Governance
Reports
Financials
Overview
4 Report from the Chair of the IFRS Foundation Trustees
6 Report from the Chair of the International Accounting Standards Board
3 About us
8 Our objectives and how we create value
9 Our people
12 International Accounting Standards Board
13 Our stakeholders and how we engage
20
Our structure
21 Trustees of the IFRS Foundation
23 Trustee committees
24 Report from the Chair of the IFRS Foundation Monitoring Board
26
Introduction to the financial statements
28 Audit, Finance and Risk Committee’s report
29 Independent auditor’s report to the
Trustees of the IFRS Foundation
35 Statement of comprehensive income
35 Statement of changes in retained surplus
36 Statement of financial position
37 Statement of cash flows
38 Notes to the financial statements
14
2020 review
18 2021 priorities
19 Key organisational risks
53
Funding providers
56 IFRS Advisory Council
59 IFRS Interpretations Committee
Appendices
About us
Contents
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
3
About us
The IFRS Foundation is a not-for- profit organisation
established to develop a single set of high-quality,
understandable, enforceable and globally accepted
accounting standards—IFRS® Standards—and to promote
and facilitate their adoption.
IFRS Standards are set by the Foundation’s standard-setting
body, the International Accounting Standards Board, which
in turn is aided by the IFRS Interpretations Committee in
supporting consistent application of the Standards.
The IFRS Foundation Trustees, who are accountable to
a Monitoring Board of public authorities, are responsible
for strategy and governance.
The Foundation was founded in 2001 and is headquartered
in London, United Kingdom, with a regional Asia-Oceania
office in Tokyo, Japan.
Our mission is to develop IFRS Standards that bring transparency, accountability and efficiency to financial markets around the
world. Our work serves the public interest by fostering trust, growth and long-term financial stability in the global economy.
IFRS Standards bring
transparency by enhancing the
international comparability and
quality of financial information,
enabling investors and other
market participants to make
informed economic decisions.
IFRS Standards strengthen
accountability by reducing the
information gap between the
providers of capital and the people
to whom they have entrusted
their money. Our Standards
provide information needed to
hold management to account. As
a source of globally comparable
information, IFRS Standards
are also of vital importance to
regulators around the world.
IFRS Standards contribute
to economic efficiency by
helping investors to identify
opportunities and risks globally,
thus improving capital allocation.
For businesses, the use of
a single, trusted accounting
language lowers the cost of
capital and reduces international
reporting costs.
Our mission statement
About this report
This report covers the financial year ended 31 December 2020 and was authorised for issue in March 2021. An inline XBRL
version can be found in the annual report section of our website: www.ifrs.org/about-us/who-we-are.
We have sought to keep this report concise, with links to further information on our website. If you have questions that
you cannot find the answers to in this report or general feedback on the report, please email communications@ifrs.org.
Transparency Accountability Efficiency
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IFRS Foundation Annual Report 2020
4
Focusing our strategy
Report from the Chair of the IFRS Foundation Trustees
Erkki Liikanen
In this year of the pandemic, we all
miss face-to-face interactions with
colleagues and stakeholders around the
world but people's well-being comes
first. Accordingly, I want to start by
warmly thanking my colleagues for their
resilience and for delivering so many
high-quality projects in very challenging
circumstances.
Times of change
In 2019 the Trustees initiated a multi-
year Business Process and Technology
Programme (see page 15). The decision
to move to cloud-based services
enabled our staff to quickly adapt to
current remote working arrangements.
External stakeholders will begin to see
the fruits of behind-the-scenes work
carried out in 2020 when we launch a
new, unified web platform in 2021. We
have exciting plans for our digital future,
including delivering a range of enhanced
digital services.
In November 2020 we announced
that Andreas Barckow will succeed
Hans Hoogervorst as Chair of the
International Accounting Standards
Board from July 2021. The Trustees’
Nominating Committee, under the
leadership of Michel Madelain,
undertook an extensive global public
search to identify Hans’s successor. Hans
is only the second Chair of the Board
and this was a critical appointment.
Under Hans’s leadership, the Board
completed reforms responding to the
global financial crisis and substantially
enhanced some of the most
fundamental accounting standards,
including lease accounting, financial
instruments, revenue recognition and
insurance contracts. On behalf of the
Trustees, I would like to thank Hans for
his outstanding service and wish him
well with his future endeavours.
Sustainability reporting
For the Trustees, a lot of effort during
2020 was invested in preparing for our
five-yearly strategy review. Beginning
in late 2019 and throughout 2020, the
Trustees met with key stakeholders from
around the world to seek their views on
our organisational priorities. A recurring
theme of those discussions was a desire
for accelerated progress in sustainability
reporting. Responding to this desire,
we split the strategy review into two
"Under Hans's leadership,
the Board substantially
enhanced some of the most
fundamental accounting
standards. On behalf
of the Trustees, I would
like to thank him for his
outstanding service."
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IFRS Foundation Annual Report 2020
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Focusing our strategy
phases—a first, more urgent phase that
sought feedback on the demand for
global sustainability reporting standards
and on whether the IFRS Foundation
should play a role in the development of
such standards. A second review phase
will focus on other matters.
A Task Force of Trustees led the first
research phase, and my thanks go to
Lucrezia Reichlin for leading this work
and to all members of the Task Force.
On 30 September 2020 we published
our request for views about the need
for a single set of global sustainability
standards; my fellow Trustees have led
comprehensive outreach programmes
in their own jurisdictions to inform our
decision-making and to encourage broad
participation across all geographies and
stakeholder groups.
These programmes included more than
400 engagements across 33 jurisdictions,
participation in more than 20 public
events hosted by third parties and the
hosting of webinars that attracted more
than 3,000 registrants. After completing
the outreach, the Foundation received
576 comment letters from a diverse set
of organisations and individuals. The
Trustees wish to thank everyone
who participated in the events and
responded to our consultation paper.
Responses to that paper are publicly
available on our website.
Analysis of the feedback received
indicates broad support for a global
approach to setting sustainability
reporting standards and for the
Foundation to play a role. Based on
this feedback, the Trustees intend to
move quickly in their work considering
the formation of a new sustainability
reporting standards board as a sister
board to the International Accounting
Standards Board within the overall
governance framework of the
Foundation.
In 2020 the Trustees continued to
develop the already robust governance
arrangements for the Foundation. This
included publishing a revised Due Process
Handbook, which is used by the Board
and the IFRS Interpretations Committee
when developing and maintaining IFRS
Standards and the IFRS Taxonomy.
In conclusion
I have the privilege to work with
talented and experienced Trustees.
In particular, I would like to thank my
two Vice-Chairs Alan Beller and Takafumi
Sato, as well as Werner Brandt and
Kurt Schacht, who retired as Trustees
at the end of 2020 after substantially
contributing to the work of the
Foundation. I welcome their successors
(see page 22) and thank them for their
future service.
engagements
More than
More than
comment letters
400
576
3,000
33
across
jurisdictions
webinar registrants
Trustees' consultation on sustainability reporting
20
third-party events
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
6
Reflections on a decade of standard-setting
Report from the Chair of the International Accounting Standards Board
Hans Hoogervorst
2020 turned out to be a challenging
year because the coronavirus pandemic
affected our stakeholder engagement,
our working patterns and our priorities.
However, thanks to resilient staff,
supportive stakeholders and well-
developed technology, we were able
to deliver our work plan with some
important adjustments.
First, in March, when the UK
government—like that of many other
countries—imposed lockdown, we
moved all our activities online, including
monthly Board meetings and stakeholder
engagements. One particularly important
event was our first-ever fully virtual
conference in September, which merged
the annual IFRS Foundation Conference
with our annual World Standard-setters
Conference.
Second, we immediately supported our
stakeholders in their efforts to apply IFRS
Standards during the pandemic, working
swiftly to make tailored amendments
to the Standards and publishing
educational material where necessary.
See the case study on covid-19-related
support on page 16.
Third, we focused on completing
our most time-sensitive projects―
amendments to the insurance
contracts Standard, IFRS 17, and
amendments responding to the interest
rate benchmark reform. At the same
time, we provided some breathing space
where we could by deferring some of
the planned 2020 consultations, such
as the Agenda Consultation, and
extending the comment period on
other major consultations already out
for public comment.
Throughout 2020, we worked closely
with the IFRS Interpretations Committee
to support consistent application of our
Standards and continued to develop the
IFRS Taxonomy.
Priorities for 2021
Every five years, we ask stakeholders for
their input via an agenda consultation
to help us set our work plan for the next
five years. We last went through this
process in 2015–16 and have since been
working on the projects identified as
priorities, many of which aim to make
communicating information in financial
reports more effective.
Our third Agenda Consultation will
ask stakeholders what the strategic
direction of our work should be and
how we should balance the Board’s
“I thank all my
colleagues and friends
both within the IFRS
Foundation and across
the world for the
immense support over
the past decade.”
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IFRS Foundation Annual Report 2020
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Reflections on a decade of standard-setting
activities, what the criteria should be
for determining which projects to add
to our work plan, and which financial
reporting issues we should prioritise
from 2022 to 2026.
During the consultation, the Board will
continue working on projects already
underway, including consulting on an
updated version of the Management
Commentary Practice Statement and on
proposals to improve the effectiveness
of disclosures in the notes to the
financial statements.
The Agenda Consultation is an important
opportunity for everybody with an
interest in financial reporting to provide
input to help the Board determine its
next five-year work plan and shape
financial reporting for the future.
Our work with the Interpretations
Committee remains a priority and
we will also advance the post-
implementation reviews of IFRS 9,
IFRS 10, IFRS 11 and IFRS 12. In all our
work, we will consider how we can
improve the understandability and
accessibility of our requirements.
Thank you and farewell
This is my last report as Chair of the
Board—my second term comes to an
end on 30 June.
The past 10 memorable years have
had many highlights. I have thoroughly
enjoyed visiting many parts of the
world, discussing a range of financial
reporting issues with a variety of people
and organisations that make up our
stakeholders. I was often struck by the
passion of the accounting community
and the intensity of the debates, which
made my job really interesting. Some
debates, such as the one on the merits
of fair value measurement, have actually
subsided as we put a lot of effort in
better explaining our positions.
I am proud the Board made significant
improvements to our suite of IFRS
Standards, particularly our work in
response to the financial crisis and the
completion of the ‘big four’ Standards
on financial instruments, revenue, leases
and insurance contracts. The revision of
the Conceptual Framework for Financial
Reporting solidified the underpinning
of our Standards, and the Management
Commentary Practice Statement and the
Primary Financial Statements projects
will bring significant improvements
in the communication of financial
information to investors.
In the wake of these important
Standards, we have put considerable
efforts both into supporting companies
implementing the new requirements
and in supporting consistent application.
The Interpretations Committee made
great progress in terms of timeliness
and helpfulness.
It has also been rewarding to experience
how the support for the Foundation and
the Board has increased over the years—
evidenced also in the positive tone of
the comment letters to the Trustees’
consultation on sustainability reporting.
I would like to take this opportunity
to thank all my colleagues and friends
both within the IFRS Foundation
and across the world for the engaging
discussions, helpful contributions and
immense support over the past decade. I
would also like the thank the Trustees for
their devotion to the Foundation and its
mission, and for their generous support
and advice over the years. A special thanks
goes to my Vice-Chair Sue Lloyd, with
whom I could share many responsibilities
and whose outstanding qualities are widely
recognised in the world of accounting.
A warm thanks also to all those
stakeholders who have taken the time to
provide us with comments on our work
and thoughtful input during the crisis
caused by the pandemic.
As the Board enters its third decade,
I wish my successor Andreas Barckow,
who knows our organisation very well,
the very best for his tenure.
IFRS Foundation Conference, London, 2011
KASB 20th Anniversary, Seoul, 2019
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IFRS Foundation Annual Report 2020
8
Our objectives and how we create value
• People
(staff, governance,
advisory bodies)
• Stakeholders
• Infrastructure
(IT and offices)
• Financial capital
(donations and self-
generated income)
• Intellectual property,
brand, processes
• Develop and maintain
IFRS Standards, the
IFRS Taxonomy and the
IFRS for SMEs Standard
• Support consistent
application of our
Standards
• Facilitate stakeholder
involvement in our
work and access to
materials
• Attract, develop and
support our people
• Protect brand and
intellectual property
• Use resources
efficiently
• High-quality
Standards and other
materials
• Resilient and high-
performing people
• Engaged stakeholders
and worldwide
organisational
support
• Widespread use of
our Standards around
the world
• Increased transparency
in financial reporting
• Strengthened
accountability in
financial markets
• Increased comparability
and consistent
application leading to
more informed decision
making and lower cost
of capital and reporting
• Improved trust, growth
and long-term stability
in the global economy
Resources
Activities Outputs
The IFRS Foundation’s objectives are set out in the
Constitution. They are to:
• develop a single set of high-quality, understandable,
enforceable and globally accepted financial reporting
standards based upon clearly articulated principles;
• promote the use and rigorous application of those
standards;
• take account of the needs of varied sizes and types of
companies in diverse economic settings; and
• promote and facilitate adoption of those standards.
To serve the public interest:
• we are international and collaborative;
• we set clear principles and create practical solutions;
• we think independently and welcome feedback;
• we work professionally in a transparent way; and
• we support and take care of each other.
Impact
Our values
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
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Our objectives and how we create value Our people
Our people drive the implementation of our strategy.
We have a diverse workforce with a wide range of skills
and expertise.
At the end of December 2020 we had 156 staff from 36
different countries, contributing their perspectives and
experiences to help us meet our objectives.
To help our staff thrive and perform their best, we have
continued to invest in developing their potential through
training, coaching and mentoring.
During 2020 we had a particular focus on supporting staff
and their well-being due to the challenges brought about
by the covid-19 pandemic. 97% of staff responding to our
engagement survey said they felt supported at work
during the pandemic.
I work on various technical projects where I perform
research and analysis, discuss issues with stakeholders
and develop papers for Board meetings
.
One of these
projects is the Targeted Standards-level Review of
Disclosures where we are developing proposals to
improve the usefulness of disclosures in the notes to the
financial statements
.
Another is the Board’s third Agenda
Consultation, which is all about the strategic balance and
priority of the Board’s work for the next five years
.
With
this latter project, I have had the chance to interact with
colleagues I would not otherwise collaborate with, which
is giving me a different perspective on our work
.
I have worked with XBRL taxonomies since the field first
rose to prominence about a decade ago, so I really enjoy
the work I do on the IFRS Taxonomy
.
The IFRS Taxonomy
aims to improve communication between companies
and investors by bringing the financial statements into a
digital format
.
My day-to-day job involves working with
the other technical teams to ensure any amendments
made to IFRS Standards are adequately reflected in the
IFRS Taxonomy
.
Joined: August 2017
From: Nigeria
Joined: January 2018
From: India
Aishat Akinwale
IASB Technical Staff
Vivek Baid
IASB Technical Staff
staff
156
36
different
countries
97%
of staff
surveyed felt
supported during
the pandemic
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IFRS Foundation Annual Report 2020
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Our people (continued)
I focus on supporting the consistent application and
maintenance of IFRS Standards
.
My colleagues and I work
closely with the IFRS Interpretations Committee and the
Board to help address questions raised by stakeholders
that arise as the Standards are applied
.
Among other
things, my daily work involves researching and analysing
questions, discussing these questions with stakeholders
and preparing papers for Board and Interpretations
Committee meetings
.
At any given moment, I could
be working on a number of application questions and
analysing the finer details of various Standards
.
I ensure the facilities in our London office meet the needs
of our organisation and our staff
.
2020 presented a range
of challenges in that our staff were all working remotely
from March onwards due to the pandemic, so it was like
suddenly having 150 offices
.
We had to ensure they were
as well equipped and supported in their home set-ups
as possible, while simultaneously getting the physical
premises covid-19 compliant in readiness for a return
to office
.
Joined: April 2015
From: India/Canada
Joined: May 2019
From: United Kingdom
Jawaid Dossani
IASB Technical Staff
Jason Goodchild
Facilities Manager
Staff length of service
14%
<1 year
19%
1 yr
26%
2-3 yrs
26%
7+ yrs
15%
4-6 yrs
26%
25-34
3%
21-24
32%
35-44
23%
45-54
16%
55+
Staff by function
Staff age distribution
8%
Board
42% 50%
Operational Technical
All staff
42%
Male
58%
Female
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IFRS Foundation Annual Report 2020
11
Our people (continued) Our people (continued)
I come from a business and legal research background
and work in the Information Management team
.
My
day-to-day job involves leading the provision of research
and information services and ensuring they meet the
Foundation’s needs
.
Over the past year, I have also focused
on improving information management practices so that
we all work more efficiently and effectively
.
This work is
part of the Business Process and Technology Programme
(see page 15)
.
Working as part of a friendly and busy HR team, I manage
the administration of a range of processes which span
an employee’s life cycle at the Foundation
.
We have
continued to recruit during the covid-19 pandemic and
have successfully adapted our onboarding processes
to suit remote working
.
I have helped tailor each new
joiner’s experience, responding to their individual needs
to ensure they have a positive and stimulating induction
and helping them to feel supported and connected to the
organisation while we work remotely
.
As the Director of the Foundation's Asia-Oceania office,
which is in Tokyo, my overall goal is to ensure we
support the work of the Board and the Interpretations
Committee
.
Together with four colleagues, I engage
with various important stakeholders in the Asia-Oceania
region by hosting or co-hosting seminars and workshops
.
We also frequently meet with Japanese stakeholders to
encourage the voluntary adoption of IFRS Standards in
this country
.
Joined: July 2019
From: United Kingdom
Joined: September 2017
From: United Kingdom
Joined: May 2018
From: Japan
Jasmin Hollingum
Information and
Research Lead
Malini Shah
HR Executive
Makoto Takahashi
Director of the
Asia-Oceania office
Staff engagement
We conducted our second engagement survey towards
the end of 2020, working with an independent research
agency to help us measure, understand and improve
staff engagement.
87% of staff participated in the survey, compared with
77% in 2018, and the net promoter score* was +39 (up
from +17 in 2018).
Expect to work for the Foundation in one year
95%
97%
2018
2020
Proud to work for the Foundation
*Employee net promoter score is measured on a scale from -100 to +100.
2018
2020
86%
91%
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IFRS Foundation Annual Report 2020
12
International Accounting Standards Board
As at 31 December 2020
Gary Kabureck and Chungwoo Suh completed their second
terms on 30 June 2020. Darrel Scott completed his second
term on 30 September 2020.
The required geographical balance of the Board is set out
in the Constitution.
More information about the Board, including member
biographies, can be found at www.ifrs.org/groups/
international-accounting-standards-board.
* Part-time Board member
** Appointed 1 August 2020
*** Appointed 1 October 2020
Nick Anderson
From: United Kingdom
Region: Europe
First term ends
31 August 2022
Bruce Mackenzie
***
From: South Africa
Region: Africa
First term ends
30 September 2025
Tadeu Cendon
From: Brazil
Region: Americas
First term ends
30 June 2024
Tom Scott
From: Canada
Region: Americas
First term ends
31 March 2022
Martin Edelmann
From: Germany
Region: Europe
Second term ends
30 June 2021
Rika Suzuki
From: Japan
Region: Asia-Oceania
First term ends
30 June 2024
Françoise Flores
*
From: France
Region: Europe
Retires 30 June 2021
Ann Tarca
From: Australia
Region: Asia-Oceania
First term ends
30 June 2022
Zach Gast
**
From: United States
Region: Americas
First term ends
31 July 2025
Mary Tokar
From: United States
Region: Americas
Second term ends
30 June 2022
Jianqiao Lu
From: China
Region: Asia-Oceania
First term ends
31 August 2022
Hans Hoogervorst
Chair
From: The Netherlands
Region: Europe
Second term ends
30 June 2021
Sue Lloyd
Vice-Chair
From: New Zealand
Region: Asia-Oceania
Second term ends
31 December 2023
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IFRS Foundation Annual Report 2020
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Our stakeholders and how we engage
Effective stakeholder engagement is a prerequisite for the IFRS Foundation to achieve its objectives. The Foundation publishes
formal consultation documents and engages with various stakeholder groups, tailoring that engagement to their needs.
*The Trustees thank the Chinese Ministry of Finance for providing the permanent secretariat for the group.
Stakeholders Why? How?
Academia
Provide high-quality research,
teach students about
IFRS Standards
Annual academic research forum, tailored engagement,
literature reviews as part of the Board’s standard-setting work
Accounting
profession
and auditors
Promote, develop and support
accountants worldwide, audit
financial statements
Joint conferences and events, regular meetings, cooperation
with the International Federation of Accountants
Commercial
partners
Have a commercial relationship
with the Foundation
Products, services, licensing material and intellectual
property
Companies
Use our Standards when
preparing financial statements,
provide important input to
consultations and feedback
on application of Standards
Meetings with the Global Preparers Forum (an advisory
group consisting of preparers of financial statements),
regular meetings, conferences, educational and
explanatory materials
Funding
providers
Provide financial support Regular updates and engagement
Investors
Use financial reports, provide
important input and feedback
to the standard-setting process
Meetings with the Capital Markets Advisory Committee
(advisory group consisting of investors), Investors in Financial
Reporting programme, dedicated investor relations team,
regular communication and meetings
Media
Publish information or comment
on technical developments to
a wider audience
Press office, regular communication and briefings
Policy makers
Decide whether to adopt,
endorse and fund
Regular meetings and events
Regulators
Enforce use of IFRS Standards,
provide subject-matter expertise
Cooperation and regular meetings, including with the
Basel Committee on Banking Supervision, the International
Organization of Securities Commissions (IOSCO) and
jurisdictional regulators
Standard-
setters
Provide national knowledge
and relationships, technical
expertise and standard-setting
experience, play a role in
endorsing Standards
Annual conference for standard-setters, as well as meetings
with the Accounting Standards Advisory Forum, the
Emerging Economies Group*, and the International Forum
of Accounting Standard-setters, regular engagement with
individual standard-setters
Students
Future stakeholders on
completion of accounting studies
Virtual and in-person engagement with student groups
International Accounting Standards Board
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IFRS Foundation Annual Report 2020
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2020 review
We made good progress delivering our strategy and our organisational priorities for 2020.
The Trustees oversee the
activities of the Board,
including its due process
and outreach, regularly
review the strategic
direction of the Foundation
as a whole and direct key
senior appointments.
• Published the revised Due Process Handbook and finalised consequential
amendments to the Constitution
• Maintained engagement with the Monitoring Board, including a meeting of
all Trustees with the Monitoring Board in Brussels (February 2020) and regular
virtual meetings
• Prepared for the forthcoming Trustees’ strategy review by accelerating first phase
dealing with sustainability reporting in response to initial feedback—published
Consultation Paper on Sustainability Reporting (see below)
• Appointed Andreas Barckow as the new Chair of the Board, and appointed two
other Board members
• Made other appointments to the Trustees, the Interpretations Committee
and the Advisory Council
Governance and strategy
A priority for 2020 was to prepare for the periodic strategy review of the IFRS Foundation. After initial engagement on
this topic with stakeholders, the Trustees decided to fast-track one element of the review by publishing their Consultation
Paper on Sustainability Reporting in September. The aim of the paper was to assess demand for
global sustainability standards and, if demand is strong, assess whether and to what extent the
Foundation might contribute to the development of such standards.
Throughout a three-month consultation on the paper, the Trustees led comprehensive outreach.
Feedback from these engagements and related comment letters indicates growing demand for
improving the global consistency and comparability of sustainability reporting. Respondents also
recognised that urgent steps need to be taken and the broad demand for the Foundation to play
a role.
During 2021 the Trustees will continue their analysis of the responses to the consultation paper
and take decisions regarding next steps.
Case study: Sustainability
Ensure engagement in
our work is undertaken
across stakeholder types
and jurisdictions.
• Enhanced stakeholder engagement on strategic priorities, specifically
on sustainability
• Conducted outreach on consultation documents
• Deepened and broadened stakeholder engagement through virtual meetings
and conference in response to the covid-19 pandemic
• Successfully organised a fully virtual conference in September with nearly
500 participants from over 100 countries and more than 50 presenters,
which merged the annual IFRS Foundation Conference and the annual
World Standard-setters Conference
• Carried out research and focus groups to better understand our stakeholders’
needs in terms of digital experience
Stakeholder engagement
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IFRS Foundation Annual Report 2020
15
2020 review (continued)
Ensure the well-being
and development of
the human talent of
the Foundation.
• Continued efforts to develop staff
• Focused on supporting staff’s adaptation to working remotely,
giving priority to their physical and mental well-being
• Undertook second staff engagement survey, with an 87%
participation rate
2020 review
Growth and development of our people
Ensure the Foundation
is operationally sound
and effective.
• Accelerated roll-out of internal technology solutions and training to ensure
efficiency as the organisation moved to remote working. Increased internal
communication to help staff with the rapid transition to new working patterns
• Successfully completed implementation of a new human resources system
• Made progress in all areas of the Business Process and Technology
Programme (see below)
Two years ago, we set out to improve how we work digitally, using modern systems and processes that make our
engagement with stakeholders more efficient and our organisation more effective. The goal is to have these systems
and processes in place by the end of 2022. A Trustee committee oversees this programme.
In 2020 we accelerated the roll-out of cloud-based systems and new ways of working when the covid-19 pandemic led
to our staff being entirely remote.
We continue to engage with stakeholders to understand how we could further improve their digital experience as we
develop our new systems. In 2021 we will be launching our new website with improved search capability and a new
Standards navigator, and implementing a new stakeholder relationship management system.
Case study: Business Process and Technology Programme
Efficient and effective operations
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IFRS Foundation Annual Report 2020
16
2020 review (continued)
Research issues and,
if appropriate, develop
major new financial
reporting requirements.
• Finalised time-sensitive amendments to IFRS 17 Insurance Contracts and IBOR
reform projects
• Published consultation documents, conducted outreach and/or analysed
feedback on:
– Exposure Draft General Presentation and Disclosures;
– Discussion Paper Business Combinations—Disclosures, Goodwill
and Impairment; and
– Discussion Paper Business Combinations under Common Control
• Advanced other research and standard-setting projects in progress
• Began post-implementation reviews on IFRS 10 Consolidated Financial
Statements, IFRS 11 Joint Arrangements and IFRS 12 Disclosure of Interests
in Other Entities and the classification and measurement requirements in
IFRS 9 Financial Instruments
IFRS Standards
Help stakeholders obtain
a common understanding
of financial reporting
requirements.
• Issued various final narrow-scope amendments and exposure drafts proposing
narrow-scope amendments
• Responded to submissions to the Interpretations Committee, for example by
publishing agenda decisions
• Provided covid-19-related support including an amendment to IFRS 16 Leases to
assist lessees accounting for covid-19-related rent concessions (see below)
• Highlighted requirements in IFRS Standards applicable to accounting for
climate-related matters in educational materials
Consistent application
Case study: Covid-19-related support
• educational material on the application
of IFRS 9 Financial Instruments in accounting
for expected credit losses in the context of
covid-19 (March 2020);
• educational material on the application of
IFRS 16 and other Standards to covid-19-related
rent concessions not accounted for using the
optional practical relief (April 2020);
At our 2020 Virtual Conference, we also held a panel discussion—involving investors, regulators and standard-setters—
on financial reporting complexities in times of heightened uncertainty, a topic also discussed in an article on our website.
Beyond its physical, emotional and economic toll, the covid-19 pandemic has raised financial reporting challenges.
To help stakeholders, staff monitored issues arising in accounting practice and acted where necessary to support the
consistent application of IFRS Standards. Specifically, we published:
• an amendment to IFRS 16 Leases to provide
optional practical relief for lessees in accounting for
covid-19-related rent concessions (May 2020); and
• educational material on going concern disclosures,
which are particularly important in the current
stressed economic environment (January 2021).
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
17
2020 review (continued)
Facilitate the digital
consumption of financial
information.
• Developed IFRS Taxonomy updates reflecting requirements in IFRS Standards
issued during the year and common reporting practices
• Supported regulators using or adopting the IFRS Taxonomy
2020 review (continued)
Provide financial reporting
requirements tailored for
companies that do not have
public accountability (SMEs).
• Published, conducted outreach and analysed feedback on the Request for
Information Comprehensive Review of the IFRS for SMEs Standard
IFRS for SMEs® Standard
IFRS Taxonomy
Improve the understandability
and accessibility of our financial
reporting requirements.
• Worked to reduce unnecessary complexity and cost for preparers, while
improving the quality of information provided to investors
• Drafted clear Standards. The Board is supported in achieving this through the
work of editorial (see below) and translation teams, and external reviewers
• Made the Standards and related materials more accessible, for example,
by publishing IFRS Standards with annotations and cross-references to
other materials, publishing semi-annual compilations of agenda decisions,
and improving technology through the Business Process and Technology
Programme (see page 15) to make IFRS Standards and other materials easier
to navigate
Words matter. This is especially true when those words are translated and applied by stakeholders around the world.
The editorial team helps ensure that IFRS Standards are written as clearly as possible—with a logical structure, short
sentences and consistent terminology. Economic transactions may be complex, but we strive to ensure the articulation
of accounting requirements is clear and concise.
Case study: Editorial
Understandability and accessibility
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
18
2021 priorities
Follow up on the
Trustees’ sustainability
reporting consultation
and complete review
of the organisation’s
strategy
Ensure a successful
handover from
Hans Hoogervorst to
Andreas Barckow as new
Chair of the Board
Continue focusing on the
well-being and development
of staff and support of
stakeholders during
the pandemic
Continue rolling out
projects in our Business
Process and Technology
Programme (see page 15),
including enhanced
online offering
Publish and discuss
feedback on our third
Agenda Consultation
to help determine the
Board’s priorities for
2022 to 2026
Assess whether our
Standards work as
intended by progressing
post-implementation reviews
of IFRS 9 (classification
and measurement
requirements) and
IFRS 10, IFRS 11,
IFRS 12
Advance other technical
projects, including those
on which we consulted
publicly in 2020
Determine whether and
how to update the IFRS for
SMEs Standard as part of a
comprehensive review
Continue supporting
consistent application of
IFRS Standards
Continue developing
the IFRS Taxonomy and
supporting regulators
that adopt it
Engage with
a wide range of
stakeholders including
encouraging academic
research to inform the Board’s
post-implementation
reviews
Continue considering ways
to increase the understandability
and accessibility of
IFRS Standards
Continue efforts to
enhance IFRS Standards
by consulting on Rate-
regulated Activities; Disclosure
Initiative—Targeted Standard-
level Review; Management
Commentary; and Disclosure
Initiative—Subsidiaries
that are SMEs
Use lessons learnt
during the pandemic
to shape our future
working practices
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
19
Key organisational risks
The IFRS Foundation’s Executive Risk Committee identifies,
evaluates and manages the risks faced by the Foundation. It
reports to the Trustees’ Audit, Finance and Risk Committee.
The Committee reviews the key risks for the Foundation, and
the appropriate accompanying mitigation actions, regularly
throughout the year.
Over the course of 2020, the covid-19 pandemic had a
pervasive effect on all aspects of the operations of the
Foundation and its principal risks described below:
Brand
Geo-political
Product
Technological
infrastructure
• The risk that the Foundation fails to protect its reputation as a professional
and competent global accounting standard-setter.
• The risk that the Foundation is perceived to lose its organisational relevance.
• The risk that reduced support for international cooperation affects
the Foundation or influences support for adoption of IFRS Standards in
some jurisdictions.
• The risk that the Foundation fails to develop high-quality IFRS Standards
or an IFRS Taxonomy that meets stakeholders’ needs.
• The risk for the Foundation that inconsistent application of IFRS Standards and
the IFRS Taxonomy undermines the benefits of global financial reporting.
• The risk that the Foundation's IT infrastructure and stored data are compromised
as a result of cyber hacks, phishing campaigns, system failure and/or human error.
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
20
Public accountability
Strategy and oversight
IFRS
Advisory Council
IFRS Foundation Monitoring Board
IFRS Foundation Trustees
Audit, Finance
and Risk
Committee
Business Process
and Technology
Committee
Due Process
Oversight
Committee
Education and
Content Services
Committee*
Ethics
Committee**
Executive
Committee
Human Capital
Committee
Nominating
Committee
Sustainability
Steering
Committee**
Standard-setting and
related activities
International Accounting Standards Board
IFRS Interpretations Committee
Our structure
The IFRS Foundation’s governance structure is designed to keep standard-setting independent of special interests
and to maintain a high level of accountability to stakeholders.
* Currently inactive
** New in 2021
The Monitoring Board is a group of capital market authorities
responsible for setting out the form and content of financial
reporting in their jurisdictions. It reinforces the public
oversight of the Foundation and the Trustees. The Monitoring
Board is responsible for approving all Trustee appointments.
See page 25.
Chair: Jean-Paul Servais
The 22 Trustees from all over the world, and with various
professional backgrounds, are responsible for the governance
and strategic direction of the organisation, for maintaining the
Foundation’s Constitution and the Due Process Handbook, for
appointing members to the Board and its advisory bodies, and
for ensuring appropriate financing arrangements are in place.
See page 21.
Chair: Erkki Liikanen
The Board is the independent standard-setting body of the
Foundation. Its members are appointed from varied national
and professional backgrounds, including academia, accountancy,
investment, preparation of financial statements, regulation
and standard-setting. The Board issues IFRS Standards, the
IFRS for SMEs Standard and the IFRS Taxonomy. See page 12.
Chair: Hans Hoogervorst
The Interpretations Committee comprises 14 external
members and a non-voting chair that works with the Board
by responding to questions about applying IFRS Standards.
The Interpretations Committee proposes that the Board
makes narrow-scope amendments to the Standards, develops
IFRIC® Interpretations of the Standards and publishes agenda
decisions. See page 59.
Chair: Sue Lloyd
The Advisory Council is the formal strategic advisory body to
the Trustees, consisting of representatives from wide-ranging
groups affected by and interested in the Foundation’s work.
See page 56.
Chair: Bill Coen
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
21
Trustees of the IFRS Foundation
At 31 December 2020
Erkki Liikanen (Europe)
Chair
Former Governor of
the Bank of Finland
First term ends 30 September 2021
Attendance 2020: 7 out of 7 meetings
Alan Beller (Americas)
Vice-Chair
Senior Counsel at
Cleary Gottlieb Steen & Hamilton LLP
and member of the Sustainability
Accounting Standards Board
Second term ended 31 December 2020
Attendance 2020: 7 out of 7 meetings
Takafumi Sato (at large)
Vice-Chair
Former President of
Japan Exchange Regulation
Second term ended 31 December 2020
Attendance 2020: 7 out of 7 meetings
Guillermo Babatz (Americas)
Managing Partner at Atik Capital, S.C.
Second term ends 31 December 2021
Attendance 2020: 7 out of 7 meetings
Else Bos (Europe)
Member of the governing Board,
Executive Director and Chair for
Prudential Supervision
at the Dutch Central Bank
Second term ends 31 December 2022
Attendance 2020: 5 out of 7 meetings
Colette Bowe (Europe)
Member of the Bank of England’s
Financial Policy Committee
and former Chair of the
UK Banking Standards Board
Second term ends 31 December 2023
Attendance 2020: 7 out of 7 meetings
Werner Brandt (Europe)
Former Board member and
CFO of SAP SE
Second term ended 31 December 2020
Attendance 2020: 7 out of 7 meetings
Alexsandro Broedel (Americas)
Group Chief Financial Officer
at Itaú Unibanco
First term ends 31 December 2022
Attendance 2020: 6 out of 7 meetings
Suresh P. Kana (Africa)
Former Chair of the Financial
Reporting Standards Council
of South Africa
First term ends 31 December 2021
Attendance 2020: 7 out of 7 meetings
Teresa Ko (Asia-Oceania) *
Chairman of Freshfields Bruckhaus
Deringer
Second term ends 31 December 2023
Attendance 2020: 7 out of 7 meetings
Su-Keun Kwak (Asia-Oceania)
Professor of Accounting at
Seoul National University
Second term ends 31 December 2022
Attendance 2020: 7 out of 7 meetings
Larry Leva (Americas) *
Former Global Vice-Chairman—
Quality, Risk and Regulatory for
KPMG International
Second term ends 31 December 2023
Attendance 2020: 7 out of 7 meetings
Michel Madelain (at large)
Former Vice-Chairman and
President of Moody’s Investors
Service
Second term ends 31 December 2023
Attendance 2020: 7 out of 7 meetings
Kazuyuki Masu (Asia-Oceania)
Executive Vice President,
CFO and a member of the Board
of Mitsubishi Corporation
First term ends 31 December 2021
Attendance 2020: 7 out of 7 meetings
Ross McInnes (Europe)
Chairman of the Board of Safran
Second term ends 31 December 2023
Attendance 2020: 7 out of 7 meetings
* Appointed Vice-Chair, effective 1 January 2021
.
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
22
Joanna Perry (Asia-Oceania)
Non-executive Director
and former Chair of the
IFRS Advisory Council
First term ends 31 December 2022
Attendance 2020: 6 out of 7 meetings
Vinod Rai (Asia-Oceania)
Former Comptroller
and Auditor General of India
Second term ends 31 December 2023
Attendance 2020: 7 out of 7 meetings
Lucrezia Reichlin (Europe)
Professor of Economics at the
London Business School
Second term ends 31 December 2023
Attendance 2020: 4 out of 7 meetings
Kurt Schacht (Americas)
Managing Director of CFA
Institute’s Standards and
Advocacy Division
Second term ended 31 December 2020
Attendance 2020: 7 out of 7 meetings
Gender split
Sarah J
.
Al Suhaimi (at large)
Chair of the Board of Directors of
Tadawul, the Saudi Stock Exchange,
and the CEO of National Commercial
Bank Capital
First term ends 31 December 2021
Attendance 2020: 4 out of 7 meetings
Maria Theofilaktidis (Americas)
Executive Vice President
of Global Finance at
the Bank of Nova Scotia
First term ends 31 December 2022
Attendance 2020: 7 out of 7 meetings
Guangyao Zhu (Asia-Oceania)
Former Vice Finance Minister
of the People’s Republic of China
Second term ends 31 December 2022
Attendance 2020: 4 out of 7 meetings
More information about the Trustees, including their biographies, can be found at
www
.
ifrs
.
org
/
groups
/
trustees-of-the-ifrs-foundation
.
FemaleMale
New Trustees serving
from 1 January 2021
Robert Pozen is a financial
executive with a strong interest
in public policy who has been
active in business, government
and academia over a successful
career
.
He is a prolific author
and is currently a senior
lecturer at MIT Sloan School
of Management and a non-
resident senior fellow at the
Brookings Institution
.
Kenneth Robinson has a strong
background in auditing and risk
and a wealth of experience in
governance
.
He spent almost
40 years in senior positions at
Procter & Gamble and served
as a trustee of the Financial
Accounting Foundation (FAF)
.
He is a board member of
Paylocity and Morgan Stanley
.
Erhard Schipporeit has a long
and distinguished career in
executive management, having
previously served as CFO and
Chairman of VARTA and as
a member of the executive
board of E
.
ON
.
He is currently
an independent management
consultant and a supervisory
board member for several
German companies
.
Trustees of the IFRS Foundation (continued)
At 31 December 2020
32%
68%
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
23
At 31 December 2020
Trustee committees
The Trustees meet three times a year and operate through several committees. The following committees met in 2020.
Business Process and Technology Committee Human Capital Committee
Chair
:
Werner Brandt
Members
:
Suresh Kana, Su-Keun Kwak, Vinod Rai,
Lucrezia Reichlin
Meetings in 2020
:
Five
Responsibilities: Oversees the Foundation’s Business
Process and Technology Programme (see page 15)
.
Chair
:
Takafumi Sato
Members
:
Sarah Al Suhaimi, Guillermo Babatz,
Alan Beller, Colette Bowe, Joanna Perry, Kurt Schacht
Meetings in 2020
:
Three
Responsibilities: Oversees the Foundation’s people
management strategy, policies and processes to ensure
that they meet the needs of the organisation
.
Due Process Oversight Committee Nominating Committee
Chair
:
Alan Beller
Members
:
Guillermo Babatz, Alexsandro Broedel,
Teresa Ko, Larry Leva, Michel Madelain, Ross McInnes,
Vinod Rai
Meetings in 2020
:
Four
Responsibilities: Monitors compliance with the due
process of the International Accounting Standards Board
and the IFRS Interpretations Committee as set out in the
Due Process Handbook on behalf of the Trustees
.
Chair
:
Michel Madelain
Members
:
Else Bos, Werner Brandt, Teresa Ko,
Takafumi Sato
Meetings in 2020
:
Nine
Responsibilities: Makes recommendations to the
Trustees regarding nomination procedures and
candidates for the Trustees, Board, Advisory Council
and IFRS Interpretations Committee
.
Audit, Finance and Risk Committee
Executive Committee
Chair
:
Larry Leva
Members
:
Colette Bowe, Kazuyuki Masu, Kurt Schacht,
Maria Theofilaktidis, Guangyao Zhu
Meetings in 2020
:
Five
Responsibilities: Approves the budget of the IFRS
Foundation and oversees fundraising
.
Assists the Trustees
in reviewing the financial reporting process, the system of
internal control, its approach to managing organisational
risks, the audit process and the organisation’s mechanism
for monitoring compliance with the laws and regulations in
the jurisdictions in which it operates
.
Chair
:
Erkki Liikanen
Members
:
Alan Beller, Else Bos, Werner Brandt,
Larry Leva, Michel Madelain, Takafumi Sato
Meetings in 2020
:
Seven
Responsibilities: Takes delegated responsibility on behalf
of the Trustees for its oversight of the Foundation’s
activities to ensure co-ordination and consistency
.
Leads
the periodic reviews of the Foundation's Constitution and
any other organisational strategy reviews
.
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
24
Taking steps for a new impetus
Report from the Chair of the IFRS Foundation Monitoring Board
The year 2020 presented unexpected
and unprecedented global challenges
for society. The uncertainties caused by
the covid-19 pandemic have also tested
the resilience of our capital markets and
the global financial system and affected
most industries and organisations
around the world.
The enduring pandemic underscores
the critical importance of a timely
flow of high-quality, material and
reliable information to help investors
identify opportunities and risks across
the world, thus improving capital
allocation. Consistent application of
high-quality accounting standards
is essential for effective, fair and
transparent capital markets.
Against this backdrop, the Monitoring
Board reiterates its commitment to the
public interest oversight of the IFRS
Foundation and to the Trustees’ work
to promote the development of a single
set of high-quality, comprehensible,
enforceable and globally accepted
financial reporting standards.
Covid-19 has also affected the work of
the Foundation and the International
Accounting Standards Board, challenging
their plans and requiring a reprioritisation
of their respective agendas. I would
like to commend the Trustees and the
Board for actively monitoring related
developments and for responding
effectively to these challenges, both
operational and in standard-setting.
Despite these challenges, the Foundation
and the Board have continued to make
progress on their work plans and
delivered on key priorities without
major disruptions, while also providing
sufficient flexibility for extending the
timelines of some projects to allow for
more stakeholder engagement and
responding to the financial reporting
challenges of their constituents.
2020 developments
One major achievement in 2020 was the
publication of the revised Due Process
Handbook, which enhances and clarifies
aspects of the due process applied by
the Board and the IFRS Interpretations
Committee. The review was a key focus
area for the Monitoring Board, and the
Monitoring Board thanks the Trustees
for being receptive to its input.
Another significant development was
the publication by the Trustees of a
consultation paper on sustainability
reporting, exploring whether there is a
need for global sustainability reporting
standards, whether the Foundation
should play a role in this area and, if so,
what the scope of this role should be.
Since the publication of the consultation
paper, the Trustees have engaged in
extensive outreach. By the close of
the comment period, the Foundation
had received over 550 responses from
stakeholders. The Monitoring Board,
which has established a dedicated
working group, has expressed its
intention to closely engage on this
project with the Trustees before
they determine additional steps. The
Monitoring Board´s engagement was
noted in the consultation paper and the
Monitoring Board will act accordingly.
The Monitoring Board continued to
engage in the nominations process for
the appointment of new Trustees to the
Foundation, approving the nomination
of four new Trustees. On behalf of the
Monitoring Board, I would like to thank
Alan Beller and Takafumi Sato, Trustee
Vice-Chairs, whose terms expired in
December 2020, for their leadership
and outstanding contributions to the
Foundation over the last few years.
I would also like to welcome Teresa Ko
and Larry Leva in their new roles as
Trustee Vice-Chairs. We look forward
to continuing our excellent dialogue
with the Trustees in 2021.
Board Chair succession
One major development in 2020 was the
appointment of Andreas Barckow as the
next Chair of the Board. He will start in
July 2021, succeeding Hans Hoogervorst.
The Monitoring Board welcomes
Andreas, who has all the credentials to
lead the Board into the future, and looks
forward to working with him to meet
our shared goals.
While we look forward to continuing
our excellent working relationship
with Hans in the first half of 2021,
the Monitoring Board would like
to acknowledge his distinguished
leadership and landmark contribution to
the Board over the last decade, including
his excellent communication skills.
Under Hans’s leadership, the Board has
undertaken a major overhaul of
IFRS Standards, completing major
projects on key standards such as
IFRS 9 Financial Instruments
,
IFRS 15 Revenue from Contracts
with Customers, IFRS 16 Leases
and IFRS 17 Insurance Contracts.
Jean-Paul Servais
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IFRS Foundation Annual Report 2020
25
Taking steps for a new impetus
Public authority Member Position
IOSCO Jean-Paul Servais Chair of the Belgian Financial
Services and Markets Authority
and representative of the
IOSCO Board (Vice-Chair)
Public authority Member Position
Brazil Securities and
Exchange Commission
(Comissão de Valores
Mobiliários)
Marcelo Barbosa Chair
European Commission Valdis Dombrovskis Vice-President for the Euro
and Social Dialogue, also in
charge of Financial Stability,
Financial Services and Capital
Markets Union
IOSCO Ünal Eryilmaz Board member of the Capital
Markets Board of Turkey
and representative of the
IOSCO Growth and Emerging
Markets Committee
Japan Financial
Services Agency
Tokio Morita Vice Minister for
International Affairs
People’s Republic of
China Ministry of Finance
Cheng Lihua Vice Minister
South Korea Financial
Services Commission
JongKu Choi Chair
United States Securities
and Exchange Commission
Jay Clayton * Chair
Public authority Member Position
Argentina Securities and
Exchange Commission
(Comisión Nacional
de Valores)
Marcos Ayerra Chair and representative of the
IOSCO Inter-American Regional
Committee (Chair)
Basel Committee on
Banking Supervision
Fernando Vargas Representative
South Africa Financial
Sector Conduct Authority
Jurgen Boyd Deputy Executive Officer
and representative of the
IOSCO Africa and Middle-East
Regional Committee
More information about the
Monitoring Board can be found at
www.ifrs.org/groups/ifrs-foundation-
monitoring-board.
Chair
Members
Observers
It has updated the Conceptual
Framework for Financial Reporting,
among other important projects. IFRS
Standards are globally recognised as
high-quality global financial reporting
standards as reflected by the fact
that currently over 140 jurisdictions
require use of the Standards.
The Monitoring Board wishes to
thank Hans for his availability to
the Monitoring Board and for his
commitment to the public interest,
which is key to Monitoring Board
members.
Thank you
Finally, I would like to express my
gratitude to the Monitoring Board
members, our Deputies Working
Group and the Secretariat for their
continuous support and commitment.
The Monitoring Board looks forward
to continuing to work closely with the
Trustees and the Board as they shape
their future direction and with global
stakeholders to support our common
objective of high-quality financial
reporting.
IFRS Foundation Monitoring Board
As at 31 December 2020
Jean-Paul Servais
* Jay Clayton stepped down from the SEC in December 2020 and was replaced by Allison Herren-Lee
in January 2021 when she became Acting Chair
.
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IFRS Foundation Annual Report 2020
26
Summary of financial
results 2020
The IFRS Foundation has been able
to operate effectively despite the
multiple challenges of the covid-19
pandemic. The Foundation is reporting
comprehensive income of £3.5 million
for 2020 (2019: £3.7 million).
Total income from all activities at
£30.1 million was comparable with
£30.9 million in 2019 and comprised:
• contributions: £18.1 million ( 9.5%);
• publications and related activities:
£11.7 million ( 11.1%); and
• other income: £315,000 ( 22.22%).
Total operating expenses decreased
from £28.0 million to £27.4 million
year on year:
• Board members and staff costs:
£19.7 million (
1.04%);
• other technical and operational
activities: £2.4 million ( 13.3%);
• advisory bodies: £77,000 ( 72.8%);
• publications and related activities:
£2.4 million (
6.03%);
• Trustee oversight: £771,000
( 26.9%); and
• premises and occupancy expenses:
£2.1 million ( 9.7%).
During the year, the Foundation
reviewed previously unrecognised tax
losses and determined that it is now
probable the taxable profits will be
available against which the tax losses
can be utilised. As a consequence, a
deferred tax asset of £569,000 has been
recognised in 2020 (note 5).
Net assets increased from £38.1 million
to £41.5 million.
Introduction to the financial statements
Contributions
60%
Revenue from
publications and
related activities
39%
Publications and
related activities
9%
Trustee oversight
3%
Premises and
occupancy
7%
Other income
1%
Income 2020
Operating expenses 2020
Income and expenditure highlights
£27.4 million
£30.9 million
2020
2019
Income
Operating expenses
£30.1 million
2020
£28.0 million
2019
Board members and
staff costs (operational
activities)
72%
Technical and
operational
9%
Advisory bodies
0.3%
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
27
Introduction to the financial statements
Funding
The Foundation’s income comes from
voluntary contributions and revenue
from the sale of subscription services,
publications and licensing of intellectual
property. Revenue is also generated
from conferences and speaker events.
Contractual licensing arrangements with
international accounting firms increased
licensing revenue by £1.6 million in 2020
and resulted in a decline of voluntary
contributions by a similar amount.
Otherwise, voluntary contributions
and licence fees have been reasonably
constant year on year.
Revenue from publications and
subscription services decreased by
£237,000, mainly due to the impact of
the pandemic on sales and the delivery
of publications. The switch from live
conferences to virtual conferences
during the year contributed to a
decline of publications and related
activities revenue of around £120,000
year on year. The Foundation's annual
conference was combined with
the annual World Standard-setters
Conference and held virtually.
Operating expenses
Staff costs for technical and operational
activities continue to be the most
significant cost for the Foundation and
at £19.7 million (2019: £19.5 million)
are around 72% of the Foundation’s cost
base. Total headcount increased from
As discussed in note 1, the Human Capital
Committee reviews, benchmarks and
recommends salary and benefits levels.
Other technical and operating costs
decreased overall by £368,000. The
decrease is primarily due to a reduction
in travel, meeting and office related
expenditure as a result of the travel
restrictions and the London office being
closed for most of the year. This was
offset to some extent by the additional
costs incurred to support remote
working as well as costs for the Business
Process and Technology Programme.
The Business Process and Technology
Programme, which is discussed earlier
in this report and in note 1(c), has
a total programme budget of £5.3
million, and through 31 December 2020
approximately 50% of the budget has
been utilised. Of this, expenditure of
£1.5 million has been capitalised as
intangible assets and £1.2 million has
been recognised as an expense in
the year it was incurred (either 2019
or 2020).
Financial position
The objective of the Foundation’s
reserve policy is to hold an appropriate
level of accessible funds while ensuring
it is making timely and strategic use of
its funds. The Foundation holds reserves
to provide cover for unexpected
changes in income and expenditure,
allowing the Foundation to continue
activities in the event of any shortfall in
revenue (particularly from the voluntary
elements of its funding), as well as
unforeseen costs. The Trustees will
continue to monitor and maintain the
reserves within an acceptable range
for a not-for-profit organisation.
2021 outlook
The Foundation appreciates the
continuing support by funding
providers listed on pages 53 to 55.
The Foundation is committed to
ensuring its operating expenditure is
managed prudently and effectively
and it will actively pursue further
initiatives to enhance the organisation’s
operational stability.
The budget for 2021 is based upon an
assumed constant level of contributions,
and it assumes that the Business
Process and Technology Programme will
continue to progress with the remaining
£2.6 million of budget applied.
Operating expenditure is expected to be
consistent with 2020, and assumes most
meetings will continue to be virtual,
albeit a modest provision for some
travel and stakeholder engagement is
included. The 2021 budget proposal was
presented to and approved by
the Trustees in December 2020.
In September 2020 the Trustees
published their Consultation Paper on
Sustainability Reporting. The comment
period closed on 31 December 2020 and
feedback confirmed an urgent need for
global sustainability reporting standards
and broad support for the Foundation
to play a role in their development.
The Trustees are therefore continuing
their work considering whether to
establish an international sustainability
reporting standards board within the
existing governance structure of the
Foundation. Achieving the level of
separate funding required for this work
has been identified as a key requirement
for success.
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
28
Going concern
The Foundation has reviewed its
financial performance and the general
reserves position for 2020.
Covid-19
In March 2020 the coronavirus was
declared a pandemic by the World
Health Organisation. The magnitude
and impact remain uncertain and are
dependent on future developments that
cannot be accurately predicted at the
time of signing the financial statements.
The Foundation's planning process,
including financial and cash flow
projections, has taken
into consideration the current and
forecasted economic climate and its
potential impact on the Foundation’s
various sources of income and
planned expenditure.
In 2020 the Audit, Finance and Risk
Committee:
• reviewed the Foundation’s annual
budget, accounts, three-year plan
and related forecasts;
• reviewed the Foundation’s fundraising
and financing efforts;
• advised the Trustees on whether the
financial statements are fair, balanced
and reasonable;
• advised the Trustees on the
reappointment of the Foundation’s
external auditors, as well as their
effectiveness;
Audit, Finance and Risk Committee’s report
Brexit
As an international organisation
working in the public interest with
broad support, the Foundation does
not expect a high level of disruption to
its operations as a result of the United
Kingdom’s departure from the European
Union on 31 December 2020. The
Foundation will continue to monitor
the position in 2021.
Having regard to all relevant
circumstances and the substantial
reserve funds held by the Foundation,
the Trustees consider it appropriate
to prepare the financial statements
on a going concern basis.
• ensured an appropriate framework for
reporting and accountability; and
• reviewed the Foundation’s risk reports
and monitored the integrity,
adequacy and effectiveness of
the Foundation’s system of risk
management and internal controls.
The Committee met five times during
2020. Other members of senior
management and representatives of the
external auditors of the IFRS Foundation
attend the meetings by invitation.
The Chair of the Committee also met
with the external auditors on several
occasions during the year.
Trustee approval
These financial statements cover the
year ended 31 December 2020 . They
have been prepared in compliance with
the IFRS Standards that were effective
or applied early on 1 January 2020.
The financial statements were approved
and authorised for issue by the Trustees
At that date, aside from the disclosure in
note 11, there had been no events since
31 December 2020 that required an
adjustment to the financial statements.
Erkki Liikanen
Chair of the IFRS Foundation Trustees
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IFRS Foundation Annual Report 2020
29
Independent auditor’s report
to the Trustees of the IFRS Foundation
relevant to our audit of the Foundation’s
financial statements in the UK, including
the Financial Reporting Council’s (FRC)
Ethical Standard, and we have fulfilled
our other ethical responsibilities in
accordance with these requirements
.
We
believe that the audit evidence we have
obtained is sufficient and appropriate to
provide a basis for our opinion
.
Conclusions relating to
going concern
We are responsible for concluding on
the appropriateness of the Trustees’ use
of the going concern basis of accounting
and, based on the audit evidence
obtained, whether a material uncertainty
exists related to events or conditions
that may cast significant doubt on the
Foundation’s ability to continue as a
going concern
.
If we conclude that a
material uncertainty exists, we are
required to draw attention in our report
to the related disclosures in the financial
statements or, if such disclosures are
inadequate, to modify the auditor’s
opinion
.
Our conclusions are based on
the audit evidence obtained up to the
date of our report
.
However, future
events or conditions may cause the
Foundation to cease to continue as a
going concern
.
In our evaluation of the Trustees’
conclusions, we considered the inherent
risks associated with the Foundation’s
business model including effects arising
from macro-economic uncertainties such
as covid-19, we assessed and challenged
the reasonableness of estimates
made by the Trustees and the related
disclosures and analysed how those risks
might affect the Foundation’s financial
resources or ability to continue operations
over the going concern period
.
Based on the work we have performed,
we have not identified any material
uncertainties relating to events
or conditions that, individually or
collectively, may cast significant doubt
on the Foundation’s ability to continue
as a going concern for a period of at least
twelve months from when the financial
statements are authorised for issue
.
In auditing the financial statements, we
have concluded that the Trustees’ use
of the going concern basis of accounting
in the preparation of the financial
statements is appropriate
.
The responsibilities of the Trustees with
respect to going concern are described in
the ‘Responsibilities of Trustees for the
financial statements’ section of this report
.
Opinion
Our opinion on the financial
statements is unmodified
We have audited the financial
statements of the IFRS Foundation
(‘Foundation’) for the year ended 31
December 2020, which comprise the
statement of comprehensive income,
statement of changes in retained
surplus, statement of financial position,
statement of cash flows and notes to
the financial statements, including
a summary of significant accounting
policies
.
The financial reporting
framework that has been applied in
their preparation is applicable law
and International Financial Reporting
Standards (IFRS Standards) as issued by
the International Accounting Standards
Board (IASB)
.
• In our opinion the Foundation’s
statements give a true and fair
view of the financial position of the
Foundation as at 31 December 2020
and of its financial performance and
its cash flows for the year then ended
in accordance with IFRS Standards as
issued by the IASB.
Basis for opinion
We conducted our audit in accordance
with International Standards on
Auditing (UK) (ISAs (UK)) and applicable
law
.
Our responsibilities under those
standards are further described in the
‘Auditor’s responsibilities for the audit
of the financial statements’ section
of our report
.
We are independent of
the Foundation in accordance with
the ethical requirements that are
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
30
Overview of our audit approach
Overall materiality
:
£0
.
6m, which represents 2% of the Foundation’s income
.
Key audit matters were identified as
:
• Unpaid Contributions (New)
Our auditor’s report for the year ended 31 December 2019 included two key
audit matters that have not been reported as key audit matters in our current
year’s report
.
These related to the valuation of forward currency contracts, as the
Foundation has not entered into any new forward currency contracts in the year
and unpaid revenue from publications and related activities, as less judgment
surrounded these revenue streams
.
Our approach to the audit
Key audit matters
Key audit matters are those matters
that, in our professional judgement,
were of most significance in our audit
of the financial statements of the
current period and include the most
significant assessed risks of material
misstatement (whether or not due
to fraud) that we identified
.
These
matters included those that had the
greatest effect on
:
the overall audit
strategy; the allocation of resources in
the audit; and directing the efforts of
the engagement team
.
These matters
were addressed in the context of our
audit of the financial statements as
a whole, and in forming our opinion
thereon, and we do not provide a
separate opinion on these matters
.
In the graph to the right, we have
presented the key audit matters,
significant risks and other risks
relevant to the audit
.
Description
Disclosures
Audit reponse
Our results
KAM
Key audit matter
Significant risk
Other risk
Low
Low
Bonds/ Forward
Currency contracts at
Fair Value
Paid contributions and publications, subscriptions
and royalty revenue
Going concern
Deferred Tax Asset
Management override
Subscriptions income-manual adjustments
Unpaid contributions
Board
members and
staff cost
Related party transactions
Deferred income
High
High
Potential
financial
statement
impact
Extent of management judgement
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
31
Key audit matter How the matter was addressed in the audit
Unpaid Contributions
A significant proportion of income
relates to voluntary contributions
.
They are recognised as income on a
receipts basis, exceptions being those
received post year-end which have
been designated by the contributor as
relating to the previous year
.
We therefore identified the occurrence
of unpaid contributions as a significant
risk, which was one of the most
significant assessed risks of material
misstatement due to fraud or error
.
In responding to the key audit matter, we performed the following audit procedures
:
• Walkthrough procedures were performed at the planning stage to update our
understanding of the Foundation’s processes and controls over the recording of
contributions transactions.
• For unpaid contributions, the largest contribution relates to the EU Grant. We have
performed substantive testing on the related expenses to ensure the claims are in
line with allowable expenses.
• We tested whether contributions were recognised in the correct period by checking
invoices to verify that the contributions related to the correct period, before
agreeing funds received to post year end bank statements to confirm the receipt
of cash.
• We inspected correspondence with the donor to determine if they had provided a
firm commitment to the Foundation to pay the funds due and that the contribution
related to the correct financial year.
• Performed an analytical review of contributions income year on year by contributor
and jurisdiction to identify any unusual movements in balances. We note that
certain international accounting firms reduced their contributions to the Foundation
in the year, however they have also increased the amounts paid to the Foundation
in the form of royalties; and
• We also reviewed post year end bank statements to determine if any amounts
received related to contributions for FY20 that had not been recognised and
traced these to the contributions schedule to ensure that they had been correctly
accounted for.
Relevant disclosures in the
financial statements 2020
• The Foundation's accounting policy
on revenue is shown in note 6
(Contributions) to the financial
statements and related disclosures
are included within these notes
.
Our results
Our work did not identify any material misstatements concerning unpaid revenue
from contributions
.
We are satisfied that the accounting policies are appropriate,
consistently applied from previous years and in line with the IFRS
.
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
32
Materiality measure Foundation
Materiality for financial statements
as a whole
We define materiality as the magnitude of misstatement in the financial statements
that, individually or in the aggregate, could reasonably be expected to influence the
economic decisions of the users of these financial statements
.
We use materiality in
determining the nature, timing and extent of our audit work
.
Materiality threshold
Significant judgements made by auditor
in determining the materiality
£0
.
6m which is 2% of income
.
In determining materiality, we made the following significant judgement, that income
is considered the most appropriate benchmark because the Foundation is not a
profit-oriented entity
Materiality for the current year is lower than the level that we determined for the
year ended 31 December 2019 to reflect the reduction in income
.
Performance materiality used to
drive the extent of our testing
We set performance materiality at an amount less than materiality for the financial
statements as a whole to reduce to an appropriately low level the probability that the
aggregate of uncorrected and undetected misstatements exceeds materiality for the
financial statements as a whole
.
Performance materiality threshold
Significant judgements made by auditor
in determining the performance
materiality
£0
.
45m which is 75% of financial statement materiality
.
In determining materiality, we made the following significant judgements, that the
overall control environment at the foundation was good through identifying limited
adjustments or control findings in previous audits
.
Communication of misstatements
to the audit, finance and risk
committee
We determine a threshold for reporting unadjusted differences to the audit
committee
.
Threshold for communication £30k and misstatements below that threshold that, in our view, warrant reporting on
qualitative grounds
.
Our application of materiality
We apply the concept of materiality both in planning and performing the audit, and in evaluating the effect of identified
misstatements on the audit and of uncorrected misstatements, if any, on the financial statements and in forming the opinion in the
auditor’s report
.
Materiality was determined as follows
:
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
33
FSM: Financial statements materiality
PM: Performance materiality
TFPUM: Tolerance for potential uncorrected misstatements
An overview of the scope
of our audit
We performed a risk-based audit
that requires an understanding of the
Foundation’s business and in particular
matters related to
:
• performing an evaluation of the design
effectiveness of controls over key
financial statement risks as identified
as part of our risk assessment process;
• gaining an understanding of the
financial reporting and accounts
production process; and
• undertaking substantive testing on
significant classes of transactions,
account balances and disclosures,
the extent of which was informed by
an overall assessment of the control
environment.
Other information
The Trustees are responsible for
the other information
.
The other
information comprises the information
included in the annual report, other
than the financial statements and our
auditor’s report thereon
.
Our opinion on
the financial statements does not cover
the other information and, except to the
extent otherwise explicitly stated in our
report, we do not express any form of
assurance conclusion thereon
.
In connection with our audit of the
Foundation’s financial statements,
our responsibility is to read the other
information and, in doing so, consider
whether the other information is
materially inconsistent with the
Foundation’s financial statements or
our knowledge obtained in the audit
or otherwise appears to be materially
misstated
.
If we identify such material
inconsistencies or apparent material
misstatements, we are required to
determine whether there is a material
misstatement of the Foundation’s
financial statements or a material
misstatement of the other information
.
If, based on the work we have
performed, we conclude that there is
a material misstatement of this other
information, we are required to report
that fact
.
We have nothing to report in this regard
.
Responsibilities of Trustees
for the financial statements
As explained more fully in the Audit,
Finance and Risk Committee Report,
the Trustees are responsible for the
preparation of the financial statements
and for being satisfied that they give a
true and fair view, and for such internal
control as the Trustees determine is
necessary to enable the preparation of
financial statements that are free from
material misstatement, whether due to
fraud or error
.
In preparing the financial statements, the
Trustees are responsible for assessing the
Foundation’s ability to continue as a going
concern, disclosing, as applicable, matters
related to going concern and using the
going concern basis of accounting unless
the Trusteess either intend to liquidate the
Foundation or to cease operations, or have
no realistic alternative but to do so
.
Income
£30.1m
FSM
£0.6m,2%
PM
£0.45m, 75%
TFPUM
£0.15m, 25%
Overall materiality
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
34
Auditor’s responsibilities
for the audit of the financial
statements
Our objectives are to obtain reasonable
assurance about whether the financial
statements as a whole are free from
material misstatement, whether due to
fraud or error, and to issue an auditor’s
report that includes our opinion
.
Reasonable assurance is a high level
of assurance, but is not a guarantee
that an audit conducted in accordance
with ISAs (UK) will always detect a
material misstatement when it exists
.
Misstatements can arise from fraud
or error and are considered material
if, individually or in the aggregate,
they could reasonably be expected to
influence the economic decisions of users
taken on the basis of these Foundation
financial statements
.
A further description of our
responsibilities for the audit of the
financial statements is located on the
Financial Reporting Council’s website at
:
www
.
frc
.
org
.
uk
/
auditorsresponsibilities
.
This description forms part of our
auditor’s report
.
Explanation as to what extent
the audit was considered
capable of detecting
irregularities, including fraud
Irregularities, including fraud, are
instances of non-compliance with laws
and regulations
.
We design procedures
in line with our responsibilities, outlined
above, to detect material misstatements
in respect of irregularities, including
fraud
.
Owing to the inherent limitations
of an audit, there is an unavoidable
risk that material misstatements in
the financial statements may not be
detected, even though the audit is
properly planned and performed in
accordance with the ISAs (UK)
.
The extent to which our procedures
are capable of detecting irregularities,
including fraud is detailed below
:
• The Foundation is subject to many
laws and regulations where the
consequences of non-compliance could
have a material effect on amounts or
disclosures in the financial statements.
We identified the following laws and
regulations as the most likely to have a
material effect if non-compliance were
to occur; financial reporting legislation,
tax legislation, anti-bribery legislation
and employment law.
• We identified areas of laws and
regulations that could reasonably be
expected to have a material effect
on the financial statements from our
general sector experience and through
discussion with the Trustees, and from
inspection of the Foundation's Board
minutes and legal and regulatory
correspondence. We discussed the
policies and procedures regarding
compliance with laws and regulations
with the Trustees.
• Based on the results of our risk
assessment we designed further audit
procedures to identify non-compliance
with such laws and regulations
identified above. Our procedures also
involved journal entry testing, with a
focus on journals meeting our defined
risk criteria based on our understanding
of the business; enquiries of legal
counsel, management; consideration
of the volume and nature of complaints
received through whistleblowing
during the year.
• Assessment of the appropriateness
of the collective competence and
capabilities of the engagement
team included consideration of the
engagement team's:
− understanding of, and practical
experience with audit engagements
of a similar nature and complexity
through appropriate training and
participation;
− knowledge of the industry in which
the client operates;
− understanding of the legal and
regulatory requirements specific to
the entity/regulated entity including:
− the provisions of the applicable
legislation;
− the regulators rules and related
guidance, including guidance
issued by relevant authorities
that interprets those rules;
− the applicable statutory
provisions; and
• We did not identify any matters
relating to non-compliance with laws
and regulation or relating to fraud.
Use of our report
This report is made solely to the
Foundation’s Trustees as a body
.
Our
audit work has been undertaken so
that we might state to the Foundation’s
Trustees those matters we are required
to state to them in an auditor’s report
and for no other purpose
.
To the fullest
extent permitted by law, we do not
accept or assume responsibility to
anyone other than the Foundation and
the Foundation’s Trustees as a body, for
our audit work, for this report, or for the
opinions we have formed
.
for and on behalf of
Grant Thornton UK LLP
Statutory Auditor,
Chartered Accountants
London
30 March 2021
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
35
Statement of comprehensive income
Year ended 31 December 2020
Year ended 31 December 2020
Statement of changes in retained surplus
Note
2020
£’000
2019
£’000
Income
Contributions 6 18,093 19,994
Revenue from publications and related activities 7 11,713 10,540
Other income 6 315 405
Operating expenses
Technical and operational activities
• Board members and staff costs 1 (19,669 ) (19,466 )
• Other technical and operating costs 1 (2,394 ) (2,762 )
• IFRS Advisory Council, IFRS Interpretations Committee
and other advisory bodies 1 (77 ) (277 )
Publications and related activities expenses 7 (2,370 ) (2,522 )
Trustee oversight 2 (771 ) (1,055 )
Premises, occupancy and related expenses 3 (2,072 ) (1,888 )
(27,353 ) (27,970 )
Net operating income 2,768 2,969
Finance income 10 667 1,762
Finance costs 10 (528 ) (984 )
Income before tax 2,907 3,747
Income tax credit 5 569 –
Comprehensive income for the year 3,476 3,747
Retained surplus at beginning of year 38,064 34,428
Cumulative effect of applying IFRS 16 – (111 )
Retained surplus at beginning of year restated 38,064 34,317
Comprehensive income for the year 3,476 3,747
Retained surplus at end of year
The notes on pages 38 to 52 form part of these financial statements.
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
36
Statement of financial position
As at 31 December 2020
Note
2020
£’000
2019
£’000
Assets
Current assets
Cash and cash equivalents 15,299 10,022
Contributions receivable 6 3,367 2,528
Trade and other receivables 7 929 977
Prepaid expenses 1,075 717
Inventories 7 45 113
Bonds at fair value, including accrued interest 9 5,819 4,227
Forward currency contracts at fair value 8 293 213
Non-current assets
Bonds at fair value, including accrued interest 9 16,038 20,688
Forward currency contracts at fair value 8 2 180
Leasehold improvements, furniture and equipment 3 2,395 2,883
Right-of-use assets 4 4,844 5,582
Intangible assets 1 1,454 689
Deferred tax asset 5 569 –
Total assets
Liabilities
Current liabilities
Trade and other payables 586 150
Payroll taxes payable 627 643
Accrued expenses 1,385 1,289
Contributions received in advance 6 753 140
Lease liability 4 927 898
Forward currency contracts at fair value 8 67 309
Publications revenue received in advance 7 1,164 1,313
Non-current liabilities
Lease liability 4 4,620 5,544
Reinstatement provision 3 460 457
Forward currency contracts at fair value 8 – 12
Total liabilities 10,589 10,755
Net assets / retained surplus 41,540 38,064
The notes on pages 38 to 52 form part of these financial statements.
Erkki Liikanen
Chair of the IFRS Foundation Trustees
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IFRS Foundation Annual Report 2020
37
Statement of cash flows
Year ended 31 December 2020
The notes on pages 38 to 52 form part of these financial statements.
Note
2020
£’000
2019
£’000
Operating activities
Cash received
Contributions 17,815 20,011
Publications and related activities 11,649 10,605
Funding for Asia-Oceania office 6 358 334
Interest 535 533
Other receipts 14 34
Cash paid
Salaries, wages and benefits (19,608 ) (18,653 )
Publications and related activities expenses (2,169 ) (3,369 )
Trustees’ fees (662 ) (675 )
Foreign exchange settlements (210 ) (683 )
Other operating expenses (3,174 ) (4,284 )
Net cash from / (used in) operating activities 4,548 3,853
Investing activities
Matured bonds receipts 3,959 2,341
New bond purchases (981 ) (4,951 )
Purchase of leasehold improvements, furniture
and equipment (32 ) (68 )
Purchase of intangible assets (1,064 ) (689 )
Net cash from / (used in) investing activities 1,882 (3,367 )
Financing activities
Payments of principal on lease liabilities (895 ) (789 )
Payments of interest on lease liabilities (175 ) (202 )
Net cash (used in) / from financing activities (1,070 ) (991 )
Effects of exchange rate changes on cash
and cash equivalents (83 ) (61 )
Net increase / (decrease) in cash and cash equivalents 5,277 (566 )
Cash and cash equivalents at the beginning
of the year 10,022 10,588
Cash and cash equivalents at the end of the year 15,299 10,022
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
38
Significant accounting
policies
Basis of preparation
The IFRS Foundation is a not-for-
Corporation Law of the State of
Delaware, USA and operates in England
and Wales as an overseas company
principal office at Columbus Building,
7 Westferry Circus, Canary Wharf,
London, E14 4HD.
The Foundation was incorporated
on 6 February 2001. The objectives
and governance arrangements of
the Foundation and its independent
standard-setting body, the International
Accounting Standards Board, are set
out in the Foundation's Constitution.
The financial statements are presented
in sterling, which is the organisation’s
functional currency.
The financial statements were approved
and authorised for issue by the Trustees
of the Foundation on 30 March 2021.
As disclosed in note 11, there have been
no events since 31 December 2020 that
required an adjustment to the accounts.
The Trustees are responsible for
overseeing the Foundation’s financial
reporting process and for assessing the
Foundation’s ability to continue as a
going concern, disclosing, as applicable,
matters related to going concern. The
ability of the Foundation to continue to
operate as a going concern is dependent
on the ability of the Foundation to
generate sufficient cash flows from
its contributions and publications
and related activities to meet its
liabilities. The Foundation produces
annual budgets and forecasts which
Notes to the financial statements
For the year ended 31 December 2020
take into account the Foundation’s
activities, operations and known
cash requirements. The Foundation’s
planning process, including financial and
cash flow projections, has taken into
consideration the potential impact of
covid-19 and Brexit (see Introduction to
the financial statements). Having regard
to all relevant circumstances and the
funds held by the Foundation, the
Trustees consider it appropriate to
prepare the financial statements on
a going concern basis.
The Foundation’s most important
intangible asset is the intellectual
property embodied in IFRS Standards.
The Foundation does not recognise
this asset because the cost of the
asset cannot be measured reliably.
Expenditure related to the development
of IFRS Standards is recognised as
an expense in the year in which it is
incurred. Other intangible assets include
software development expenditure and
the purchase of computer software
licences (see note 1(c)).
All other accounting policies that
are relevant to an understanding
of the financial statements are
provided throughout the notes to
the financial statements.
When preparing the financial
statements, management makes
judgements, estimates and assumptions
about the recognition and measurement
of assets, liabilities, income and
expenses. The key judgements made by
management are as follows:
• Capitalisation of intangible assets—
determining whether the recognition
requirements for the capitalisation of
internally developed software meet
the criteria of IAS 38 and SIC 32. After
capitalisation, management monitors
whether the recognition requirements
continue to be met and whether there
are any indicators that capitalised
costs may be impaired. If any such
indication exists, the recoverable
amount of the asset is estimated to
determine the amount of impairment
loss (see note 1(c)).
• Recognition of deferred tax assets—
the assessment of the extent to which
deferred tax assets can be recognised
is based on an assessment of the
amount of future taxable income that
will be available against which the tax
loss carry forwards can be utilised.
There are no other significant
judgements or estimates that require
separate disclosures.
Current period and
future changes to the
accounting policies
The financial statements have been
prepared in accordance with IFRS
Standards. There have been no changes
in significant accounting policies since
the 2019 financial statements.
The Foundation has concluded that
there are no IFRS Standards or IFRIC
Interpretations in issue that are not yet
applied that will have a material effect
on the financial statements.
Explanatory information
The explanatory notes have been
organised into sections that provide
a cohesive presentation of the
financial reporting implications of
the Foundation’s core activity—the
development of IFRS Standards—how it
funds that activity and how it manages
its financial risk. Each section presents
the financial information and any
significant accounting policies that are
relevant to understanding the activities
of the Foundation.
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
39
Activities
1 Technical and operational activities
a) Board members and staff costs
The main costs associated with developing IFRS Standards are the salaries of the Board members and staff. The average number
of employees in 2020, including Board members and remunerated secondees, was 152 (2019: 149 ). Total headcount increased
from 150 to 156 during the year.
2020
£’000
2019
£’000
Board member salaries and related costs 7,399 7,483
Staff salaries and related costs 13,438 12,877
Board members and staff costs are analysed as follows:
Technical and operational activities 19,669 19,466
Publications and related activities (see note 7) 895 894
Business Process and Technology Programme (see note 1(b) below) 273 –
The Trustees’ Human Capital Committee reviews, benchmarks and recommends salary and benefit levels, which are reviewed
and approved annually by the Trustees as a whole. The Foundation pays monthly contributions, at rates between 8 % and 10 % of
gross salary, into a defined contribution group personal pension scheme on behalf of staff.
Board members’ remuneration is based on an annual allowance which covers gross salary, compensation, pension contributions,
benefits and employer taxes. In 2020 the annual allowances were as follows: £686,000 for the Chair (2019: £669,000 ); £592,500 for
the Vice-Chair (2019: £578,000 ), and £542,000 for other Board members (2019: £528,500 ). The Board had a full complement of 14
members until 30 June 2020; thereafter it had 13 members (2019: 14). In addition to the Trustees, Board Chair and Vice-Chair, the
key management personnel include the Executive Director and the Executive Technical Director. Total remuneration which includes
gross salary, pension contributions and benefits for each of the Executive Directors in the year was £345,000 (2019: £320,000 ).
b) Other technical and operating costs
2020
£’000
2019
£’000
Audit, legal and taxation advice 117 144
Communication and technology 556 497
Business Process and Technology Programme (see note 1(c) below) 822 326
External relations 22 61
Human resource and recruitment activities 303 481
Technical research library 148 132
Meeting video conferencing 140 140
Travel and meetings 78 695
Other office-related costs 167 286
Covid-19-related expenditure to support remote working 41 –
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c) Business Process and Technology Programme
The Business Process and Technology Programme includes expenditure for the development of new IT infrastructure and the
purchase of computer software licences. Expenditure on research activities and project management costs are recognised as
an expense in the period in which it is incurred. Expenditure that is directly attributable to the development of new software is
recognised as intangible assets provided that the development costs can be measured reliably, adequate technical, financial and
other resources to complete the development are available, and the software development will generate probable future economic
benefits. Development costs not meeting these criteria for capitalisation are expensed as incurred.
Intangible assets are stated at cost less accumulated amortisation and accumulated impairment losses. Development expenditure
is not amortised until such time as the asset is available for use. Otherwise, amortisation is charged on a straight-line basis , over the
of evolution of the asset and what plans, if any, are being made for its replacement. Intangible assets are reviewed annually for
impairment.
2020
£’000
CRM
system
2020
£’000
Modern
web platform
2020
£’000
Finance
system
2020
£’000
Other
2020
£’000
Total
Cost
1 January – 658 – 31 689
Additions 259 589 82 134 1,064
Disposals – (292 ) – – (292 )
31 December 259 955 82 165 1,461
Accumulated amortisation
1 January – – – – –
Charge for the year – 292 – 7 299
Disposals – (292 ) – – (292 )
31 December – – – 7 7
Carrying amount 259 955 82 158 1,454
2019
£’000
CRM
system
2019
£’000
Modern
web platform
2019
£’000
Finance
system
2019
£’000
Other
2019
£’000
Total
Cost
1 January – – – – –
Additions – 658 – 31 689
Disposals – – – – –
31 December – 658 – 31 689
Accumulated amortisation – – – – –
Carrying amount – 658 – 31 689
In line with the Foundation’s policy there was no amortisation charge in 2019 as none of the intangible assets were available for use.
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d) The IFRS Advisory Council, IFRS Interpretations Committee and other advisory bodies
The annual remuneration for the Chair of the IFRS Advisory Council was £40,000 in 2020. Additionally, the Foundation
reimbursed the Chair’s travel and accommodation costs. Other members of the IFRS Advisory Council are not paid remuneration
and meet their own costs for attending meetings. Members of the IFRS Interpretations Committee and members of the Capital
Markets Advisory Committee are not remunerated, but they are reimbursed for their travel and accommodation costs for
attending meetings. Members of the Board’s other advisory bodies meet their own costs for attending meetings and are not
remunerated by the Foundation. As a result of covid-19-related travel restrictions, most meetings were held virtually. This is
reflected in the reduced meeting and travel costs.
The remuneration, travel and meeting costs for these committees and advisory bodies were as follows:
2020
£’000
2019
£’000
IFRS Advisory Council remuneration costs 37 40
IFRS Advisory Council travel and meeting costs 8 70
IFRS Interpretations Committee travel and meeting costs 29 154
Capital Markets Advisory Committee travel and meeting costs 3 13
2 Trustee oversight
The Foundation’s management and governance is overseen by 22 Trustees. The Trustees met seven times during the year.
The Chair of the Trustees receives £200,000 per year and other Trustees receive an annual fee of £20,000 . There are six active
Trustee committees; committee chairs receive an additional £7,000 per year. All Trustees are reimbursed for their travel relating
to Foundation business. As a result of covid-19-related travel restrictions, six of the Trustee meetings were held virtually. This is
reflected in the reduced travel and meeting costs for the year.
Costs associated with Trustee activities are as follows:
2020
£’000
2019
£’000
Remuneration costs 662 659
Travel and meeting costs 109 396
3 Premises, occupancy and related expenses
The components of premises, occupancy and related expenses are as follows:
2020
£’000
2019
£’000
Rates, insurance and energy 662 618
Service charges 349 338
Depreciation (see notes 3 and 4) 1,258 1,287
Other costs 132 126
Less amounts allocated to publications and related activities
expenses (see note 7) (329 ) (481 )
The estimated costs of reinstating the premises when the leases expire of £460,000 (2019: £457,000 ) are recognised as lease
reinstatement obligations. All equivalent obligations that are included in leasehold improvements are recognised evenly over the
remaining lease terms.
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Leasehold improvements and furniture and equipment fixed assets
Leasehold improvements and furniture and equipment fixed assets are initially measured at cost , and then depreciated or
amortised on a straight-line basis from the date on which the asset is available for use. Leasehold improvements are depreciated
depreciated over three or five years .
2020
£’000
Leasehold
improvements
2020
£’000
Furniture and
equipment
2020
£’000
Subtotal
Cost
1 January 2,924 1,239 4,163
Additions – 32 32
Disposals – – –
31 December 2,924 1,271 4,195
Accumulated
depreciation/amortisation
1 January 552 728 1,280
Charge for the year 309 211 520
Disposals – – –
31 December 861 939 1,800
Carrying amount 2,063 332 2,395
2019
£’000
Leasehold
improvements
2019
£’000
Furniture and
equipment
2019
£’000
Subtotal
Cost
1 January 2,868 1,235 4,103
Additions 56 4 60
Disposals – – –
31 December 2,924 1,239 4,163
Accumulated
depreciation/amortisation
1 January 251 480 731
Charge for the year 301 248 549
Disposals – – –
31 December 552 728 1,280
Carrying amount 2,372 511 2,883
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4 Leases
The Foundation has recognised right-of-use assets and lease liabilities for its two office premises leases in London and Tokyo.
The London premises lease commenced in January 2018 for 10 years. The lease includes a five-year break clause and incentives
in the form of rent-free periods both initially and in year six. The Foundation has determined that it is reasonably certain not to
terminate the lease at the end of year five and thus, the lease has a term of 10 years for financial reporting purposes.
The Tokyo premises lease commenced in October 2012 for 10 years until September 2022.
Right-of-use assets are recognised at cost, comprising the amount of the initial measurement of the lease liability less
accumulated depreciation. There were no additions during the year:
2020
£’000
2019
£’000
Right-of-use assets 1 January 5,582 6,320
Depreciation charge for the year (738 ) (738 )
Carrying amount of right-of-use assets 31 December 4,844 5,582
Lease liabilities are recognised at the present value of lease payments not yet paid discounted using the Foundation’s
incremental borrowing rate of 3 %. Interest expense is included in finance costs (see note 10).
Future undiscounted lease commitments under the premises leases are as follows:
2020
£’000
2019
£’000
Within one year 1,075 1,073
In two to five years 3,063 3,132
More than five years 2,005 3,008
Effect of discounting (596 ) (771 )
Lease liability at 31 December 5,547 6,442
Current 927 898
Non-current 4,620 5,544
Total cash outflows related to leases during the year was £1,070,000 (2019: £991,000 ); the change in the lease liability of
£895,000 (2019: £789,000 ) represents cash outflows from the repayment of principal (see Statement of Cash Flows).
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5 Taxation
The Foundation is an exempt organisation under Section 501(c) (03) of the Internal Revenue Code, which is generally exempt
from US income taxes under Section 501(a) and for purposes of US taxation is a resident of the United States of America.
a) Current tax charge
In 2006 the Foundation reached an agreement with the UK authorities regarding the status of taxation on its publications and
related revenues, and the taxation charge is calculated on this basis. The Foundation has utilised its carry forward tax losses and
the current tax charge for the period is £nil (2019: £nil ).
The tax charge comprises:
2020
£’000
2019
£’000
Current tax (credit) / charge – –
Deferred tax (credit) / charge (569 ) –
Total tax (credit) / charge (569 ) –
The reason for the difference between the actual tax charge for the year and the standard rate of corporation tax applied to
profits for the year are as follows:
2020
£’000
2019
£’000
Profit before tax 2,907 3,747
Applicable tax rate 19 % 19 %
Tax at the applicable tax rate 552 712
Effects of:
- income not subject to tax (70 ) (540 )
- expenses not deductible for tax purposes 2 –
- utilisation of tax losses (458 ) (172 )
- previously unrecognised deferred tax asset from losses in prior years (665 ) –
- previously unrecognised deferred tax liability from fixed asset timing
differences in prior years 70 –
Tax (credit) / charge (569 ) –
Income not subject to tax mainly represents voluntary contributions.
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b) Deferred tax asset
At the end of 2020, the Foundation is carrying forward trade and non-trade losses for UK tax purposes of £3,658,000 (2019:
£6,073,000 ). Unrelieved tax losses and other deferred tax assets are recognised only when it is probable that they will be
recovered against future taxable profits. The IFRS Foundation did not recognise its carry forward losses in 2019 because of the
uncertainty of being able to utilise these losses to offset future taxable income.
Taxable income received in 2020 and expected in future years from new contractual licensing arrangements has resulted in the
Foundation determining that it is now probable that taxable profits will be available against which trade and certain non-trade
carry forward tax losses can be utilised. During 2020 the Foundation utilised £2,415,000 of previously unrecognised tax losses,
and recognised a deferred tax asset based on the remaining £3,498,288 of previously unrecognised tax losses. Deferred tax has
not been recognised on pre-April 2017 non-trade losses carried forward of £159,712 (2019: £182,340 ). This is because of the
uncertainty of being able to utilise these losses to offset future taxable income.
The IFRS Foundation has recognised a deferred tax asset of £569,000 related to remaining carry forward losses net of fixed asset
timing differences in 2020 (see below). Changes to UK corporation tax rates were announced on 3 March 2021, which confirmed
an increase in the tax rate from 19% to 23% with effect from 1 April 2023. The announcement does not constitute substantive
enactment and therefore deferred taxes at the balance sheet date continue to be measured at the enacted tax rate of 19 %.
2020
£’000
2019
£’000
Deferred tax asset b/f – –
Deferred tax credit for the year 569 –
Deferred tax asset c/f 569 –
The deferred tax asset comprises:
Losses
£’000
Fixed asset
timing differences
£’000
Total
£’000
Deferred tax asset b/f – – –
Deferred tax (charge) / credit for the year 665 (96 ) 569
Deferred tax asset c/f 665 (96 ) 569
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6 Contributions
Contributions to the Foundation are voluntary, mainly publicly sponsored and are recognised as income in the year designated
by the funding providers. Contributions that have been received but are designated for use after the reporting date are deferred
and recognised as liabilities. As at year end £753,000 (2019: £140,000 ) of contributions received are deferred. Contributions
received after the reporting date but designated for use in the reporting period are recognised as income and as contributions
receivable. As at year end £3.4 million (2019: £2.5 million) is included within contributions receivable.
The Foundation receives annual contributions from the European Union and the Australian Financial Reporting Council (AFRC)
that are supported by enforceable grants, subject to various conditions that the Foundation is expected to meet. The European
Union grant of £4.4 million (2019: £4.3 million) is payable by instalments, and contributions receivable includes the final grant
instalment expected for 2020 of £2.2 million (2019: £1.8 million). The AFRC grant of £561,300 was received in full in 2020
(2019: £547,000 ).
All contributions received are for general use by the Foundation except for funding of the Asia-Oceania office.
The Foundation received separate funding in 2020 from the Accounting Standards Board of Japan of £358,000 / ¥50,000,000
(2019: £334,000 / ¥50,000,000 ) towards the operations of the Asia-Oceania office located in Tokyo. £315,000 (2019: £372,000 )
has been recognised in other income.
The Foundation receives contributions in a range of currencies, as follows:
2020
£’000
2019
£’000
UK pounds 2,504 2,389
US dollars 4,884 6,957
Euro 6,884 6,798
Other 3,821 3,850
For more information on how the Foundation manages its currency risk refer to note 8.
A full list of funding providers can be found on page 53.
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7 Publications and related activities
The following table presents the components of the net income generated by the IFRS Foundation’s publications
and related activities:
2020
£’000
2019
£’000
Revenues from contracts with customers
Publications 1,328 1,476
Subscription services 1,549 1,638
Licensing 8,752 7,221
Conferences and speaking engagements 84 205
Expenses
Staff salaries and related costs 895 894
Cost of goods sold 544 476
Depreciation 163 247
Occupancy 166 234
Communication technology 204 259
Other costs 398 412
Net revenue from publications and related activities 9,343 8,018
An internal review of the staff salaries and related costs which have historically been allocated to publications and related
activities was undertaken in 2020. The Foundation concluded that it was more appropriate for some of these costs to now be
classified within technical and operational activities. As a result, the analysis of Board members and staff costs shown in note
1(a) is after a reclassification of £978,000
related costs for the publication and related activities changed from £1.8 million to £894,000 , and staff salaries and related costs
for technical and operation activities changed from £18.5 million to £19.5 million.
Revenues are generated from the sale of printed publications, subscription services, various licensing contracts and conference
and speaking engagements. The Foundation recognises revenue when it satisfies its performance obligations to customers.
Revenue is measured based on the consideration specified in the contracts.
• Revenue from printed publications is recognised when control of the publication is transferred to the customer, which occurs
upon shipment. Publications are paid for in advance of shipment.
• Revenue from subscription services is recognised over the subscription period on a time-apportioned basis because the
services provide ongoing access to updated versions of IFRS Standards and other related content. Subscriptions are generally
paid for in advance.
• The Foundation enters into non-exclusive licensing contracts granting third parties rights to use IFRS Standards and related
content to provide various products and services. Consideration for these contracts is in the form of fixed fees payable in
advance or arrears, or variable fees that are based on customers’ sales and payable quarterly in arrears. Around 80% of
contracts are for fixed fee contracts. Revenues for fixed fee contracts are recognised on a time-apportioned basis over the term
of the licence because the contracts provide ongoing access to updated versions of IFRS Standards and other related content.
Revenues for variable fee contracts are recognised as the customers’ sales occur.
• Revenues from conferences and speaking engagements are recognised when the conference or other event occurs.
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Customers are entitled to refunds or returns in accordance with statutory requirements, but such occurrences based
on experience are expected to be infrequent and insignificant.
Trade and other receivables include £201,500 (2019: £810,000 ) from licensing contracts. Publications revenue
received in advance relates to subscription services and licensing contracts; the amount of £1,313,000
the beginning of the year has been recognised as revenue during the year, and the amount of £1,164,000
remaining performance obligations at the end of the year that have an original duration of one year or less, as
permitted by IFRS 15 Revenue from Contracts with Customers.
Inventories consist of the Foundation’s publications, which are carried at the lower of the cost of printing, on a
first-in, first-out basis or their net realisable value.
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8 Risk management
The Trustees have overall responsibility for the establishment and oversight of the Foundation’s risk management framework.
The Foundation’s risk management policies are established to identify and analyse the risks faced by the Foundation, to set
appropriate risk limits and controls, and to monitor risks and adherence to limits. The Foundation has a conservative approach to
financial risk, and the principal purpose of its treasury management policy is to maintain liquidity, mitigate and manage foreign
exchange risk and to safeguard the Foundation’s reserves. The Audit, Finance and Risk Committee oversees how management
monitors compliance with financial risk management policies and procedures and reviews the adequacy of the risk management
framework in relation to those risks. Risk management policies and systems are reviewed regularly.
Liquidity risk
Liquidity risk is the risk that the Foundation will not be able to meet its financial obligations as they fall due. The Foundation’s
approach to managing liquidity is to ensure that it will always have sufficient liquidity to meet its liabilities when due, under
both normal and stressed conditions, without incurring unacceptable losses or risking damage to the Foundation’s reputation.
The Foundation has no borrowings.
The Foundation holds reserves to provide cover for unexpected changes in income and expenditure, allowing the Foundation
to continue activities in the event of any shortfall in revenue (particularly from the voluntary elements of its funding), as well as
unforeseen costs.
Cash is held either as current or as short-term deposits at floating rates of interest. Part of the cash at bank is held in euro, yen
and US dollar accounts to meet expenditure obligations. Surplus funds are invested in sterling-denominated, fixed-rate bonds of
governments, governmental agencies or international organisations, with AAA minimum ratings at the time of purchase.
Credit risk
Credit risk is the risk of financial loss to the Foundation if a counterparty or customer to a financial instrument fails to meet its
contractual obligations. The Foundation has financial assets measured at amortised cost comprising cash and cash equivalents,
contributions receivable and publication-related receivables. The Foundation has assessed the credit risk of its financial assets
measured at amortised cost and has determined that the loss allowance for expected credit losses of those assets is immaterial
to the financial statements. The Foundation has a history of very low credit losses and this is not expected to change in the
foreseeable future.
Cash and cash equivalents are all held in financial institutions with high credit ratings. Counterparty credit ratings are
reviewed regularly.
At 31 December 2020, the Foundation has a contribution receivable of £2,185,000 (2019: £1,849,000 ) from a single contributor,
the European Union. This contribution receivable reflects the final grant instalment for 2020. The European Union has a high
credit rating and stable outlook. The Foundation has determined this receivable to have low credit risk.
Exposure to credit risk arising from publications and related activities is managed by requiring advance payments for some
products and services and with the contractual control of the use of the Foundation’s intellectual property. The Foundation
retains a right to terminate contracts and cancel all rights and licences, although such occurrences are expected to be infrequent
and not significant.
The carrying amount of the Foundation’s financial assets represents the maximum credit exposure.
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Market risk
Market risk is the risk that changes in market prices will affect the Foundation’s income or the value of its holdings of financial
instruments. The Foundation is exposed to risks from movements in interest rates and foreign currency exchange rates that
affect its assets and forecasted transactions.
Interest rate risk
The Foundation manages and receives information from its advisers on its investments in bonds on a fair value basis that
includes value changes attributable to interest rate risk. Bonds can be converted into cash if necessary.
Foreign currency management
Foreign exchange risk arises because the Foundation receives contributions and other inflows in a variety of currencies—mainly
US dollars, euro and yen. The Foundation’s expenditures (for staff costs, office costs and other services) are incurred mainly in
sterling. Because foreign exchange rates fluctuate, the Foundation is exposed to some variability of its future sterling cash flows
available to meet future expenditure needs.
The Foundation has historically adopted a policy of using forward foreign exchange contracts to reduce foreign exchange risk,
and to provide greater certainty of the value of the future cash flows in the currency in which they will ultimately be converted.
During 2020 a review of the foreign currency exposure of the Foundation was undertaken by the Trustees. Based on the
conclusion that the current levels of surplus reserves are sufficient to absorb foreign exchange risk, the decision was taken to
stop purchasing forward foreign exchange contracts. The current book of forward contracts will expire by 2022. The Trustees will
continue to monitor the position of foreign exchange risk to the Foundation and this will be reviewed on at least an annual basis.
Foreign exchange derivatives are recognised at fair value and subsequently measured at fair value through profit or loss.
The following table presents the fair value and notional value of these financial instruments by currency:
2020 2019
Forward foreign
exchange contracts
by currency
Fair
value
’000
Notional
value
’000
Weighted
average
rate
Fair
value
’000
Notional
value
’000
Weighted
average
rate
Financial assets
US dollars (Level 2) £284 $10,800 1.320 £128 $16,150 1.319
Euro (Level 2) £5 €1,950 1.104 £259 €7,050 1.111
Yen (Level 2) £6 ¥141,000 139.906 £6 ¥282,000 140.859
Financial liabilities
US dollars (Level 2) – $6,550 – (£301 ) $6,550 1.412
Euro (Level 2) (£66 ) €1,650 1.159 (£13 ) €1,650 1.159
Yen (Level 2) (£1 ) ¥47,000 141.17 (£7 ) ¥47,000 146.510
The fair value of forward foreign exchange contracts is bank-provided and based on pricing models using observable exchange
rates, described as Level 2 in IFRS 13 Fair Value Measurement. All non-current forward contracts expire by 2022.
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IFRS Foundation Annual Report 2020
51
9 Investments
Bonds are recognised at fair value and subsequently measured at fair value through profit or loss. The values of these bonds are
non-current bonds are presented in the following table.
2020
Fair
value
£’000
2020
Face
value
£’000
2019
Fair
value
£’000
2019
Face
value
£’000
Current, including accrued interest 5,819 5,586 4,227 4,213
Non-current, including accrued interest 16,038 15,753 20,688 20,602
The Foundation measures all other financial instruments at amortised cost. Those financial instruments include financial
assets with a total carrying amount of £19.4 million (2019: £12.8 million) and financial liabilities with a total carrying amount
of £586,000 (2019: £150,000 ). The carrying amount of these financial assets and liabilities is a reasonable approximation of
their fair value. These financial instruments include cash and cash equivalents, contributions receivable, publication-related
receivables and trade and other payables.
10 Finance income and finance costs
2020
£’000
2019
£’000
Finance income
Interest income 230 314
Fair value gains on forward foreign exchange contracts 210 1,309
Fair value gains on bonds 227 139
Finance costs
Interest on lease liabilities (178 ) (202 )
Fair value losses on forward foreign exchange contracts (55 ) (12 )
Exchange losses on forward foreign exchange contracts and cash holdings (295 ) (770 )
(528 ) (984 )
Fair value gains and losses from bonds do not include interest income.
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11 Events after the reporting period
Covid-19
At the time of signing the financial statements the covid-19 pandemic continues. Whilst covid-19 is still creating uncertainties
for the future, no event has occurred since 31 December 2020 that required an adjustment to the financial statements.
Sustainability reporting
The Trustees are required by the Foundation’s Constitution to undertake a strategy review every five years. As part of that
review there has been an accelerated focus on sustainability reporting. As a result in September 2020 the Trustees published
a Consultation Paper on Sustainability Reporting to help assess the demand for global sustainability reporting standards and
to understand if and how the Foundation could be involved. The comment period closed on 31 December 2020 and feedback
confirmed an urgent need for such standards and broad support for the Foundation to play a role in their development. The
Trustees are therefore continuing their work in considering whether to establish an international sustainability reporting
standards board within the existing governance structure of the Foundation.
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Funding providers
Jurisdiction Organisation
Australia
£561,300 Financial Reporting Council (FRC)
Brazil
£132,000
£50,000 + Itaúsa S.A.
£50,000 + Itaú Unibanco S.A.
Less than
£25,000
Petróleo Brasileiro S.A. (Petrobras) B3 S.A.
Canada
£534,812
£500,000 + Chartered Professional Accountants of Canada
Less than
£25,000
Office of the Superintendent of Financial Institutions
Chinese Taipei
£62,000
Less than
£25,000
Accounting Research and Development
Foundation
Taiwan Futures Exchange
Taipei Exchange Taiwan Stock Exchange
Taiwan Depository & Clearing Corporation
EU
£4,284,140 European Commission
France
£895,335 Ministry for the Economy and Finance—Autorité des Normes Comptables
Germany Voluntary levy through the Accounting Standards Committee of Germany (DRSC)
£584,068
£25,000+ Allianz SE Deutsche Telekom AG
BASF AG Fresenius Medical Care AG & Co. KGaA
Bayer AG Merck KGaA
BMW AG Münchener Rückversicherungs-Gesellschaft AG
Continental AG RWE AG
Daimler AG SAP AG
Deutsche Börse AG Siemens AG
Deutsche Post AG Volkswagen AG
Less than
£25,000
Aareal Bank AG K+S AG
Aixtron SE Kion Group AG
Commerzbank AG Knorr-Bremse AG
DekaBank Lanxess AG
Deutsche Beteiligungs AG Metro AG
Deutz AG MTU Aero Engines AG
Drägerwerk AG & Co. KGaA Norma Group SE
Dürr AG Patrizia AG
Fielmann AG SAF-Holland S.A.
Fraport AG Sartorius AG
Hornbach Holding AG & Co. KGaA Schaeffler Technologies AG & Co. KG
Indus Holding AG SGL Carbon SE
Infineon Technologies AG Siemens Healthineers AG
Instone Real Estate Group AG Südzucker AG
IFRS Foundation Annual Report 2020
53
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Jurisdiction Organisation
Hong Kong SAR
£20,213 Hong Kong Monetary Authority
India
£489,500 Ministry of Corporate Affairs
Indonesia
£68,000
£25,000 + Financial Services Authority (OJK)
Indonesia Stock Exchange
International
£19,835 Bank for International Settlements
Israel
£17,000 Israel Securities Authority
Italy
£670,631 Organismo Italiano di Contabilita
Japan
£2,061,134 Financial Accounting Standards Foundation
£358,000 Financial Accounting Standards Foundation—Restricted contribution for the Asia-Oceania office
Kazakhstan
£7,580 National Bank of Kazakhstan
Malaysia
£65,000 Malaysian Accounting Standards Board
Netherlands
£400,549
£250,000 + Ministry of Finance
Less than
£25,000
De Nederlandsche Bank
New Zealand
£77,219 External Reporting Board
Norway
£83,088 Financial Supervisory Authority of Norway
People’s Republic of China Through system created by the Ministry of Finance
£2,143,913
£500,000 + China Ministry of Finance
£100,000 + Chinese Institute of Certified Public
Accountants
Shenzen Stock Exchange
Shanghai Stock Exchange
£50,000 + China Investment Corporation
£25,000 + China Communications Construction
Company Ltd
China Petroleum & Chemical Corporation
China National Offshore Oil Corporation PetroChina Company Limited
China Pacific Insurance (Group) Co., Ltd.
Less than
£25,000
Bank of Communications Co., Ltd. China Unicom Corporation
China Merchants Bank Huaneng Power International, Inc.
China Mobile Communication Co., Ltd. PICC Property and Casualty Company Limited
China Telecom Corporation Limited
Portugal
£18,949 Banco de Portugal
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Jurisdiction Organisation
Republic of Korea Contributions organised through Korea Accounting Standards Board
£502,776
£100,000 + Korea Accounting Standards Board (KASB)
£50,000 + Financial Supervisory Service Samsung Electronics Co Ltd
£25,000 + Samsung C&T Corporation Samsung SDS Co Ltd
Samsung Life Insurance Co Ltd
Less than
£25,000
Hana Financial Group Inc Samsung Card Co Ltd
Kakao Corp Samsung SDI Co Ltd
KB Financial Group Inc Samsung Securities Co Ltd
LG Corp Shinhan Financial Group Co Ltd
NongHyup Financial Group Inc POSCO
Russia
£427,700 Ministry of Finance of the Russian Federation
Saudi Arabia
£150,000 Saudi Organization for Certified Public Accountants (SOCPA)
Singapore
£70,000 Ministry of Finance
South Africa
£7,350 Johannesburg Stock Exchange
Spain
£68,126 Bolsas y Mercados Españoles
Switzerland
£17,050
Less than
£25,000
LLQ Management SA
Thailand
£81,251 Federation of Accounting Professions (TFAC)
United Kingdom Levy system organised by Financial Reporting Council
£828,000
United States of America
£397,051
£50,000 + AICPA Oracle
Bank of America Corporation CFA Institute
£25,000 + Morgan Stanley
Less than
£25,000
PepsiCo
International accounting firms
£2,346,662
(US550,000
each)
Deloitte Touche Tohmatsu Limited KPMG
Ernst & Young PricewaterhouseCoopers
£100,000 + BDO (Brussels Worldwide Services BVBA) (US$300,000)
Grant Thornton (US$300,000)
Mazars (US$200,000)
Cumulative amount raised by a jurisdiction appears below the jurisdiction’s name. Amounts translated into sterling on
date received.
IFRS Foundation Annual Report 2020
55
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
56
IFRS Advisory Council
As at 31 December 2020
Chair
Bill Coen
Represented body Represented by Position
Accounting Standards Committee of
Germany (DRSC)
Andreas Barckow President
ACTEO & MEDEF Olivia Larmaraud Deputy Corporate Accounting Director, PSA Group
AIA Group Garth Jones Group Chief Financial Officer
Banco Bilbao Vizcaya Argentaria María Ángeles
Pelaez Moron
Chief Accounting Officer
Basel Committee on Banking Supervision Carolyn Rogers Secretary General and Chair of the Committee's Policy
Development Group
Bayer Martin Schloemer Vice President, Head of Closing & External Reporting
BDO Ehud (Udi)
Greenberg
Head of Professional Practice, BDO Israel; partner in BDO
Global's International Financial Reporting Advisory Group
and member of BDO's Global IFRS Working Party
BusinessEurope Kristian
Koktvedgaard
Head of VAT, accounting, and auditing with the
Confederation of Danish Industry and a member of the
Danish Accounting Council; Chair of International Ethics
Standards Board for Accountants (IESBA) Consultative
Advisory Group (CAG) and representative for
BusinessEurope in the International Auditing and
Assurance Standards Board CAG
Capital Markets Board of Turkey Sibel Ulusoy Tokgöz Representative of the regulatory and supervisory
authority in charge of the securities markets in Turkey
CFA Institute Giuseppe Ballocchi Partner at Alpha Governance Partners
Corporate Reporting Users’ Forum Greig Paterson Managing Director writing equity research covering the
UK listed Life and General Insurance sectors
Council of Institutional Investors James Andrus Investment Manager, Sustainable Investments, at the
California Public Employees’ Retirement System;
Chair of the International Corporate Governance
Network’s Disclosure and Transparency Committee and
the Co-Chair of the Council of Institutional Investors’
International Committee
Deloitte Trevor Derwin IFRS Advisor at the JSE and the South African Council
for Medical Schemes; member of the JSE’s Financial
Reporting Investigations Panel and member of the Board
of Trustees and the Audit Committee of the Chartered
Accountant’s Medical Aid Fund
Eumedion Martijn Bos Policy Advisor on Reporting and Audit
European Accounting Association Ann Jorissen Professor of Accounting at the University of Antwerp and
at the Antwerp Management School
European Central Bank David Grünberger Head of the Prudential Regulation and Accounting Section
European Federation of Financial Analysts
Societies (EFFAS)
Javier de Frutos Partner at Sailbridge Capital; Chair of the Commission on
Financial Reporting of the European Federation of
Financial Analysts’ Societies (EFFAS)
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
57
Represented body Represented by Position
European Financial Reporting
Advisory Group
Jean Paul Gauzès Board President
European Securities and Markets Authority
(ESMA)
Isabelle
Grauer-Gaynor
Corporate Finance and Reporting Team Leader
External Reporting Board (XRB),
New Zealand
Ken Warren Chief Accounting Advisor for the New Zealand Treasury
EY James Luke Africa Technical Partner
Fédération Internationale des Experts-
Comptables Francophones
Aziz Dièye Representative and founder, Chair and CEO of Cabinet Aziz
Dièye
Financial Executives International Ron Edmonds Co-Controller of DowDuPont; Controller and Vice
President of Controllers and Tax for Dow Chemical
Financial Reporting Standards Council
of South Africa
Garth Coppin Member
Grant Thornton Daniel Civit Partner, Head of the Accounting Practice Group in the
Paris Office of Grant Thornton and a member of the GTIL’s
global IFRS Interpretation Group
Insurance Europe (European Insurance
and Reinsurance Federation)
Anna Vidal Tuneu Vice-Chair of the Financial Reporting Working Group
(FRWG); Director of Group Accounting Policies and
Regulation at CaixaBank Group
International Actuarial Association Andrew
Chamberlain
Chair of the Actuarial Standards Committee
International Association for Accounting
Education and Research (IAAER)
Leslie Hodder Representative and Conrad Prebys Endowed Professor
of Accounting at Indiana University’s Kelley School
of Business
International Association of
Insurance Supervisors (IAIS)
Romain Paserot Deputy Secretary General
International Co-operative Alliance Isabelle Ferrand Chief Financial Officer of the central body of Credit Mutuel
International Corporate Governance
Network
Ian Burger Head of Corporate Governance at Newton Investment
Management
International Federation of Accountants Russell Guthrie Executive Director – External Affairs and
Chief Financial Officer
International Monetary Fund Ellen Gaston Senior Financial Sector Expert in the Financial Supervision
and Regulation Division of the Monetary and Capital
Markets Department
International Organization of Securities
Commissions (IOSCO)
Ton Meershoek Representative and Technical Expert in Financial Reporting
at the Netherlands Authority for the Financial Markets
(AFM)
International Organization of Securities
Commissions (IOSCO)
Areewan
Aimdilokwong
Representative and Specialist in the Accounting
Supervision Department of the Securities and Exchange
Commission of Thailand
Investment Association Emma Millar Representative and Director of EMEA Accounting Policy
at BlackRock
Japanese Institute of Certified Public
Accountants (JICPA)
Aiko Sekine Adviser
KPMG Andrew Marshall Head of the Accounting and Reporting team
IFRS Advisory Council
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
58
Represented body Represented by Position
Lukoil Sergey Epifanov Head of Department for International and Consolidated
Reporting
Malaysian Accounting Standards Board
(MASB)
Bee Leng Tan Executive Director
Ortec Finance Tessa Kuijl Oversees Ortec Finance activities for institutional investors
in the Nordics and insurance companies in the UK
PwC Henry Daubeney Global IFRS leader
S&P Global Ratings Osman Sattar Director and Accounting Specialist
The Institute of Chartered Accountants
of India
M P Vijay Kumar Council member, Chairman of Accounting Standards
Board and Vice-Chairman of Expert Advisory Committee
and Valuation Standards Board
The Securities Analysts Association of Japan
(SAAJ)
George Iguchi Chief Corporate Governance Officer and Senior General
Manager of the Equity Investment Department at Nissay
Asset Management
World Bank Pam O'Connell Director and Chief Accountant
Xiamen University Feng Liu Minjiang Chair of Accounting
Observer organisations:
• European Commission
• Japan Financial Services Agency
• US Securities and Exchange Commission
More information about the Advisory Council can be found at www.ifrs.org/groups/ifrs-advisory-council.
Reports Financials AppendicesGovernanceOverviewAbout us
IFRS Foundation Annual Report 2020
59
IFRS Interpretations Committee
As at 31 December 2020
Name Title Organisation Term ends
Renata Bandeira Controllership and Tax Director, Brazil Azul Airlines 30 June 2023
Lisa Bomba Managing Director Deutsche Bank 30 June 2022
Jens Freiberg Public auditor and Head of Accounting
Advisory and Technical Accounting
Groups, Germany
BDO 30 June 2022
Karsten Ganssauge Senior Partner,
Accounting Consulting Services
PwC Global 30 June 2022
Jongsoo Han Board Member Korea Accounting Standards
Board (KASB)
30 June 2021
Guy Jones Partner, Professional Practice Group,
Canada
EY 30 June 2021
Goro Kumagai Senior Fellow, Markets Strategic
Intelligence Department
Mizuho Financial Group 30 June 2021
Sophie Massol Head of Group Accounting Policies,
France
AXA 30 June 2023
Jon Nelson Vice President and Corporate Controller,
United States of America
Fiat Chrysler Automobiles 30 June 2023
Brian O'Donovan Partner KPMG 1 July 2022
Bertrand Perrin Director, Accounting Standards & Special
Projects at the Group Consolidation &
Financial Reporting Department
Vivendi 30 June 2022
Donné Sephton Head of Advisory Services FirstRand Limited group 30 June 2023
Robert Uhl Partner Deloitte & Touche LLP 30 June 2021
Yang Zheng Vice President New China Life Insurance
Company
30 June 2022
Non-voting Chair
Sue Lloyd, Vice-Chair, International Accounting Standards Board
Observer organisations
• Basel Committee on Banking Supervision
• European Commission
• International Organization of Securities Commissions
Carl Douglas (Corporate Controller, CCR S.A.), Mikael Hagström (Senior Vice President and CFO, Dongfeng Commercial Vehicles),
Bruce Mackenzie (Managing Director, W Consulting International) and Bonnie Van Etten (Group Chief Accounting Officer
Fiat Chrysler Automobiles NV) completed their terms on 30 June 2020.
More information about the IFRS Foundation Interpretations Committee, including member biographies, can be found at
www.ifrs.org/groups/ifrs-interpretations-committee.
The Trustees of the IFRS Foundation thank all staff, volunteers and partners
around the world for contributing to the delivery of the Foundation’s
mission during 2020, especially:
• our funding providers;
• those who have contributed with comments to our consultations;
• event partners, participants and hosts; and
• our customers.
Thank you
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