting 
standards considering EFRAG’s endorsement advice. Given the economic importance of IFRS 
accounting standards, the Commission provides financial support to the IFRS Foundation for 
the development of IFRS accounting standards. There is no legal mandate for the Commission 
to  endorse  (or  adopt)  global  sustainability  disclosure  standards,  but  the  Commission  and 
EFRAG promote the interoperability of European Sustainability Reporting Standards (ESRS) 
with  IFRS  sustainability  disclosure  standards  and  other  global  standards,  such  as  Global 
Reporting Initiative (GRI) standards. 

2.2 

ACTIVITIES 

2.2.1.  NEW AND AMENDED STANDARDS 

In  April 2024, the  IASB issued the new  IFRS 18  Presentation  and Disclosure in  Financial 
Statements,  which  aims  to  ensure  that  the  financial  performance  presented  in  financial 
statements is more transparent and comparable globally. In turn, this will allow investors to 
make better investment decisions. Once IFRS 18 enters into force, it will replace the current 
IAS 1 Presentation of Financial Statements. 

In  May,  the  IASB  issued  the  new  IFRS  19  Subsidiaries  without  Public  Accountability: 
Disclosures, which introduces an option for subsidiaries without public accountability but with 
a  parent  that  complies  with  IFRS  accounting  standards,  to  apply  reduced  disclosure 
requirements  to  their individual financial statements.  This  voluntary standard is  intended  to 
generate  savings  by  reducing  information  obligations,  while  maintaining  the  essential  data 
from financial statements and ensuring their comparability for users. 

Also in May, the IASB issued minor amendments to the scope of IFRS 9 Financial Instruments 
and  IFRS  7  Financial  Instruments:  Disclosures  (Amendments  to  the  Classification  and 
Measurement of Financial Instruments) to address the findings from the Post-Implementation 
Review (PIR) of the classification and measurement requirements in IFRS 9. 

In July, the IASB issued Annual Improvements to IFRS Accounting Standards – Volume 11, a 
document intended to clarify the wording of different  IFRS accounting standards or correct 
minor unintended consequences, oversights or conflicts related to the requirements in the IFRS 
accounting standards. 

In  December,  the  IASB  issued  amendments  to  IFRS  9  and  IFRS  7  (Contracts  Referencing 
Nature-dependent Electricity)  to  better  reflect  the  impact of power purchase  agreements on 
financial  statements  given  that  companies  have  been  increasingly  entering  into  such 
agreements  for  the  procurement  of  renewable  energy.  Power  purchase  agreements  help 

3 Regulation (EC) No 1606/2002 of the European Parliament and of the Council on the application of international 
accounting standards (OJ L 243, 11.9.2002, p. 1, ELI: http://data.europa.eu/eli/reg/2002/1606/oj) 

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companies  to  mitigate  the  effects  of  climate  change  and  to  decarbonise  their  production 
processes and products. 

Finally, the IFRS Foundation updated the IFRS taxonomy to reflect the implications of new 
standards and amendments4. 

2.2.2.  PROJECTS 

In March 2024, the IASB published the Exposure Draft Business Combinations – Disclosures, 
Goodwill and Impairment in order to improve the information companies disclose about the 
performance of business combinations and to amend the impairment test of cash-generating 
units containing goodwill. 

In July, the IASB published the Exposure Draft Climate-related and Other Uncertainties in the 
Financial Statements, which included eight examples illustrating how an entity should apply 
IFRS accounting standards to report the effects of climate-related and other uncertainties in its 
financial statements. 

Also  in  July,  the  IASB  published  the  Exposure  Draft  Amendments  to  IFRS  19  Subsidiaries 
without  Public  Accountability:  Disclosures,  which  aimed  to  align  IFRS  19  with  new  and 
amended IFRS standards issued between February 2021 and May 2024. 

In July and September respectively, the IASB completed its post-implementation reviews of 
IFRS  9  Financial  Instruments  –  Impairment  and  IFRS  15  Revenue  from  Contracts  with 
Customers. It concluded that the requirements in both standards were working as intended. 

In September, the IASB published the Exposure Draft Equity Method of Accounting – IAS 28 
Investments in Associates and Joint Ventures (revised 202x) in order to supplement and clarify 
the application of the equity method. 

In November, the IASB published the Exposure Draft Provisions–Targeted Improvements. It 
set  out  proposals  for  three  improvements  to  IAS  37  Provisions,  Contingent  Liabilities  and 
Contingent Assets. 

During 2024, the IASB also completed its deliberations on the rate-regulated activities project 
and continued its work on the Exposure Draft Dynamic Risk Management in order to develop 
requirements for macro-hedging of interest rate risk in the banking book. 

An overview of all activities and projects is available on the IFRS Foundation’s website5. 

2.3. 

FUNDING 

In 2024, the  IFRS Foundation received a EUR 3.05 million  grant  from  the Commission  for 
IASB-related  activities,  representing  17%  of  total  funding  contributions  to  the  IFRS 
Foundation  for  such  activities.  The  Commission  continued  to  be  the  largest  contributor, 
applying a maximum co-financing rate of 20% of eligible costs. 

4 The IFRS taxonomy serves as input to the European Single Electronic Format as per Commission Delegated Regulation 

(EU) 2019/815. 

5 IFRS Foundation work plan: https://www.ifrs.org/projects/work-plan/; and completed projects: 
https://www.ifrs.org/projects/completed-projects/. 

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A  breakdown  of  funding  for  IASB-related  activities  by  main  geographical  areas  and 
international accounting networks shows that in 2024 the EU and its Member States accounted 
for 32.8% of total contributions, Asia-Oceania for 34.8%, international accounting networks 
for 14.7%, Americas for 5.5%, Africa for 0.9% and others for 11.3%. The relative share of the 
Commission and Member States’ funding increased compared to 2023 (from 32.0% to 32.8%). 

3. 

EFRAG 

3.1. 

GOVERNANCE 

EFRAG is a publicly and privately funded organisation working in the European public interest 
and has the legal form of an AISBL (international non-profit organisation under Belgian law). 
Its activities are organised into two pillars: financial reporting and sustainability reporting. 

In the area of financial reporting, EFRAG’s mission is to serve the European public interest by 
developing and promoting European views in the field of financial reporting and ensuring that 
these  views  are  properly  considered  in  the  IASB’s  standard-setting  process  and  in  related 
international debates. EFRAG provides advice to the Commission on whether new or revised 
IFRS  accounting  standards  should  be  endorsed  by  the  EU.  In  addition,  EFRAG  carries  out 
proactive accounting research. 

In  the  area  of  sustainability  reporting,  pursuant  to  the  Corporate  Sustainability  Reporting 
Directive (CSRD)6, EFRAG provides technical advice to the Commission in the form of draft 
ESRSs  elaborated  following  robust  due  process.  Furthermore,  it  supports  the  effective 
implementation of ESRSs. 

The  EFRAG  Administrative  Board  is  responsible  for  due  process  oversight  of  all  technical 
bodies. It is supported in this work by a Due Process Committee. In 2024, Wolf Klinz served 
as Chair of the EFRAG Financial Reporting Board and Patrick de Cambourg as Chair of the 
EFRAG Sustainability Reporting Board. Until June 2024, Hans Buysse was President of the 
EFRAG Board of Directors, and since July 2024, Benoit Jaspar. 

3.2. 

FINANCIAL REPORTING PILLAR 

In  2024,  EFRAG’s  work  on  financial  reporting  remained  largely  driven  by  the  work 
programme of the IASB, the IFRS Interpretations Committee and the IFRS Foundation. 

It  issued endorsement advice on amendments  to  IAS  21  The Effects  of Changes in  Foreign 
Exchange Rates (Lack of Exchangeability), on amendments to IFRS 9 Financial Instruments 
and  IFRS  7  Financial  Instruments:  Disclosures  (Amendments  to  the  Classification  and 
Measurement of Financial Instruments), and on the Annual Improvements to IFRS Accounting 
Standards – Volume 11. 

EFRAG prepared endorsement advice on IFRS 18 Presentation and Disclosure in Financial 
Statements and IFRS 19 Subsidiaries without Public Accountability: Disclosures. 

6 Directive (EU) 2022/2464 of the European Parliament and of the Council of 14 December 2022 amending Regulation (EU) 
No 537/2014, Directive 2004/109/EC, Directive 2006/43/EC and Directive 2013/34/EU, as regards corporate sustainability 
reporting (OJ L 322, 16.12.2022, p. 15, ELI: http://data.europa.eu/eli/dir/2022/2464/oj). 

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EFRAG also issued six comment letters and two feedback statements and published a research 
paper on the connectivity between financial reporting and sustainability reporting. 

In addition, EFRAG closely monitored important ongoing IASB projects that are expected to 
result in IASB standard-setting which will require EU endorsement in the near future. These 
projects  include  Rate-regulated  Activities,  Financial  Instruments  with  Characteristics  of 
Equity  and  Dynamic  Risk  Management.  In  2024,  EFRAG  organised  outreach  activities  and 
roundtables to identify whether and to what extent the accounting treatments proposed by the 
IASB  would  work  for  European  constituents  or  pose  application  challenges.  EFRAG 
subsequently informed the IASB of the potential issues which European stakeholders  could 
face. 

Through its Academic Panel and Academic Network, EFRAG enhanced its cooperation with 
academics. 

3.3. 

SUSTAINABILITY REPORTING PILLAR 

In 2024, EFRAG focused on providing implementation support (Q&As and implementation 
guidelines)  to  large  companies  subject  to  ESRS  and  on  developing  simplified  reporting 
standards for SMEs. 

In January, EFRAG conducted a public consultation on the development of two standards for 
SMEs, namely a simplified standard to reduce the reporting burden on listed SMEs (the ‘LSME 
standard’), and a voluntary standard to support non-listed SMEs in providing information to 
banks or larger groups whose value chains they are a part of (the ‘VSME standard’). 

On 2 May, EFRAG and the IFRS Foundation published interoperability guidance describing 
the very high degree of alignment between ESRS and ISSB and explaining how companies can 
apply both sets of standards. The guidance also included a detailed analysis of how climate-
related disclosures are aligned. 

Also  in  May,  EFRAG  published  three  implementation  guidance  documents  for  companies 
preparing  their  sustainability  statements  according  to  the  ESRS,  covering  the  materiality 
assessment, value-chain reporting, and setting out a list of datapoints. 

EFRAG  also  started  work  on  a  guidance  document  for  companies’  transition  plans  and 
managed its ESRS Platform Q&A for supporting the implementation of ESRS. 

In August 2024, EFRAG submitted to the Commission its technical advice for the digital ESRS 
Set 1 XBRL Taxonomy to help companies to digitally tag the information that they report. 

In  November,  EFRAG  finalised  its  draft  LSME  standard,  but  did  not  take  a  formal  vote, 
pending  political  clarity  on  whether  the  standard  would  be  a  requirement  of  the  CSRD 
following the adoption of the Omnibus Directive7. 

7 On 26 February 2025, the Commission adopted the Omnibus I package, including two proposals to amend, among others, 
the CSRD (COM(2025) 80 and COM(2025) 81), Omnibus I - European Commission. 
. 

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In December, EFRAG submitted the draft VSME standard to the Commission. In response to 
multiple requests, EFRAG also started to develop guidance and support for SMEs aiming to 
apply the VSME standard. 

3.4. 

FUNDING 

For 2024, EFRAG’s total operating costs were EUR 15.1 million, which included an estimated 
EUR 3.2 million  in  contributions  in  kind  provided  by  third  parties.  Funding  from  the 
Commission  combined  with  the  release  and  deferral  of  EFRAG  Member  Organisations 
matched the association’s expenses. EFRAG’s retained earnings were EUR 4.9 million as at 
end 2024. Contributions  in kind include the time  given by members of EFRAG’s Financial 
Reporting Board, Sustainability Reporting Board and technical expert groups (only the Chairs 
are paid), as well as temporary secondments to the EFRAG secretariat. 

The  Commission  increased  the  EU’s  contribution  for  2024  from  EUR 6.3 million  to 
EUR 6.6 million split into two action grants, one for financial reporting (EUR 2 million) and 
one for sustainability reporting (EUR 4.6 million). The Commission provided co-financing for 
up  to  60%  of  EFRAG’s  eligible  costs  for  financial  reporting  and  up  to  90%  of  EFRAG’s 
eligible costs for sustainability reporting. For financial reporting, cash contributions also came 
from European stakeholder organisations (EUR 0.6 million) and national organisations from 
France, Germany, Italy, Belgium, the Netherlands, Denmark, Spain, Sweden and Luxembourg 
reporting,  European  stakeholder  organisations 
(EUR 1.6 million).  For  sustainability 
contributed  EUR 0.5 million,  national  organisations  contributed  EUR 1 million,  Friends  of 
EFRAG  contributed  EUR 0.3 million  and  civil 
society  organisations  contributed 
EUR 0.1 million. 

4. 

PUBLIC INTEREST OVERSIGHT BOARD (PIOB) 

4.1. 

GOVERNANCE 

The PIOB is the global independent oversight body that ensures the quality and public interest 
focus  of  the  standard-setting  process  for  international  audit,  assurance  and  ethics  standards 
formulated  by  the  International  Auditing  and  Assurance  Standards  Board  (IAASB)  and  the 
International Ethics Standards Board for Accountants (IESBA). Its main role is to ensure that 
the IAASB and IESBA follow due process when developing standards and strategies, in line 
with the public interest framework. Since 2022, the PIOB has been responsible for the selection 
and nomination of members to the IAASB and IESBA. 

The  Monitoring  Group8,  of  which  the  Commission  is  a  member,  monitors  how  the  PIOB 
delivers on its public interest mandate regarding the PIOB’s oversight of the standard setting 
process. It appoints the ten PIOB members, but not the Chair, who is appointed by the IOSCO. 

4.2. ACTIVITIES 

In 2024, the PIOB oversaw the activities of the IAASB and the IESBA. The PIOB approved 
three IESBA standards, one IAASB standard, and the strategies and work plans of both boards 

8 The Monitoring Group (iosco.org) 

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for  2024-2027.  The  PIOB  published  three  Public  Interest  Issues  in  addition  to  supporting 
oversight publications9. 

The  PIOB  also  completed  the  third  cycle  of  nominations  to  the  IAASB  and  IESBA, 
successfully since 2021 achieving a multi-stakeholder composition with improved geographic 
and gender diversity in line the Monitoring Group Recommendations. 

4.3. 

FUNDING 

For  2024,  the  PIOB’s  total  budget  was  EUR 2.5 million.  The  PIOB  received  18  monetary 
contributions, including EUR 350 000 from the European Commission, subject to a maximum 
co-financing rate of 30% of eligible costs. The Spanish government provides office premises 
for the PIOB valued at EUR 199 928. 

The International Federation of Accountants (IFAC) remained the largest contributor, but in 
line with the recommendations of the Monitoring Group to reduce the dependence of the audit 
profession on  the audit standard-setting  system,  IFAC’s contribution has  steadily  decreased 
(from  EUR 1.4 million  (or  63.56%)  in  2022  to  EUR 950 000  (or  41.37%)  in  2023  to 
EUR 650 000 (or 26.16%) in 2024). Despite continuous efforts to attract sponsors to replace 
IFAC’s contributions, the PIOB faced a funding shortfall in 2024. The Global Public Policy 
Committee  (GPPC),  representing  the  six  largest  international  accounting  networks,  bridged 
this gap with a one-off payment of EUR 500 000. 

2025 is the final year IFAC will contribute (amounting to EUR 500 000). Unless other sponsors 
are found, the PIOB will again face a shortfall. There is thus an urgent need for the Monitoring 
Group  and  the  PIOB  to  address  the  structural  funding  gap  and  ensure  the  long-term 
sustainability of the PIOB’s oversight and nomination responsibilities, which are critical to the 
quality and independence of the international standard-setting system. 

5. 

CONCLUSIONS 

For many years now the EU has contributed financially to the IFRS Foundation, EFRAG and 
the PIOB. Its continuous support has been indispensable to these organisations, enabling them 
to carry out their respective tasks in the public interest and, in turn, contributing to high quality 
standards that ensure the EU internal market functions effectively. 

9 On 14 July 2025, the PIOB published its 20th annual public report (for the year 2024) on its website: https://ipiob.org/. 

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