2021
IFRS
®
FOUNDATION
ANNUAL
REPORT
CONTENTS
3 About us
4 Report from the Chair of the IFRS Foundation Trustees
6 Report from the Chair of the International Accounting Standards Board
8 Report from the Chair of the IFRS Foundation Monitoring Board
30 Introduction to the financial statements
33 Report of the Trustees’ Audit, Finance and
Risk Committee
34 Independent auditor’s report to the
Trustees of the IFRS Foundation Opinion
40 Statement of comprehensive income
40 Statement of changes in retained surplus
41 Statement of financial position
42 Statement of cash flows
43 Notes to the financial statements
58 Funding providers
61 IFRS Advisory Council
63 IFRS Interpretations Committee
10 Our objectives and how we create value
11 Our people
12 International Accounting Standards Board
13 How we work―due process
14 Our stakeholders and how we engage with them
24 Our structure
25 Trustees of the IFRS Foundation
27 Trustee committees
29 Key organisational risks
GOVERNANCE
ABOUT US
FINANCIALS
16 2021 review
22 2022 priorities
APPENDICES
OVERVIEW
2021– 2022
REPORTS
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Reports
Overview
Appendices
OUR MISSION STATEMENT
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.
EFFICIENCY
ACCOUNTABILITY
TRANSPARENCY
ABOUT THIS REPORT
This report covers the financial year ended 31 December 2021 and was authorised for issue in March 2022.
We have sought to keep this report concise, with links to further information on our website. If you have
questions or feedback on the report, please email communications@ifrs.org.
The IFRS Foundation is a not-for-profit organisation
established to develop—in the public interest—high-
quality, understandable, enforceable and globally
accepted accounting and sustainability disclosure
standards for general purpose financial reporting, and
to promote and facilitate their adoption.
The Standards—IFRS® Accounting Standards and
future IFRS® Sustainability Disclosure Standards—are
set by the Foundation’s standard-setting bodies, the
International Accounting Standards Board (IASB) and
the newly formed International Sustainability
Standards Board (ISSB).
The IFRS Foundation Trustees oversee the two
boards; they, in turn, are accountable to a
Monitoring Board of public authorities.
ABOUT US
Governance
Financials
About us
Reports
2021–2022
Overview
Appendices
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Financials
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REPORT FROM THE CHAIR OF THE IFRS FOUNDATION TRUSTEES
ERKKI LIIKANEN
INVESTORS ARE
PROLIFIC USERS
OF FINANCIAL
STATEMENTS BASED
ON IFRS ACCOUNTING
STANDARDS. AND
TODAY SEEK TO
DRAW ON BROADER
INFORMATION
FOR ASSESSING
ENTERPRISE VALUE
THAN THEY DID
WHEN THE IFRS
FOUNDATION
BEGAN ITS WORK
20 YEARS AGO.
people who have been part of our work,
past and present, within and outside our
organisation. It has been a remarkable
achievement.
IASB LEADERSHIP CHANGE
During 2021, we said goodbye to Hans
Hoogervorst after he had completed
his second five-year term as Chair of
the IASB. Hans provided strong and
effective leadership—helping navigate,
among other things, the IASB’s response
to the global financial crisis and the
introduction of major enhancements
to IFRS Accounting Standards, including
new financial instruments and lease
accounting requirements, as well
as enhanced revenue reporting
requirements. We are pleased to
welcome Andreas Barckow as Hans’s
successor. Andreas has already made
impact on the organisation and we
look forward to seeing the IASB further
develop under his leadership.
Twenty years ago, the IFRS Foundation
(then known as the IASC Foundation) set
out on an ambitious journey to create a
global language for financial reporting,
now known as IFRS Accounting
Standards. It was a demand-led initiative
responding to investors’ needs to
compare the financial performance
of companies around the world on a
like-for-like basis. This further gained
momentum following the Asian financial
crisis and other market failures.
Today, IFRS Accounting Standards are
required for use by more than 140
jurisdictions. The Accounting Standards
are the world’s closest thing to a truly
global language for financial reporting.
Moreover, the IFRS Foundation and
the International Accounting Standards
Board (IASB) as its standard-setting
board are held in high regard as an
integral part of the fabric of the global
financial system. On the occasion of our
20th anniversary, I recognise the many
A TRANSFORMATIVE YEAR
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A NEW BOARD
Of course, nothing stays still. Investors
are prolific users of financial statements
based on IFRS Accounting Standards
and today seek to draw on broader
information for assessing enterprise value
than they did when the IFRS Foundation
began its work 20 years ago. This need
for a broad range of information is
particularly true when it comes to
sustainability-related information.
Echoing developments from 20 years ago,
the IFRS Foundation Trustees have once
again responded to significant demand—
including this time, from the G20, 750
respondents to our consultations and
others—by creating the International
Sustainability Standards Board (ISSB)
at the November 2021 COP26 Climate
Conference. The ISSB’s goal is to develop
standards that provide a comprehensive
global baseline of sustainability
disclosures for the financial markets. The
ISSB will sit alongside the IASB within
the governance structure of the IFRS
Foundation, ensuring IFRS Accounting
Standards and IFRS Sustainability
Disclosure Standards are complementary
and compatible.
At the same time, we also announced the
exciting news that the Climate Disclosure
Standards Board (CDSB) and the Value
Reporting Foundation (VRF) will be
joining the ‘IFRS family’ (see page 17),
and published prototype requirements
for climate and general disclosures,
developed by a Technical Readiness
Working Group of leading organisations
with expertise in sustainability and
integrated reporting standard-setting
focused on meeting investors’ needs.
The ISSB will have a global footprint, with
key functions in Frankfurt and Montreal
and further resources in London and
San Francisco. Discussions regarding the
ISSB’s Asian presence are taking place.
The announcement at COP26 received
wide support from around the world and
across all stakeholder groups. I would
like to thank the thousands of people
and organisations who have contributed
to or provided feedback on this work.
I also pay tribute to my fellow Trustees
and staff of the IFRS Foundation that
have worked tirelessly and at pace to
meet a highly ambitious timeline. These
achievements belie the relatively small
size of the IFRS Foundation team. They all
deserve a great deal of credit.
THE YEAR AHEAD
For 2022, our challenge is to move
diligently once again, at pace,
establishing the new board, its
leadership, membership and staff―
while working in close cooperation with
jurisdictions around the world. We were
delighted to welcome Emmanuel Faber
as Chair of the ISSB, and look forward
to seeing the ISSB develop under his
leadership. The important work of the
IASB will of course continue, guided
by the IASB's new work plan for 2022-
2026 informed by its Third Agenda
Consultation.
COVID-19
Finally, let me say a few words about
covid-19. The challenging backdrop
of a global pandemic has presented
many difficulties for all organisations
and their staff. Our first thought must
always be with those directly affected
by the virus. In keeping with our values,
we continued to put our people’s
well-being first—both staff and our
stakeholders. The direction of the
pandemic is uncertain and we will seek
to use lessons learned, such as the use
of technology for global collaboration
and more flexible working practices.
THANK YOU
Two of my fellow Trustees finished
their terms of service at the end of
December, and at the beginning of
2022 we welcomed Jorge Familiar
and Keiko Tashiro. On behalf of the
Trustees, I thank Guillermo Babatz
and Kazuyuki Masu for their valuable
contributions and look forward to
working with our new colleagues. I
also thank our financial contributors;
stakeholders around the world
who have placed their trust in
and contributed to our work; our
colleagues; and the many people
around the world that have played
roles in our success.
THE ROUTE TO FORMING THE INTERNATIONAL SUSTAINABILITY STANDARDS BOARD
Consulted publicly
on demand for
sustainability
information and
possible role for
the Foundation
Announced
strategic priorities
for possible
new board and
created working
groups
MARCH
2021
APRIL
2021
JUNE
2021
NOVEMBER
2021
DECEMBER
2021
Consulted publicly
on proposed
changes to the
Constitution
Called for
nominations for
the ISSB Chair and
Vice-Chair(s)
Announced
formation of the
ISSB, consolidation
with CDSB and VRF
and publication of
prototypes
Announced
appointment of
Emmanuel Faber
as inaugural ISSB
Chair
SEPTEMBER
2020
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REPORT FROM THE CHAIR OF THE INTERNATIONAL ACCOUNTING STANDARDS BOARD
ANDREAS BARCKOW
WE HAVE ASKED A
LOT FROM YOU, OUR
STAKEHOLDERS,
OVER THE PAST 18
MONTHS OR SO
AND ARE GRATEFUL
FOR THE AMOUNT
OF TIME YOU HAVE
SPENT PROVIDING
YOUR VIEWS TO
US—IT IS TRULY
APPRECIATED.
Last year, my predecessor, Hans
Hoogervorst, wrote in his final report
that 2020 had been a challenging
year, both for the IASB and for our
stakeholders. In retrospect, 2021
didn’t turn out to be significantly
different: the pandemic continued
to dominate our lives. I would like to
express my gratitude to everyone in our
organisation for having worked hard and
enabling us to deliver our work in this
challenging environment.
In 2021 the IASB launched several
significant consultations. However, we
have probably reached the peak of that
part of our due process for a while and
a period with fewer public consultations
will follow.
We have asked a lot from you, our
stakeholders, over the past 18 months
or so and are grateful for the amount
of time you have spent providing your
views to us—it is truly appreciated. We
SETTING COURSE FOR THE IASB'S NEXT AGENDA
will now duly consider and reflect on your
feedback as we continue our technical
deliberations.
FIRST IMPRESSIONS
I assumed my new role as IASB Chair in
July. I have known the IASB for a long
time, having observed its meetings in
person over a period of almost 15 years
and having served on several of its
advisory committees. This experience
has certainly helped me get started, even
though it was not until late August that
I was finally able to see and meet my
colleagues in person, due to covid-19
restrictions.
We were fortunate to meet in person
from September, and this has certainly
had a positive impact on the engagement
and enthusiasm of IASB members and
staff alike. We look forward to restarting
in-person meetings. Virtual meetings are
efficient, no doubt; they are cost- and
time-effective, and they do not require
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people flying from A to B. Yet, they
lack what I regard as a very important
ingredient to our work: personal
exchanges, face-to-face, both in the
meeting room and in the hallway.
I am also hoping to be able to finally
make some of my formal introductions
around the globe in 2022 that had to
be postponed in 2021 because of the
pandemic. I would like to meet as many
of our stakeholders around the world as is
feasible and allowable given our existing
work programme.
AGENDA CONSULTATION
THEMES
I’ve already touched on the consultations
we launched in 2021, seeking stakeholder
input on: Business Combinations
under Common Control; Management
Commentary; a new approach towards
disclosure requirements; and the first
phase of the Post-implementation Review
of IFRS 9 Financial Instruments, to name
but a few.
One of our consultations in 2021 was
not devoted to a technical project,
but instead was aimed at helping us
develop our work plan 2022 to 2026.
Our Constitution requires us to launch
an agenda consultation every five years,
consulting on where and how to use our
resources. We asked for views regarding
the overall balance of our activities, the
criteria used to prioritise one topic over
another, and, finally, the potential topical
areas themselves.
We received detailed feedback from
around the globe. Most respondents
agreed with keeping the balance of our
activities approximately at the same
nonetheless incomplete in some areas.
I have already mentioned the area of
intangibles, which are widely recognised
as key value drivers, but are largely
hidden from the financial statements
and the notes.
CONNECTIVITY WITH ISSB
Another area concerns longer-term
risks and opportunities. In November,
our Trustees announced the creation of
a parallel board to the IASB that would
be tasked with setting sustainability
disclosure requirements. I welcome
this development, which focuses on the
strategic side of reporting, including
risks and opportunities that are
connected to the business strategy. It
is therefore a logical extension to the
Foundation's remit.
No doubt the two boards may sometimes
focus on similar issues or one board’s
work is at least tangential to that of the
other, so working closely together is
a must: we want to do our utmost to
make our Standards compatible and
complementary—to facilitate seamless
reporting by companies to provide
investors with a comprehensive, decision-
useful set of information. The need for
connectivity between the two boards has
been a key argument for housing both
boards in the same organisation. And I
am very much looking forward to working
with ISSB Chair, Emmanuel Faber, and his
team to take corporate reporting to the
next level.
BIOGRAPHY
Andreas Barckow became Chair of the IASB on 1 July
2021. Before he joined the IFRS Foundation, he served
as President of the Accounting Standards Committee
of Germany (Deutsches Rechnungslegungs Standards
Committee e.V.) from 2015 to 2021.
He is an acknowledged expert in IFRS Accounting
Standards, having previously served as the lead technical
partner for financial reporting matters in the German
member firm of Deloitte. He also served as a member of
the IASB’s Accounting Standards Advisory Forum and was
a representative on the IFRS Advisory Council.
Andreas holds a doctorate in Business Administration from
the University of Paderborn and is an Honorary Professor
at WHU—Otto Beisheim School of Management.
level as today. They also agreed with the
criteria suggested for choosing some
topics and rejecting others. And, perhaps
most surprisingly, there was a huge
degree of consensus on which topics
we should be turning our attention to―
intangibles were high up the list, with
climate-related risks, cryptocurrencies
and the statement of cash flows being
close followers. We expect to present the
outcome of this project and our five-
yearly work plan around mid-2022, so
stay tuned.
OWN PRIORITIES
Deciding on the new work plan does
not mean that we will start work on
new projects immediately; nor do we
stop our current work merely because
of the arrival of a new Chair. The IASB
has an active agenda with important
projects that I am fully committed to
take over the finish line, including the
Goodwill and Impairment, Primary
Financial Statements and Rate-Regulated
Activities projects. We are in the process
of carefully considering the feedback
from our consultations on these projects
before making firm decisions. Given that
the majority of our current projects will
not be finished by the end of 2022, we
need to be realistic about how many new
projects we can launch and when. And we
need to be mindful of our stakeholders’
capacity to engage in consultations and
implement changes.
However, I am equally committed to
work with my Board to bring about
transparency in some areas of financial
reporting where it is clearly lacking
today. While I acknowledge that our
suite of standards is comprehensive, it is
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REPORT FROM THE CHAIR OF THE IFRS FOUNDATION MONITORING BOARD
JEAN-PAUL SERVAIS
2021 has been a landmark year for the
IFRS Foundation with the establishment
of the International Sustainability
Standards Board (ISSB), whose remit is
to develop standards that encompass
a comprehensive global baseline of
high-quality sustainability disclosures
for the benefit of investors and the
capital markets. As highlighted at COP26
in Glasgow in November 2021, the
establishment of the ISSB is a response
to the increased interest by investors,
regulators and companies advocating for
greater consistency and comparability in
sustainability disclosures globally.
With the ISSB sitting alongside the
IASB under the umbrella of the IFRS
Foundation, the boards will jointly play a
critical role in promoting comprehensive,
high-quality, globally accepted corporate
A COMPREHENSIVE APPROACH FOR CORPORATE
REPORTING IN THE PUBLIC INTEREST
reporting standards. Having both boards
under the oversight of the IFRS Foundation
Trustees will facilitate close coordination
and connectivity between financial
reporting and sustainability disclosures.
EXTENSIVE FEEDBACK
The creation of the ISSB followed an
extensive consultation in 2020 and
2021, spanning strategic, technical and
organisational topics. The breadth and
depth of the feedback from a wide array
of stakeholders demonstrated the desire
for a global baseline of sustainability
disclosure standards and underscored
strong support for the IFRS Foundation
to play a central role in delivering such
standards. The feedback also highlighted
the critical importance of the IFRS
Foundation governance, its public
interest role, and its accountability to
public authorities.
These developments resulted in changes
to the IFRS Foundation Constitution that
will not only extend the IFRS Foundation´s
standard-setting activities to global
sustainability disclosure standards but
will also bring a new impetus to the
IFRS Foundation, with the consolidation
of the Climate Disclosure Standards
Board (CDSB) and the Value Reporting
Foundation (VRF) with the IFRS
Foundation.
In accordance with its mission, the
Monitoring Board engaged extensively
with the Trustees on this journey and
has actively monitored progress that
led to the formation of the ISSB and the
appointment of Emmanuel Faber as the
first ISSB Chair. The Monitoring Board´s
mandate will be extended to encompass
the monitoring of the Trustees’ oversight
of the ISSB and it will continue to monitor
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the effectiveness of the implementation
of the constitutional changes, including
the consolidation with CDSB and VRF,
the multi-location approach and the
appointment of the inaugural ISSB board.
Critically, the Monitoring Board will
ensure that IFRS Sustainability Disclosure
Standards are equally responsive to the
public interest and subject to the same
robust governance, rigorous due process
and oversight as are IFRS Accounting
Standards.
IASB LEADERSHIP CHANGE
In 2021, we had the pleasure of
welcoming Andreas Barckow as IASB
Chair succeeding Hans Hoogervorst.
Andreas joined at a critical juncture as the
IASB was publicly consulting on its future
agenda to set its priorities and work plan
for 2022 to 2026. This work plan has also
been a key focus area for the Monitoring
Board and central to our engagement
with the Trustees. We look forward to the
outcome of this exercise.
achievements made during his terms and
the completion of a suite of major IFRS
Accounting Standards.
STRONG WORKING
RELATIONSHIPS
We look forward to continuing our
excellent working relationship with Erkki
Liikanen, the other Trustees and the IFRS
Foundation’s management and staff as
well as with Andreas, with Emmanuel and
with the IASB and ISSB leadership as they
progress on their agendas to meet our
common objective of achieving globally
accepted, high-quality corporate reporting
standards.
In the light of these important
developments, 2021 has been a year
of unprecedented activity within the
IFRS Foundation ecosystem. I would
like to conclude by expressing my
deepest gratitude to my Monitoring
Board colleagues and our teams for
their ongoing support and material
contributions throughout the year.
Despite the challenges posed by the
pandemic, we acknowledge the extensive
standard-setting by the IASB with the work
conducted on the Business Combinations
Under Common Control, Goodwill and
Impairment, Primary Financial Statements,
the Disclosure Initiative, Management
Commentary, and Review of the IFRS
for SMEs® Standard projects. Consistent
application of high-quality corporate
reporting standards remains essential
for the effective, fair and transparent
operation of capital markets and we
welcome the efforts made by Andreas,
Hans and the IASB to closely engage
with stakeholders globally. Stakeholders’
feedback on several IASB proposals
reiterated the need for close coordination
between the IASB and the ISSB and we
appreciate that the Trustees, together with
the IASB and ISSB leadership, are already
considering these matters.
I would also like to acknowledge our deep
appreciation for Hans's leadership of the
IASB in the last decade with significant
Public authority Member Position
Chair
International Organization of Securities
Commissions (IOSCO)
Jean-Paul Servais Chair of the Belgian Financial Services and Markets Authority and
representative of the IOSCO Board (Vice-Chair)
Members
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 the
Financial Stability, Financial Services and Capital Markets Union
IOSCO Growth and Emerging Markets Committee Yusuf Kaya Board Member of the Capital Markets Board of Turkey
Japan Financial Services Agency Takashi Nagaoka Deputy Commissioner for International Affairs
People’s Republic of China Ministry of Finance Zhu Zhongming Vice Minister
South Korea Financial Services Commission Myung Soon Lee Standing Commissioner
United States Securities and Exchange Commission Gary Gensler Chair
Observers
Basel Committee on Banking Supervision Katherine Tilghman Hill Accounting Experts Group (Chair). Representative of the Basel
Committee on Banking Supervision
IOSCO European Regional Committee Gabriel Bernardino Comissão do Mercado de Valores Mobiliários, Portugal (Chair).
Representative of the IOSCO European Regional Committee
IFRS FOUNDATION MONITORING BOARD
AS AT 31 DECEMBER 2021
More information about the Monitoring Board can be found at https://www.iosco.org/about/?subsection=monitoring_board
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OUR OBJECTIVES AND
HOW WE CREATE VALUE
The IFRS Foundation’s objectives, set out in the Constitution
1
, are:
• to develop—in the public interest—high-quality,
understandable, enforceable and globally accepted
standards for general purpose financial reporting based on
clearly articulated principles through the IASB and the ISSB;
• to promote the use and rigorous application of those
standards;
• to take account of the needs of varied sizes and types of
entities in diverse economic settings; and
• to promote and facilitate adoption of those standards.
• people (staff,
governance, advisory
bodies)
• stakeholders
• infrastructure (IT and
offices)
• financial capital
(donations and self-
generated income)
• intellectual property,
brand
• develop and maintain
IFRS Accounting
Standards and
IFRS Sustainability
Disclosure Standards,
IFRS Taxonomies and
the IFRS for SMEs
Accounting Standard
• support high-quality
and 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
• 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 IMPACT
1
A revised version of the Constitution was published in November 2021 after
public consultation to accommodate the creation of the ISSB.
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Our staff come from all over the
world and drive the implementation
of our strategy, contributing to the
organisation’s mission with their
expertise, skills and experience.
At the end of December 2021, the
Foundation had 160 employees from
35 different countries helping us to
meet our objectives. Our staff retention
rate is high and the age distribution is
balanced.
In 2022, through the consolidation of
CDSB and VRF with the Foundation and
the appointments of ISSB members, the
Foundation will become a considerably
larger organisation, with staff in multiple
locations internationally.
OUR PEOPLE
Governance
Financials
About us
160
STAFF
STAFF BY FUNCTION
8%
IASB members
49% 43%
IASB technical staff Operations
GENDER SPLIT
43%
Male
57%
Female
STAFF BY AGE
5% 23%
21-24
32% 24% 16%
25-34 35-44 45-54 55+
STAFF BY LENGTH OF SERVICE
<1 year 1 year 2-3 years 4-6 years 7+ years
24% 10% 24% 17% 25%
35
NATIONALITIES
Appendices
2021–2022
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INTERNATIONAL ACCOUNTING
STANDARDS BOARD
1
Terms started 1 July 2021
2
Stepped down as IASB Vice-Chair to become ISSB Vice-Chair 1 March 2022
Hans Hoogervorst and Martin Edelmann completed their second terms and Françoise Flores retired on 30 June 2021.
The required composition and geographical balance of the IASB is set out in the Constitution.
More information about the IASB, including member biographies, can be found at www.ifrs.org/groups/international-
accounting-standards-board.
AS AT 31 DECEMBER 2021
Andreas Barckow
1
Chair
From: Germany
Region: At large
First term ends 30 June 2026
Jianqiao Lu
From: China
Region: Asia-Oceania
First term ends 31 August 2022
Bruce Mackenzie
From: South Africa
Region: Africa
First term ends 30 September 2025
Nick Anderson
From: United Kingdom
Region: Europe
First term ends 31 August 2022
Bertrand Perrin
1
From: France
Region: Europe
First term ends 30 June 2026
Tom Scott
From: Canada
Region: Americas
First term ends 31 March 2022
Zach Gast
From: United States
Region: Americas
First term ends 31 July 2025
Rika Suzuki
From: Japan
Region: Asia-Oceania
First term ends 30 June 2024
Ann Tarca
From: Australia
Region: Asia-Oceania
First term ends 30 June 2022
Mary Tokar
From: United States
Region: Americas
Second term ends 30 June 2022
Sue Lloyd
2
Vice-Chair
From: New Zealand
Region: Asia-Oceania
Second term ends 31 December 2023
Tadeu Cendon
From: Brazil
Region: Americas
First term ends 30 June 2024
Overview
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The IFRS Foundation has a highly
regarded, inclusive and transparent due
process for developing IFRS Standards.
The IFRS Foundation’s due process is
outlined in its Constitution and in further
detail in the Due Process Handbook.
The due process enables stakeholders
all over the world to contribute to and
scrutinise the standard-setting, helping
us ensure the best thinking worldwide
informs the development of the
requirements.
HOW WE WORK – DUE PROCESS
Governance
Financials
About us
The due process is essential both for
developing high-quality IFRS Standards
and for ensuring that stakeholders can
be confident that all relevant views have
been considered when the Standards
are developed. The process builds trust,
legitimacy and global acceptance of the
Standards.
Three underlying principles make our
due process robust: transparency, full
and fair consultation, and accountability.
The Trustees, who are responsible for
the governance of the IFRS Foundation,
are also responsible for ensuring that
the IASB, the IFRS Interpretations
Committee and the ISSB follow the
due process. The Trustees carry out
this responsibility via their Due Process
Oversight Committee.
Ongoing
research
and broad
consultation
Determine
which projects
to work on
Issue
Standard
Research
possible
solutions
Develop
proposals
Check
Standard
works as
intended and
maintain it
Support
consistent
application
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2021–2022
Governance
Financials
Appendices
OUR STAKEHOLDERS AND
HOW WE ENGAGE WITH THEM
Effective stakeholder engagement is a prerequisite for
the Foundation achieving its objectives. We therefore
manage a range of key stakeholder relationships to
ensure we receive valuable input and guidance, tailoring
that engagement to our stakeholders’ needs.
CONSULTATIVE GROUPS
FOR THE ISSB
Like the IASB, the ISSB will also draw upon external
expertise through several advisory and consultative
groups. These groups are currently being created
and include:
Sustainability Consultative Committee
Its remit is to provide advice to the ISSB on priority
sustainability matters and related technical protocols.
Members will include the International Monetary
Fund, the Organisation for Economic Co-operation
and Development, the United Nations, the World
Bank and additional expert members drawn from
public, private and non-governmental organisations.
Sustainability Standards Advisory Forum
Its purpose is to provide a mechanism for formal
engagement between the ISSB and jurisdictional
representatives. The Forum will provide technical
advice to the ISSB, specifically advising on the
development of IFRS Sustainability Disclosure
Standards that meet the information needs of the
capital markets and that facilitate interoperability
with jurisdictional requirements to meet wider
stakeholder information needs.
Anticipated advisory groups
The Foundation will also use CDSB and VRF advisory
groups to inform the ISSB’s work as well as to provide
advice on aligning the reporting required by the IASB
and the ISSB.
To help us consult widely on our work, we interact with a
network of advisory committees and bodies, representing
a range of stakeholders, including academics, accounting
and investment professionals, preparers, policy-makers,
regulators and other standard-setters.
CONSULTATIVE GROUPS
FOR THE IASB
The IASB meets publicly with its advisory bodies,
standing consultative groups and transition resource
groups. Papers and meeting webcasts from these
groups are available on our website. The following
are examples of these bodies.
Accounting Standards Advisory Forum (ASAF)
ASAF was established to formalise and streamline our
collective engagement with the global community
of national standard-setters and regional bodies to
ensure a broad range of national and regional input
on major technical issues.
www.ifrs.org/groups/accounting-standards-
advisory-forum
Capital Markets Advisory Committee (CMAC)
CMAC was created to provide the IASB with regular
views from investors, internationally. Investors are
important stakeholders because they use financial
reports prepared using IFRS Accounting Standards.
They provide important information and feedback
for standard-setting.
www.ifrs.org/groups/capital-markets-advisory-
committee
Global Preparers Forum (GPF)
GPF was set up to provide the IASB with regular
views from companies that use IFRS Accounting
Standards in preparing their financial statements.
These preparers provide valuable comments on
our consultations and feedback on the practical
application of the Standards.
www.ifrs.org/groups/global-preparers-forum
IFRS Foundation Annual Report 2021
16
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About us
Reports
Overview
Governance
Financials
Appendices
STAKEHOLDER
ENGAGEMENT
Aim—ensure the organisation
engages with many jurisdictions
and types of stakeholders
Achievements:
• enhanced widespread
stakeholder engagement on
strategic priorities, particularly
on sustainability-related
disclosures
• conducted outreach on a range
of consultation documents
published by the Trustees and
the IASB
• organised a virtual World
Standard-setters Conference
in September with nearly 140
participants from 70 countries
and more than 30 presenters
• organised a virtual IFRS
Foundation Conference in June
with over 270 delegates and
nearly 50 presenters from over
40 countries
2021 REVIEW
GOVERNANCE AND
STRATEGY
Aim—the Trustees oversee the
IASB, the IFRS Interpretations
Committee and the ISSB, including
their due process and outreach,
regularly reviewing the strategic
direction and making senior
appointments
Achievements:
• consulted on and made changes
to the Foundation’s Constitution
to enable the creation of the
ISSB within the Foundation’s
governance structure
• continued the sustainability
disclosure project, resulting
in the announcement about
the creation of the ISSB at
COP26, and an agreement on
consolidation with CDSB and VRF
• maintained regular engagement
with the Monitoring Board
• supported successful handover
from Hans Hoogervorst to
Andreas Barckow as Chair of the
IASB
• appointed Emmanuel Faber
as inaugural Chair of the ISSB,
as well as appointing new
members to the Trustees,
the IASB, the Interpretations
Committee and the Advisory
Council
GROWTH,
DEVELOPMENT AND
WELL-BEING OF OUR
PEOPLE
Aim—ensure the well-being and
development of the Foundation’s
boards and staff
Achievements:
• continued efforts to develop
staff through coaching, training
and other career progression
support
• continued to focus on
supporting staff throughout the
period of remote working due
to covid-19 and the transition to
returning to the office, including
providing training on hybrid
working and giving priority to
their physical and mental well-
being
• supported staff through
significant levels of change,
including change in leadership
of the IASB and the creation of
the ISSB, through regular and
open communication
The Foundation made good progress delivering our strategy and
priorities for 2021. These are some of our achievements for the year:
IFRS Foundation Annual Report 2021
17
2021–2022
About us
Reports
Overview
Governance
Financials
Appendices
On 3 November 2021, the IFRS
Foundation officially announced the
formation of a new International
Sustainability Standards Board (ISSB)
at the COP26 Climate Conference
in Glasgow. The announcement
was the result of six months of
technical and strategic considerations
on the establishment of the new
board within the IFRS Foundation’s
structure. This work followed the
Trustees’ 2019–2020 strategic
review and consultation, in which
the Trustees confirmed an urgent
demand for a single set of global
sustainability disclosure standards.
That consultation also confirmed that
the Foundation is uniquely positioned
to develop these standards.
With support from organisations and
experts who confirmed the urgent
need for the Foundation’s leadership,
the ISSB will develop sustainability
disclosure standards that deliver a
comprehensive global baseline of
high-quality sustainability disclosures
to meet investors’ information needs.
The ISSB will work alongside the IASB
within the Foundation.
Preparatory work for the new
board: The Technical Readiness
Working Group
The Trustees created the Technical
Readiness Working Group (TRWG) in
March 2021 to integrate and build on
the work of sustainability initiatives
and organisations focused on meeting
investors’ information needs, and to
provide technical recommendations
for the ISSB’s consideration. The
TRWG was also a response to the call
from the International Organization
of Securities Commissions (IOSCO)
for the coordination of work to drive
international consistency in companies’
sustainability disclosures that inform
investors’ assessment of enterprise
value and investment decision-making.
TRWG participants included: the IASB,
CDSB, the Financial Stability Board’s
Task Force on Climate-related Financial
Disclosures (TCFD), the VRF and the
World Economic Forum (WEF) and
its Measuring Stakeholder Capitalism
Initiative. IOSCO and the International
Public Sector Accounting Standards
Board (IPSASB) participated as
observers.
The TRWG prepared eight
deliverables for the ISSB’s
consideration, including two
prototype standards, Climate-
related Disclosures and General
Requirements for Disclosure of
Sustainability-related Financial
Information published in November
2021. These prototypes serve as
recommendations to the new board.
CASE STUDY
Towards the creation of the ISSB
'FINANCE MINISTERS AND
CENTRAL BANK GOVERNORS
FROM 40 JURISDICTIONS FROM
6 CONTINENTS JOINED THE
UK IN PUBLICLY WELCOMING
THE ANNOUNCEMENT OF
THE ESTABLISHMENT OF
THE ISSB AND ITS WORK
PROGRAMME TO DEVELOP
A SET OF INTERNATIONALLY
CONSISTENT, HIGH-QUALITY
AND RELIABLE BASELINE
STANDARDS FOR DISCLOSURE
OF SUSTAINABILITY-RELATED
INFORMATION ON ENTERPRISE
VALUE CREATION.'
(UK government, November 2021)
Consolidation of CDSB and the
VRF into the IFRS Foundation
At COP26 the Trustees also
announced a commitment
to consolidate two leading
organisations in sustainability
disclosures into the Foundation—the
Climate Disclosure Standards Board
(CDSB) and the Value Reporting
Foundation (which houses the
Integrated Reporting Framework and
the SASB Standards). The transfer
of CDSB's people and intellectual
property to the IFRS Foundation
happened on 1 February 2022.
The merger with the VRF is due to
complete by end of June 2022.
'IOSCO’S AIM IS TO ENDORSE
THE [ISSB'S CLIMATE
DISCLOSURE] STANDARD
BEFORE THE END OF 2022
IF IT IS SATISFIED THAT THE
STANDARD SETS A PRACTICAL
AND EFFECTIVE GLOBAL
BASELINE FOR CLIMATE
DISCLOSURES TO FINANCIAL
MARKETS ACROSS THE GLOBE.'
(IOSCO Report on Sustainability-related
Issuer Disclosures, June 2021)
IFRS Foundation Annual Report 2021
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2021–2022
About us
Reports
Overview
Governance
Financials
Appendices
PROFILE: CLIMATE
DISCLOSURE STANDARDS
BOARD
CDSB was an international
consortium of business and
environmental non-governmental
organisations committed to
advancing and aligning the global
mainstream corporate reporting
model to equate natural and social
capital with financial capital.
CDSB offered companies a voluntary
framework for reporting information
on their environmental and social
risks and opportunities, with
the same rigour as they report
financial information. The CDSB
Framework formed a base for
the TCFD recommendations and
set out an approach for reporting
environmental and climate change
information in mainstream reports,
such as annual reports or integrated
reports. CDSB’s Framework and
technical guidance on climate, water,
biodiversity and social disclosures,
as well as wider resources, will
remain relevant and applicable for
companies until the ISSB publishes
its corresponding IFRS Sustainability
Disclosure Standards.
PROFILE: VALUE
REPORTING FOUNDATION
The VRF is a global not-for-
profit organisation that offers
comprehensive resources designed to
help businesses and investors develop
a shared understanding of enterprise
value—how it is created, preserved
and eroded.
The VRF includes:
• the Integrated Thinking Principles,
which guide board and management
planning and decision-making;
• the Integrated Reporting
Framework, which provides
principles-based, multi-capital
guidance for comprehensive
corporate reporting; and
• SASB Standards, which are industry-
specific standards that guide
disclosure to investors, providing
comparable information on the
sustainability factors most relevant
to enterprise value.
The VRF is advised, supported and
guided by stakeholders internationally
through its networks and advisory
groups to ensure their work is
responsive to market needs.
CASE STUDY
Future of work
In late 2020, we established
a committee to develop
recommendations to the executive
leadership about working practices,
once the UK government had lifted
covid-19 restrictions. Comprising
people from across the organisation,
the committee shared observations;
surveyed staff; examined external
research and developments at other
'THE FSB WELCOMES THE
CONTINUED PROGRESS THE
IFRS FOUNDATION IS MAKING
ON ITS INITIATIVE TO DEVELOP
A GLOBAL SUSTAINABILITY
REPORTING STANDARD,
BEGINNING WITH CLIMATE.'
(Financial Stability Board, October 2021)
'WE ALSO WELCOME THE
WORK PROGRAMME OF THE
INTERNATIONAL FINANCIAL
REPORTING STANDARDS
FOUNDATION TO DEVELOP A
BASELINE GLOBAL REPORTING
STANDARD UNDER ROBUST
GOVERNANCE AND PUBLIC
OVERSIGHT, BUILDING UPON
THE FSB’S TASK FORCE ON
CLIMATE-RELATED FINANCIAL
DISCLOSURES FRAMEWORK
AND THE WORK OF
SUSTAINABILITY STANDARD-
SETTERS.'
(G20 Leaders’ Communique,
October 2021)
CASE STUDY (continued)
Towards the creation of the ISSB
organisations; and debated proposed
changes to pre-covid working
practices. We are currently running
a hybrid-working trial that combines
in-office and remote working. When
the trial ends, we will further assess
and refine our policies to ensure we
adopt the most effective and balanced
working practices.
IFRS Foundation Annual Report 2021
19
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About us
Reports
Overview
Governance
Financials
Appendices
IFRS ACCOUNTING STANDARDS
Aim—research issues and, if appropriate, develop new
and amend existing financial reporting requirements
Achievements:
• published a Request for Information on the IASB’s
Third Agenda Consultation to gather views on the
IASB’s priorities for 2022 to 2026
• published consultation documents, conducted
outreach and analysed feedback on:
Exposure Draft Regulatory Assets and Regulatory
Liabilities
Exposure Draft Disclosure Requirements in IFRS
Standards—A Pilot Approach
Exposure Draft Management Commentary
Exposure Draft Subsidiaries without Public
Accountability: Disclosures
• advanced other research and standard-setting projects
2021 REVIEW (continued)
EFFICIENT AND EFFECTIVE OPERATIONS
Aim—ensure the Foundation is operationally sound
and effective
Achievements:
• implemented new processes and upgraded
infrastructure to ensure the Foundation is a safe
place of work for staff returning to the office as
covid-19 restrictions allowed
• made progress in all areas of the Business Process
and Technology programme to improve how we
work digitally and engage with stakeholders using
modern systems and processes by implementing
a new customer relationship management system
and an enhanced website platform
• introduced the IFRS Standards Navigator, which
improved how our web users access and use our
issued Standards
• maintained and enhanced internal technology
systems to support hybrid working
The Foundation’s due process
requires the IASB to conduct a post-
implementation review (PIR) of any
new Accounting Standard or major
amendment no sooner than two
to three years after they come into
effect. The objective of such reviews is
to assess whether the Standard works
as intended.
IFRS 9 Financial Instruments was issued
in 2014, combining the classification
and measurement, impairment
and hedge accounting phases of its
project to replace and improve IAS 39
Financial Instruments: Recognition and
Measurement. It became effective for
annual reporting periods beginning on
or after 1 January 2018.
IFRS® Standard
Request for Information
September 2021
Post-implementation Review
IFRS 9 Financial Instruments
Classification and Measurement
Comments to be received by 28 January 2022
IFRS 9 specifies how a company is
required to classify and measure
financial assets and financial
liabilities as well as how to classify
some contracts to buy or sell non-
financial items. The PIR focuses on
these requirements, and one area of
particular interest concerns financial
instruments with sustainability-linked
features. The IASB will review the
remaining requirements in IFRS 9 at a
later stage.
The IASB published a Request for
Information in September 2021,
open for comment until January
2022. Feedback to the consultation
will inform the IASB’s decisions on
possible next steps.
CASE STUDY
Post-implementation Review of IFRS 9 Financial Instruments—
Classification and Measurement
IFRS Foundation Annual Report 2021
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2021–2022
About us
Reports
Overview
Governance
Financials
Appendices
2021 REVIEW (continued)
March 2021
Request for Information
Third Agenda Consultation
Comments to be received by 27 September 2021
International Accounting Standards Board
CASE STUDY:
Third Agenda Consultation
While the IASB is committed to
completing the projects on its current
agenda, it also has to consider its
future work programme. Every five
years the IASB seeks stakeholder
views to help shape its future work
plan—such periodic consultations
are required by the Foundation’s
Constitution.
In March 2021, the IASB published a
Request for Information, asking for
public comment on whether it has
the right balance between standard-
setting, research and other activities in
its work and seeking views on priority
issues for 2022 to 2026.
This consultation closed in September
2021 and initial feedback analysis
showed stakeholders largely think
the strategic direction and balance of
activities are right.
High priority projects suggested by
stakeholders for the next five years
include work on climate-related
risks (including pollutant pricing
mechanisms); cryptocurrencies and
related transactions; going concern;
intangible assets; and the statement
of cash flows. Taking its own capacity
as well as the capacity of stakeholders
into account, during the first half
of 2022 the IASB will consider this
feedback and determine the future
work plan.
CONSISTENT APPLICATION
Aim—help stakeholders obtain a common
understanding of financial reporting requirements
Achievements:
• issued several final narrow-scope amendments
and exposure drafts proposing narrow-scope
amendments, including:
Initial Application of IFRS 17 and IFRS 9—
Comparative Information (Amendment to IFRS 17)
Covid-19-Related Rent Concessions beyond 30 June
2021
Exposure Draft Supplier Finance Arrangements
• responded to submissions to the Interpretations
Committee, including by publishing agenda decisions
• published educational materials to support
companies in applying going concern requirements
DIGITAL FINANCIAL REPORTING
Aim—facilitate the digital consumption of financial
information
Achievements:
• developed IFRS Accounting Taxonomy updates
reflecting requirements in IFRS Accounting Standards
issued during the year and improvements to the
technology underpinning the Taxonomy
• explored digital implications for some IASB
presentation and disclosure proposals
• supported regulators using or adopting the IFRS
Accounting Taxonomy
• deepened engagement with partners in the digital
reporting community to facilitate digital consumption
of financial information on a global basis
• conducted early exploratory work and provided input
on the digital reporting strategy for the ISSB
IFRS Foundation Annual Report 2021
21
2021–2022
About us
Reports
Overview
Governance
Financials
Appendices
2021 REVIEW (continued)
IFRS® Foundation
Exposure Draft
April 2021
Comments to be received by 29 July 2021
Proposed Targeted Amendments to the IFRS
Foundation Constitution to Accommodate an
International Sustainability Standards Board
to Set IFRS Sustainability Standards
In November 2021, the Trustees
published a revised Constitution. The
revisions allowed the Trustees to
create the International Sustainability
Standards Board (see page 17).
In 2020, as part of their five-yearly
review of the strategy of the
Foundation, the Trustees published
a Consultation Paper to assess the
demand for global sustainability-
related disclosure standards and to
consult on how the Foundation should
respond to that demand. In the light
of the feedback to that consultation
paper, the Trustees published an
exposure draft in April 2021 seeking
stakeholder feedback on proposed
amendments to the Constitution.
The revised Constitution provides the
framework for the formation of the
International Sustainability Standards
Board within the governance
structure of the IFRS Foundation.
UNDERSTANDABILITY
AND ACCESSIBILITY
Aim—improve the understandability and accessibility of
our financial reporting requirements
Achievements:
• worked to reduce unnecessary complexity for, and
cost to, preparers in applying our Standards, while
improving the quality of information provided to
investors
• drafted clear Standards with support from dedicated
editorial and translation teams, and external reviewers
• made the Standards and related materials more
accessible, for example, by publishing IFRS Accounting
Standards with annotations and cross-references to
other materials, publishing semi-annual compilations
of agenda decisions and continuing to build content
on the IFRS Standards Navigator, the modernised
platform for digital access to IFRS Accounting
Standards launched in 2021
IFRS FOR SMEs ACCOUNTING STANDARD
Aim—provide financial reporting requirements tailored for
companies that do not have public accountability (SMEs)
Achievements:
• analysed feedback to the Request for Information
Comprehensive Review of the IFRS for SMEs
Accounting Standard published in 2020
• developed possible changes to the IFRS for SMEs
Accounting Standard to reflect new requirements in
IFRS Accounting Standards
SUSTAINABILITY-RELATED TECHNICAL
PREPARATORY ACTIVITIES
• participated in the Technical Readiness Working Group
(TRWG), created to do preparatory work for the ISSB
• contributed to and supported the development of
the two prototypes and other deliverables by the
TRWG (see page 17)
CASE STUDY:
Amendments to the IFRS Foundation Constitution
IFRS Foundation Annual Report 2021
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About us
Reports
Overview
Governance
Financials
Appendices
2022 PRIORITIES
ISSB
• establish operations and decision-making
processes
• publish exposure drafts of proposed climate
disclosure and general disclosure requirements
standards for public consultation
• consult on a proposed taxonomy corresponding
with the proposed climate and general disclosure
requirements standards
• conduct comprehensive analysis of public
feedback, to progress towards issuing the climate
and general disclosure requirements standards
• consult publicly on future priorities for the ISSB
• establish and engage with ISSB advisory groups
and other stakeholders
• work in close cooperation with the IASB to
ensure alignment and compatibility between
IFRS Accounting Standards and IFRS Sustainability
Disclosure Standards
TRUSTEES AND FOUNDATION
• appoint inaugural ISSB and new IASB members
• complete consolidation of CDSB and VRF,
including developing an operating model,
building on the resources and expertise from all
organisations
• implement multi-location model for the ISSB
• focus on the well-being and development of
staff, and support of stakeholders during the
organisational transition
• continue the roll-out of projects in our Business
Process and Technology Programme, including
a new finance system and a new technical
feedback database
• incorporate lessons from virtual stakeholder
engagement practices during the pandemic to
deepen and broaden stakeholder engagement
post-pandemic
• monitor the response to our one-year hybrid-
working trial to ensure the organisation adopts
best working practices
• In the year ahead, the Foundation will consider
its own reporting on sustainability and how it
is measuring, analysing and reporting on its
performance
IASB
• publish a feedback statement and finalise the
IASB’s priorities for 2022 to 2026 in response to
the Third Agenda Consultation
• advance our technical accounting projects,
including Primary Financial Statements and
Goodwill and Impairment
• continue supporting consistent application of
IFRS Accounting Standards
• continue considering ways to increase the
understandability and accessibility of IFRS
Accounting Standards
• continue developing the IFRS Accounting
Taxonomy and supporting regulators that adopt it
• publish an exposure draft proposing
amendments to the IFRS for SMEs Accounting
Standard, informed by feedback to the
comprehensive review
• assess whether our IFRS Accounting Standards
work as intended by completing the Post-
implementation Review of IFRS Standards for
group accounting (IFRS 10, IFRS 11 and IFRS 12)
and the Post-implementation Review of IFRS 9
(classification and measurement requirements),
and beginning the Post-implementation Review
of IFRS 15
• work in close cooperation with the ISSB to
ensure alignment and compatibility between
IFRS Accounting Standards and IFRS Sustainability
Disclosure Standards
Financials
About us
Governance
About us
Reports
Overview
Governance
Financials
Appendices
IFRS Foundation Annual Report 2021
23
IASB Chair Andreas Barckow and ISSB
Chair Emmanuel Faber will work in close
cooperation to ensure alignment and
compatibility between IFRS Accounting
Standards and IFRS Sustainability
Disclosure Standards
2021–2022
About us
Reports
Overview
Governance
Financials
Appendices
IFRS Foundation Annual Report 2021
24
Governance
About us
Reports
Overview
2021–2022
Financials
Appendices
OUR STRUCTURE
IFRS Foundation Monitoring Board
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 9.
Chair: Jean-Paul Servais
IFRS Foundation Trustees
The 22 Trustees from varied national
and 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 IASB, ISSB, IFRS Interpretations
Committee and various advisory bodies,
and for ensuring appropriate financing
arrangements are in place. See page 25.
Chair: Erkki Liikanen
International Accounting Standards
Board (IASB)
The IASB is the independent accounting
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 IASB issues IFRS
Accounting Standards, the IFRS for
SMEs Accounting Standard and the IFRS
Taxonomy. See page 12.
Chair: Andreas Barckow
IFRS Interpretations Committee
The Interpretations Committee
comprises 14 external members and a
non-voting chair that works with the
IASB by responding to questions about
applying IFRS Accounting Standards. The
Interpretations Committee proposes
that the IASB makes narrow-scope
amendments to the Standards, develops
IFRIC® Interpretations of the Standards
and publishes agenda decisions. See
page 63.
Chair: Sue Lloyd
1
International Sustainability Standards
Board (ISSB)
Following its establishment announced
on 3 November 2021, the ISSB is
the independent sustainability
disclosure standard-setting body of
the Foundation. Its members will be
appointed from varied national and
professional backgrounds, including
investment, accounting, sustainability,
reporting companies, academia, and
market or financial regulation. The ISSB
will issue IFRS Sustainability Disclosure
Standards. See page 17.
Chair: Emmanuel Faber
IFRS Advisory Council
The Advisory Council is the formal
strategic advisory body to the Trustees
and the two boards, consisting of
representatives from a wide range of
groups affected by and interested in the
Foundation’s work. See page 61.
Chair: Bill Coen
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.
IFRS ADVISORY
COUNCIL
(provides advice
to Trustees, IASB
and ISSB)
IFRS FOUNDATION MONITORING BOARD
IFRS FOUNDATION TRUSTEES
International Accounting
Standards Board (IASB)
International Sustainability
Standards Board (ISSB)
IFRS Accounting
Standards
IFRS Interpretations Committee
Public accountability
Governance, strategy
and oversight
Independent
standard-setting and
related activity
IFRS Sustainability
Disclosure Standards
1
Bruce Mackenzie was appointed as new IFRIC Chair on 1 March 2022
IFRS Foundation Annual Report 2021
25
Governance
About us
Reports
Overview
2021–2022
Financials
Appendices
TRUSTEES OF THE IFRS FOUNDATION
AS AT 31 DECEMBER 2021
Erkki Liikanen (Europe)
Chair
Former Governor of the Bank of
Finland
Second term ends 31 December
2024
Attendance 2021: 10 out of 10
Guillermo Babatz (Americas)
Managing Partner at Atik Capital, S.C.
Second term ended 31 December 2021
Attendance 2021: 8 out of 10
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 2021: 8 out of 10
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 2021: 6 out of 10
Alexsandro Broedel (Americas)
Group Chief Financial Officer at Itaú
Unibanco
First term ends 31 December 2022
Attendance 2021: 8 out of 10
Suresh P. Kana (Africa)
Former Chair of the Financial Reporting
Standards Council of South Africa
Second term ends 31 December 2024
Attendance 2021: 10 out of 10
Teresa Ko (Asia-Oceania)
Vice-Chair
Chair of Freshfields Bruckhaus
Deringer China
Second term ends 31 December 2023
Attendance 2021: 10 out of 10
Larry Leva (Americas)
Vice-Chair
Former Global Vice Chairman—
Quality, Risk and Regulatory for KPMG
International
Second term ends 31 December 2023
Attendance 2021: 9 out of 10
1
Appointed on 1 July 2021
2
Stepped down at the end of first term
Masamichi Kono (At large)
1
Former Deputy Secretary General of the
Organisation for Economic Cooperation
and Development (OECD)
First term ends 31 December 2023
Attendance 2021: 6 out of 6
Su-Keun Kwak (Asia-Oceania)
Professor of Accounting at Seoul
National University
Second term ends 31 December 2022
Attendance 2021: 10 out of 10
Michel Madelain (at large)
Former Vice-Chairman and President of
Moody’s Investors Service
Second term ends 31 December 2023
Attendance 2021: 10 out of 10
Kazuyuki Masu (Asia-Oceania)
2
Executive Vice President, CFO and a
member of the Board of Mitsubishi
Corporation
First term ended 31 December 2021
Attendance 2021: 10 out of 10
Ross McInnes (Europe)
Chairman of the Board of Safran
Second term ends 31 December 2023
Attendance 2021: 10 out of 10
Joanna Perry (Asia-Oceania)
Non-executive director for a number
of listed, public sector and private
organisations in New Zealand and former
Chair of the IFRS Advisory Council
First term ends 31 December 2022
Attendance 2021: 9 out of 10
Robert Pozen (Americas)
Senior lecturer at MIT Sloan School of
Management
First term ends 31 December 2023
Attendance 2021: 10 out of 10
Vinod Rai (Asia-Oceania)
Former Comptroller and Auditor General
of India
Second term ends 31 December 2023
Attendance 2021: 10 out of 10
Lucrezia Reichlin (Europe)
Professor of Economics at the London
Business School
Second term ends 31 December 2023
Attendance 2021: 8 out of 10
Kenneth Robinson (Americas)
Board member of Paylocity,
Abercrombie & Fitch and Morgan
Stanley US Banks
First term ends 31 December 2023
Attendance 2021: 9 out of 10
IFRS Foundation Annual Report 2021
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About us
Reports
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2021–2022
Financials
Appendices
TRUSTEES OF THE IFRS FOUNDATION
(continued)
Erhard Schipporeit (Europe)
Independent management consultant
and supervisory board member of
various German companies
First term ends 31 December 2023
Attendance 2021: 10 out of 10
Sarah J. Al Suhaimi (at large)
Chair of the Board of Directors of
Tadawul (the Saudi Stock Exchange),
member of the Board of Directors of the
Saudi Cultural Development Fund and
the Board of Directors of Saudia airline.
Second term ends 31 December 2024
Attendance 2021: 7 out of 10
Maria Theofilaktidis (Americas)
Executive Vice-President, Global Finance
at the Bank of Nova Scotia
First term ends 31 December 2022
Attendance 2021: 10 out of 10
Guangyao Zhu (Asia-Oceania)
Former Vice Finance Minister of the
People’s Republic of China
Second term ends 31 December 2022
Attendance 2021: 7 out of 10
NEW TRUSTEES SERVING FROM 1 JANUARY 2022
Jorge Familiar has more than 20 years of experience in leadership roles in the financial sector. He is currently Vice-
President and Treasurer for the World Bank as well as World Bank Group Pension Finance Administrator. Earlier
in his career, he was CEO of Mexico’s Instituto Fonacot, a government-owned financial institution, and Vice-Chair
of Securities and Derivatives Markets Supervision at the Comisión Nacional Bancaria y de Valores, a government
agency in Mexico.
Keiko Tashiro is Deputy President at Daiwa Securities, a position she has held since 2019. She has worked at the
Daiwa group of companies since 1986, including as a member of its Board from 2014. She also serves as the group’s
Head of Overseas Operations and Head of Sustainable Development Goals. She is a member of the Financial System
Council at the Japanese Financial Services Agency and a Trustee at the Japan Association of Corporate Executives,
among other organisations.
32% female
68% male
GENDER
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Financials
Appendices
TRUSTEE COMMITTEES
AS AT 31 DECEMBER 2021
The Trustees meet several times a year and operate through several committees. The following committees met in 2021:
AUDIT, FINANCE AND RISK COMMITTEE
Chair: Larry Leva
Members: Colette Bowe, Alexsandro Broedel, Kazuyuki
Masu, Maria Theofilaktidis, Guangyao Zhu
Meetings in 2021: Nine
(The Chair of the Committee also met with the external
auditors on several occasions during the year.)
Activities and decisions
• reviewed the Foundation’s annual budget, accounts
and related forecasts
• advised the Trustees on whether the financial
statements are fair, balanced and reasonable
• reviewed and approved the external auditor's audit
plan and reviewed their audit findings as part of the
Committee's recommendation to approve the annual
financial statements
• regularly reviewed the Foundation’s risk reports and
monitored the integrity, adequacy and effectiveness of
its risk management and internal controls
• received a report from the auditors on the UK Financial
Reporting Council’s review of their audit quality as
part of the Committee's appointment of the external
auditors
• discussed strategies to increase the resilience of the
medium- to long-term funding base for the Foundation
BUSINESS PROCESS AND TECHNOLOGY
COMMITTEE
Chair: Suresh Kana
Members: Su-Keun Kwak, Vinod Rai, Lucrezia Reichlin,
Ken Robinson, Erhard Schipporeit
Meetings in 2021: Three
Activities and decisions
• received regular updates on the Business Process and
Technology Programme
• assured the programme delivery, progress, risk
management, budget position and benefits realisation
• assured the implementation of a systems
modernisation programme, including the new web,
CRM and finance systems
• discussed the Foundation’s digital experience, content
and commercial strategies, providing guidance and
insight to the programme team
• considered potential technology requirements of the
ISSB
• discussed the Foundation’s digital reporting strategy,
and considered how the IASB’s Agenda Consultation
and the ISSB provided an opportunity to develop a
synergistic strategy for digital reporting
DUE PROCESS OVERSIGHT COMMITTEE
Chair: Teresa Ko
Members: Guillermo Babatz, Alexsandro Broedel, Larry
Leva, Michel Madelain, Ross McInnes, Joanna Perry, Robert
Pozen, Vinod Rai
Meetings in 2021: Three
Activities and decisions
• received regular updates on IASB and the IFRS
Interpretations Committee activities
• considered and approved a request for a shortened
comment period for an exposure draft proposing a
narrow-scope amendment to IFRS 17 Insurance Contracts
• received a presentation on the IASB’s progress in respect
of its Third Agenda Consultation before publication of the
related request for information
• considered the staff’s annual reviews of the IFRS
Foundation’s consultative groups; due process for the
educational materials published by the Foundation to
support the consistent application of IFRS Standards; and
various reporting matters
• considered and approved a request to amend the charter
of the IFRS Taxonomy Consultative Group
• considered the provisions relating to the due process for
the ISSB in the IFRS Foundation Constitution and other
work relating to the due process for the ISSB, including the
work of the Technical Readiness Working Group
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Overview
2021–2022
Financials
Appendices
TRUSTEE COMMITTEES (continued)
ETHICS COMMITTEE
Chair: Else Bos
Members: Larry Leva, Vinod Rai, Maria Theofilaktidis
Meetings in 2021: Eight
Activities and decisions
• discussed and approved Terms of Reference, as a
newly formed committee
• discussed the boundaries of its remit and ongoing
engagement with the Human Capital Committee and
the Audit, Finance and Risk Committee
• discussed its role in providing advice to the Trustees
• agreed its current priorities
• met on an ad-hoc basis to review and provide
confidential advice to the Trustees on ethical
questions, as they arose
HUMAN CAPITAL COMMITTEE
Chair: Colette Bowe
Members: Sarah Al Suhaimi, Guillermo Babatz,
Joanna Perry, Robert Pozen, Ken Robinson
Meetings in 2021: Four
Activities and decisions
• reviewed measures taken to ensure effective
leadership and well-being of staff during the covid-19
pandemic
• discussed and made decisions on annual review of
remuneration
• reviewed work of staff committee on reshaping the
future way of working, providing input on proposals
(see page 18)
• discussed and provided advice on people, culture and
change management implications arising from the
establishment of the ISSB
EXECUTIVE COMMITTEE
Chair: Erkki Liikanen
Members: Else Bos, Colette Bowe, Suresh Kana, Teresa
Ko, Larry Leva, Michel Madelain, Lucrezia Reichlin
(as Chair of the Trustees’ Steering Committee on
Sustainability Reporting)
Meetings in 2021: More than 20
Activities and decisions
The Executive Committee and Trustees’ Steering
Committee on Sustainability Reporting operated
collectively to provide oversight and strategic
direction for the project to establish the International
Sustainability Standards Board.
NOMINATING COMMITTEE
Chair: Michel Madelain
Members: Else Bos, Colette Bowe, Alexsandro Broedel,
Suresh Kana, Teresa Ko, Ken Robinson
Meetings in 2021: 10
Activities and decisions
• recommended the appointment and reappointment
of some Trustees, IASB and IFRS Interpretations
Committee members and the chair of the IFRS
Advisory Council
• recommended the appointment of Emmanuel Faber
as inaugural Chair of the ISSB
• initiated the appointment process for the inaugural
Vice-Chairs of the ISSB and members of the ISSB
• recommended the appointment and reappointment
of some organisations and representatives to the
IFRS Advisory Council
IFRS Foundation Annual Report 2021
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About us
Reports
Overview
2021–2022
Financials
Appendices
KEY ORGANISATIONAL RISKS
The IFRS Foundation’s Executive Risk
Committee has overall responsibility to
identify, evaluate and manage the risks
faced by the Foundation. It reports to
the Trustees’ Audit, Finance and Risk
Committee. The overall responsibility for
monitoring risks lies with the Trustees.
The Executive Risk Committee reviews
the key risks for the Foundation and the
appropriate accompanying mitigation
actions regularly throughout the year.
Over the course of 2021, the covid-19
pandemic continued to have a
pervasive effect on the operations of
the Foundation and its principal risks
described below.
In 2021, the Committee also carefully
managed the risks arising from the
work to explore the possible creation
of the ISSB. Now that the Trustees have
created the ISSB, ISSB-specific risks
will be included among the risks to the
entire organisation.
BRAND
The risk that the Foundation fails to
protect its reputation as a professional
and competent global standard-setter.
POLICY-LEVEL SUPPORT
The risk that reduced support for
international cooperation affects the
Foundation or influences support for
adoption of IFRS Standards in some
jurisdictions.
TALENT
The risk that the Foundation is unable
to attract and retain high-calibre people
at all levels.
PRODUCT
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.
TECHNOLOGICAL
INFRASTRUCTURE
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.
IFRS Foundation Annual Report 2021
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Reports
Overview
2021–2022
Governance
INTRODUCTION TO THE
FINANCIAL STATEMENTS
INCOME 2021
OPERATING EXPENSES 2021
INCOME AND EXPENDITURE HIGHLIGHTS
SUMMARY OF FINANCIAL
RESULTS 2021
The IFRS Foundation is reporting a
loss before tax of £354,000 for 2021
(2020: profit of £2.91 million). Income
decreased by £1.3 million year on year,
while operating expenses increased
by £1.5 million. Fair value losses
contributed to a reduction in income
before taxes of £381,000 .
Total income from all activities at £28.8
million (2020: £30.1 million) was an
overall decrease of 4.4% year on year
and comprised:
• contributions: £17.3 million (2020:
£18.1 million 4.2%);
• publications and related activities:
£11.1 million (2020: £11.7 million
5.3%); and
• other income: £370,000 (2020:
£315,000 17.5%).
Total operating expenses increased from
£27.4 million to £28.8 million year on
year. The overall increase of 5.4% was due
mainly to an increase in staff costs and
costs related to the Business Process and
Technology Programme:
• IASB members and staff costs: £20.2
million (2020: £19.7 million 2.6%).
• other technical and operational
activities: £3.7 million (2020: £2.4
million 53.4%);
• publications and related activities: £2.1
million (2020: £2.4 million 11.9%);
• trustee oversight and advisory bodies:
£702,000 (2020: £848,000 17.1%);
and
• premises and occupancy expenses:
£2.2 million (2020: £2.1 million 5.6%).
Finance income decreased from £667,000
to £527,000 and finance costs increased
from £528,000 to £846,000 year on year,
mainly because of fair value adjustments.
In 2020 the Foundation reviewed
previously unrecognised tax losses and
determined that it was probable that
taxable profits will be available against
which the tax losses can be utilised. As
a consequence, a deferred tax asset
of £569,000 was recognised, of which
£452,000 has been realised in 2021
(Note 5).
After accounting for tax charges, the
Foundation is reporting a comprehensive
£28.8 million
£30.1 million
2021
2020
Income
Operating
expenses
£28.8 million
2021
£27.4 million
2020
loss of £806,000 for 2021 (2020:
comprehensive income £3.5 million).
Net assets decreased from £41.5 million
to £40.7 million in 2021. 89% of reserve
funds are held in cash or highly rated
liquid investments.
Contributions
60%
Revenue from
publications and
related activities
39%
Other income
1%
Publications and
related activities
7%
Trustee oversight and
advisory bodies
2%
Premises and
occupancy
8%
Board members and
staff costs 70%
Other technical and operational
13%
IFRS Foundation Annual Report 2021
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Financials
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Reports
Overview
2021–2022
Governance
INCOME
The Foundation’s income comes from
voluntary contributions, and revenues
from the sale of publications and related
activities.
Voluntary contributions were comparable
with the prior year albeit there was an
overall reduction in amounts received.
This was mainly because a small number
of funding providers who contributed
last year did not contribute in 2021,
and because European grant funding
decreased by 6%.
Revenues from publications and
related activities includes publications
and subscriptions services, licencing
of intellectual property, and revenue
generated from conferences and
speaker events.
Revenues from licensing of intellectual
property decreased year on year, but the
principal reason for this is fluctuations
in foreign currency rates, rather than
reduced fee amounts. Consistent with
the prior year, contractual licensing
arrangements with international
accounting firms contributes 74% of
licensing revenue.
Revenue from the sale of publications
and subscriptions saw a marginal
decrease. This was mainly due to reduced
sales of the combined Digital and Print
subscription product, and is reflective of
the shift in trend to digital-only products.
The switch to virtual conferences from
live conferences for the second year
running continued to affect conference
fee and speaker engagement revenue.
The revenue from virtual conferences
is around 30% lower than that for
conferences held live before the
pandemic.
OPERATING EXPENSES
Staff costs for technical and operational
activities continue to be the most
significant cost for the Foundation and,
at £20.2 million (2020: £19.7 million), are
70% of the Foundation’s cost base. Total
headcount increased from 156 to 160
during the year, which was lower than
expected because several staff vacancies
were not filled. As discussed in Note 1,
the Human Capital Committee reviews,
benchmarks and recommends salary and
benefits levels.
Other technical and operating costs
increased overall by £1.3 million, which is
mostly due to:
• inflation rises for office costs such as for
energy, insurance and rates;
• increased legal, consultancy and
professional fees. These fees were
mainly for human resource and related
activities for immigration and payroll
matters, as well as additional fees
of around £254,000 relating to the
establishment of the new International
Sustainability Standards Board
(ISSB) and proposed consolidation
of two organisations that focus on
sustainability reporting;
• additional expenditure for
communication and technology,
which includes new subscription and
licence fees to support technology
implemented under the Business
Process and Technology programme;
and
• the Business Process and Technology
Programme, as discussed in Note 1(c).
The total budget for the programme
is £5.3 million and at the end of 2021
approximately 72% of the budget
had been spent. To date, around
£2.0 million has been capitalised as
intangible assets and around £2.0
million has been recognised as an
expense in the year it was incurred
(either 2019, 2020 or 2021). The
remaining budget of £1.3 million will be
used for the completion of projects to
June 2022.
Publications and related activities
expenses decreased by £283,000
year on year, which was largely due
to movements in stock provisions and
reduced shipping costs for publications.
INVESTMENTS
The Foundation invests the majority
of its surplus funds in fixed-interest,
highly liquid investments, all of which
are high credit quality. The fair value
of investments decreased from £21.9
million to £21.2 million year on year.
This decrease was mainly because of the
fall in government bond prices due to
rising inflation.
RESERVES POLICY
The objective of the Foundation’s
reserve policy is to hold an appropriate
level of accessible funds while ensuring
the Foundation 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
unforeseen costs or shortfall in income
(particularly from the voluntary elements
of its funding). The reserve fund may
also be used for one-time, nonrecurring
expenses that will build long-term
capacity, such as staff development,
research and development, or investment
in infrastructure. The reserve fund may
also be used for opportunities that
further the mission of the organisation.
Reserves funds are not intended to
replace a permanent loss of funds or
eliminate an ongoing budget gap.
The Trustees will continue to monitor
and maintain the reserves within an
acceptable range for a not-for-profit
organisation.
BREXIT
The United Kingdom left the European
Union on 31 January 2020, with an
implementation period that ended on
31 December 2020. As an international
organisation working in the public
interest with broad support, the
Foundation did not experience a high
level of disruption to its operations in
2021 as a result of the United Kingdom’s
departure from the European Union.
IFRS Foundation Annual Report 2021
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Financials
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About us
Reports
Overview
2021–2022
Governance
Erkki Liikanen
Chair of the IFRS Foundation Trustees
2022 OUTLOOK
The Foundation appreciates the
continued support by funding providers
listed on pages 58 to 60. 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.
In November 2021, the Trustees of the
IFRS Foundation published a revised
Constitution to enable the creation of
the ISSB within the IFRS Foundation’s
governance structure. The key steps in
2022 for establishing the global presence
of the ISSB include:
• concluding the merger of the Climate
Disclosure Standards Board (CDSB) and
the IFRS Foundation (1 February 2022);
• concluding the merger of the Value
Reporting Foundation (VRF) and the
IFRS Foundation (30 June 2022);
• establishing new offices in multiple
locations, including Europe, the
Americas and Asia to support the ISSB
and its engagement with regional
stakeholders; and
• appointing ISSB members and its
technical support teams.
The 2022 budget planning process
has considered the establishment of
the new multi-location ISSB, as well
as the ongoing activities of the IASB
based in London.
One of the criteria set out by the
Trustees when determining whether
to create the ISSB was the capacity
to obtain financial support and to
achieve the level of separate funding
required. The Foundation has secured
seed capital funding for the ISSB and
is developing the longer-term funding
model, which will contain a mix of
public and private contributions, grants
and sponsorships, and self-generated
income. Negotiations for ISSB funding
are ongoing.
The additional costs budgeted for
the ISSB include those for board
members, staff, office operations,
and stakeholder engagement. Costs
in 2022 are expected to increase by
around 5% compared to prior year,
principally due to inflationary factors
and the tightening labour market. To
attract and retain the high-quality staff
needed by the Foundation, one of the
most notable cost increases for the
Foundation will arise from salaries.
In addition, while the Foundation will
seek to use lessons learned during
the pandemic, such as the use of
technology for collaboration, the
budget has assumed an increase in
travel costs for in-person meetings that
will recommence in 2022. The 2022
budget proposal was presented to and
approved by the Trustees.
GOING CONCERN
The Foundation has reviewed its financial
performance and the general reserves
position for 2021. The Foundation has
sustained a loss for the financial year
which is due to an increase in consultancy
fees, including those related to the
establishment of the ISSB, as well as
expenditure for the Business Process and
Technology Programme.
The Foundation’s planning process,
including financial and cash flow
projections for the 18 months after
the reporting period, 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, which include those
associated with the establishment of the
ISSB and its multi-location model.
The impact of covid-19 has been an
evolving situation since early 2020.
Management has considered the
consequences of covid-19 and other
events and conditions, and it has
determined that they do not create a
material uncertainty that casts significant
doubt upon the organisation’s ability to
continue as a going concern.
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.
TRUSTEE APPROVAL
These financial statements cover the year
ended 31 December 2021 . They have
been prepared in compliance with the IFRS
Accounting Standards that were effective
on 1 January 2021 or were applied early.
The financial statements were approved
and authorised for issue by the Trustees
of the Foundation on 31 March 2022 .
At that date, aside from the disclosure
in Note 11, there had been no events
since 31 December 2021 that required an
adjustment to the financial statements.
INTRODUCTION TO THE
FINANCIAL STATEMENTS (continued)
IFRS Foundation Annual Report 2021
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Reports
Overview
2021–2022
Governance
REPORT OF THE TRUSTEES’ AUDIT,
FINANCE AND RISK COMMITTEE
AS AT 31 DECEMBER 2021
• advised the Trustees on the
appointment of the Foundation’s
external auditors, and received a report
from the auditors on the UK Financial
Reporting Council’s review of their audit
quality;
• 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 nine times during
2021. 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. All of the
meetings in 2021 were held virtually
and included a number of special
meetings to consider implications to
the Foundation of the then proposed
establishment of the ISSB.
• advised the Trustees on whether the
financial statements are fair, balanced
and reasonable;
• met separately with the external
auditors without the presence of
Foundation management;
• reviewed the Foundation’s annual
budget, accounts, three-year plan and
related forecasts;
• reviewed the Foundation’s fundraising
and financing efforts, and discussed
strategies to increase the resilience of
the medium- to long-term funding base
for the Foundation;
In 2021, the Audit, Finance and Risk Committee:
IFRS Foundation Annual Report 2021
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Reports
Overview
2021–2022
Governance
INDEPENDENT AUDITOR’S REPORT
TO THE TRUSTEES OF THE IFRS
FOUNDATION OPINION
OUR OPINION ON THE
FINANCIAL STATEMENTS IS
UNMODIFIED
We have audited the financial
statements of IFRS Foundation
(‘Foundation’) for the year ended
31 December 2021, 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
Accounting 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 2021 and of its
financial performance and its cash
flows for the year then ended in
accordance with IFRS Accounting
Standards as issued by the IASB.
section of our report. We are
independent of the Foundation
in accordance with the ethical
requirements that are relevant to our
audit of the Foundation’s financial
statements in the UK, including
the FRC’s 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.
Our evaluation of the Trustees'
assessment of the IFRS Foundation's
ability to continue to adopt the going
concern basis of accounting included, but
was not restricted to:
• obtaining and reviewing management’s
assessment of going concern and
challenging the assumptions used in
the cash flow forecasts approved by the
Board;
• confirmation of the cash balance as
at 31 December 2021 to third party
confirmations and assessment of cash
position subsequent to the year-end
to verify the opening position in the
cash flow forecasts and to assess the
accuracy of the forecasting process;
• assessing the accuracy of forecasting
by comparing the accuracy of
management’s forecast of the current
period to current year performance;
• testing the inputs into management’s
forecasts and projections and related
sensitivity analysis for the 15 month
period from date of approval of
financial statements;
• challenging the reasonableness of key
assumptions used in preparing the
cashflow forecasts and projections;
• reviewing and considering
management’s break-even and reverse
stress test scenario analysis, including
sensitivity analysis looking at the impact
of varying drops in income levels;
• consideration of post balance sheet
events and checking if any of these
events have an impact on cashflow
forecasts and projections; and
• reviewing the appropriateness of
policies and disclosures in the financial
statements.
In our evaluation of the Trustees’
conclusions, we considered the inherent
risks associated with the Foundation’s
business model including effects
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
Foundation’s financial statements’
IFRS Foundation Annual Report 2021
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Reports
Overview
2021–2022
Governance
OUR APPROACH TO THE AUDIT
Overview of our audit approach
Overall materiality: £0.6m, which represents 2% of the Foundation’s income.
Key audit matters were identified as:
• Subscriptions income (new)
Our auditor’s report for the year ended 31 December 2020 included one key audit matter
that has not been reported in this year’s report. This related to unpaid contributions, which
is no longer considered to be a key audit matter. The significant risk element relating to
unpaid contributions was immaterial for the year ended December 2021.
KEY AUDIT MATTERS (KAM)
Key audit matters are those matters
that, in our professional judgement,
were of most significance in our
audit of 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.
DESCRIPTION
DISCLOSURES
AUDIT RESPONSE
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
VAT
Management override
Unpaid contributions
Subscriptions income
IASB
members and
staff cost
Related party transactions
Deferred income
High
High
Potential
financial
statement
impact
Extent of management judgement
In the graph below, we have presented the key audit matters,
significant risks and other risks relevant to the audit.
arising from Covid-19, we assessed
and challenged the reasonableness of
estimates made by the Trustees and the
related disclosures and analysed how
these 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.
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Key audit matter How the matter was addressed in the audit
Subscriptions income
The Foundation obtains income from
subscriptions, we established that there was
a greater risk that new joiners could either be
fictitious or have their information including
start date manipulated. We therefore identified
the occurrence of subscription income relating
to new subscribers in the year as a significant
risk, which was one of the most significant
assessed risks of material misstatement due to
fraud or error.
Relevant disclosures in the Annual
Report and Accounts 2021
• The Foundation’s accounting policy on
revenue subscriptions is shown in note 7
(Publications and related activities) to the
financial statements and related disclosures
are included within this note.
In responding to the key audit matter, we performed the following audit
procedures:
• We obtained a download of active subscribers in 2021. We compared this with
the 2020 listing and sorted the data in order to determine new subscribers in
the year;
• We performed substantive testing on a sample of new subscribers to ensure
that the start date of the subscription agreed to supporting documentation;
and
• As part of our substantive testing on new subscribers we agreed the sample to
bank remittance to address the potential for fictitious new subscribers.
Our results
Our work did not identify any material misstatements concerning new
subscribers in the year or management override of subscriptions income. We
are satisfied that the accounting policies are appropriate, consistently applied
from previous years and in line with the IFRS.
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 consistent with the level that we determined
for the year ended 31 December 2020.
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 performance materiality, we factored into our assessment that
there have been limited adjustments and findings in previous audits.
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:
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Income
£28.8m
FSM: Financial statements materiality PM: Performance materiality TFPUM: Tolerance for potential uncorrected misstatements
FSM
£0.6m, 2%
PM
£0.45m, 75%
TFPUM
£0.15m, 25%
OVERALL MATERIALITY
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.
Following further investigation with
management, we have refined our
approach and assessment of where
we believe the risk of fraud in revenue
recognition may occur.
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.
Materiality measure Foundation
Specific materiality
We determine specific materiality for one or more particular classes of
transactions, account balances or disclosures for which misstatements of
lesser amounts than materiality for the financial statements as a whole could
reasonably be expected to influence the economic decisions of users taken on
the basis of the financial statements.
Specific materiality We determined a lower level of specific materiality for the following areas:
• Related party transactions, including Trustees’ remuneration and related
disclosures
Communication of misstatements to
the Audit, Finance and Risk committee
We determine a threshold for reporting unadjusted differences to the Audit,
Finance and Risk committee.
Threshold for communication £30k and misstatements below that threshold that, in our view, warrant
reporting on qualitative grounds.
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RESPONSIBILITIES OF
TRUSTEES FOR THE FINANCIAL
STATEMENTS
As explained more fully in the Trustees’
responsibilities statement, 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 Trustees either
intend to liquidate the Foundation or
to cease operations, or have no realistic
alternative but to do so.
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:
• We enquired of management, the
finance team and the Board of Trustees
about the Foundation’s policies and
procedures relating to the identification,
evaluation and compliance with laws
and regulations and the detection and
response to the risks of fraud and the
establishment of internal controls to
mitigate risks related to fraud or non-
compliance with laws and regulations.
• We obtained an understanding of
the legal and regulatory frameworks
applicable to the Foundation and sector
in which it operates. We determined
that the following laws and regulations
were most significant: financial
reporting legislation; and tax legislation.
• We enquired of management and
the Board of Trustees whether they
were aware of any instances of non-
compliance with laws and regulations
and whether they had any knowledge of
actual, suspected or alleged fraud.
• We understood how the Foundation
is complying with those legal and
regulatory frameworks by making
inquiries to the management, those
responsible for legal and compliance
procedures and the Trustees. We
corroborated our inquiries through our
review of Foundation’s Board minutes
and papers provided to the Audit,
Finance and Risk Committee.
• We assessed the susceptibility of the
Foundation’s financial statements to
material misstatement, including how
fraud might occur. Audit procedures
performed by the Group engagement
team included:
{ Team communications in respect of
potential non-compliance with laws
and regulations and fraud which
included the evaluation of the risk of
management override of controls,
principally in relation to subscriptions
revenue;
{ Enquiring of management, the
finance team and the Board about the
risks of fraud at the Foundation and
the controls implemented to address
those risks. Assessing the design and
implementation of controls relevant
to the audit that management has
in place to prevent and detect fraud,
including updating our understanding
of the internal controls over journal
entries, including those related to
the posting of non-standard entries
used to record non-recurring, unusual
transactions or other non-routine
adjustments;
{ Making specific inquiries of each
member of the finance team to
ascertain whether they had been
subject to undue pressure or had
been asked to make any unusual
postings or modifications to reports
used in financial reporting;
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{ Identifying and testing journal entries
selected based on risk profiling;
{ Running specific keyword searches
(including to related parties and
of those previously connected to
related entities) over the journal entry
population to identify descriptions
that could indicate fraudulent activity
or management override of controls.
In addition, journal entries by user
were evaluated to identify types
of entries posted that were not in
line with expectations of their role.
Unusual entries noted from these
searches were agreed to supporting
documentation to verify the validity
of the posting;
{ Planning specific procedures
responding to the risk of fraudulent
recognition of revenue;
{ Assessing the disclosures within the
annual report including principal risks;
{ Challenging assumptions and
judgements made by management in
its significant accounting estimates;
{ Appropriately testing related party
transactions; and
{ Assessing the extent of compliance
with the relevant laws and regulations
as part of our procedures on the
related financial statement item.
• In assessing the potential risks of
material misstatement, we obtained
an understanding of the Foundation’s
operations, including the nature of
income sources and of its objectives
and strategies in order to understand
the classes of transactions, account
balances, expected financial statement
disclosures and business risks that may
result in risks of material misstatement.
• These audit procedures were designed
to provide reasonable assurance that
the financial statements were free
from fraud or error. However, detecting
irregularities that result from fraud is
inherently more difficult than detecting
those that result from error, as those
irregularities that result from fraud
may involve collusion, deliberate
concealment, forgery or intentional
misrepresentations.
• 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.
USE OF OUR REPORT
This report is made solely to the
Foundation’s Trustees as a body,
in accordance with our letter of
engagement dated 08 January 2021.
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.
Grant Thornton UK LLP
Statutory Auditor, Chartered
Accountants
London
31 March 2022
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STATEMENT OF
COMPREHENSIVE INCOME
STATEMENT OF CHANGES
IN RETAINED SURPLUS
Note
2021
£’000
2020
£’000
Income
Contributions 6 17,325 18,093
Revenue from publications and related activities 7 11,091 11,713
Other income 6 370 315
Operating expenses
Technical and operational activities
• IASB members and staff costs 1 (20,173 ) (19,669 )
• Other technical and operating costs 1 (3,672 ) (2,394 )
• IFRS Advisory Council, IFRS Interpretations Committee
and other advisory bodies 1 (42 ) (77 )
Publications and related activities expenses 7 (2,087 ) (2,370 )
Trustee oversight 2 (660 ) (771 )
Premises, occupancy and related expenses 3 (2,187 ) (2,072 )
(28,821 ) (27,353 )
Net operating (loss) / income (35 ) 2,768
Finance income 10 527 667
Finance costs 10 (846 ) (528 )
(319 ) 139
(Loss) / income before tax (354 ) 2,907
Income tax (charge) / credit 5 (452 ) 569
Comprehensive (loss) / income for the year (806 3,476
YEAR ENDED 31 DECEMBER 2021
YEAR ENDED 31 DECEMBER 2021
Retained surplus at beginning of year 41,540 38,064
Comprehensive (loss) / income for the year (806 ) 3,476
Retained surplus at end of year
The notes on pages 43 to 57 form part of these financial statements.
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STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER 2021
YEAR ENDED 31 DECEMBER 2021
The notes on pages 43 to 57 form part of these financial statements.
Note
2021
£’000
2020
£’000
Assets
Current assets
Cash and cash equivalents 15,275 15,299
Contributions receivable 6 3,517 3,367
Trade and other receivables 7 802 929
Prepaid expenses 1,085 1,075
Inventories 7 167 45
Bonds at fair value, including accrued interest 9 5,932 5,819
Forward currency contracts at fair value 8 34 293
Non-current assets
Bonds at fair value, including accrued interest 9 15,239 16,038
Forward currency contracts at fair value 8 - 2
Leasehold improvements, furniture and equipment 3 2,263 2,395
Right-of-use assets 4 4,105 4,844
Intangible assets 1 1,714 1,454
Deferred tax asset 5 117 569
Total assets
Liabilities
Current liabilities
Trade and other payables 637 586
Payroll taxes payable 681 627
Accrued expenses 1,223 1,385
Contributions received in advance 6 615 753
Lease liability 4 933 927
Forward currency contracts at fair value 8 - 67
Publications revenue received in advance 7 1,193 1,164
Non-current liabilities
Lease liability 4 3,683 4,620
Reinstatement provision 3 551 460
Total liabilities 9,516 10,589
Net assets / retained surplus 40,734 41,540
Erkki Liikanen
Chair of the IFRS Foundation Trustees
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STATEMENT OF CASH FLOWS
Note
2021
£’000
2020
£’000
Operating activities
Cash received
Contributions 17,143 17,815
Publications and related activities 11,090 11,649
Funding for Asia-Oceania office 6 280 358
Interest 507 535
Foreign exchange settlements 269 -
Other receipts 6 14
Cash paid
Salaries, wages and benefits (20,329 ) (19,608 )
Publications and related activities expenses (2,060 ) (2,169 )
Trustees’ fees (654 ) (662 )
Foreign exchange settlements - (210 )
Other operating expenses (4,248 ) (3,174 )
Net cash from operating activities 2,004 4,548
Investing activities
Matured bonds receipts 5,507 3,959
New bond purchases (5,512 ) (981 )
Purchase of leasehold improvements,
furniture and equipment (348 ) (32 )
Capitalisation of intangible assets (528 ) (1,064 )
Net cash (used in) / from investing activities (881 ) 1,882
Financing activities
Payments of principal on lease liabilities (931 ) (895 )
Payments of interest on lease liabilities (142 ) (175 )
Net cash used in financing activities (1,073 ) (1,070 )
Effects of exchange rate changes on cash
and cash equivalents (74 ) (83 )
Net (decrease) / increase in cash and cash equivalents (24 ) 5,277
Cash and cash equivalents at the beginning
of the year 15,299 10,022
Cash and cash equivalents at the end of the year 15,275 15,299
AS AT 31 DECEMBER 2021
The notes on pages 43 to 57 form part of these financial statements.
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NOTES TO THE FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2021
SIGNIFICANT ACCOUNTING
POLICIES
General information and
basis of preparation
The Foundation is a not-for-profit
corporation under the General
Corporation Law of the State of Delaware,
an overseas company (Company number:
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 (IASB), are set out in
the IFRS Foundation’s Constitution. In
November 2021 the Trustees published
a revised Constitution to enable the
creation of the International Sustainability
Standards Board (ISSB) within the
Foundation’s governance structure.
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 31 March 2022. As
disclosed in Note 11, there have been
no events since 31 December 2021 that
required an adjustment to the financial
statements.
GOING CONCERN
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
cashflows from its contributions and
publications and related activities to meet
its liabilities. The Foundation produces
annual budgets and forecasts which take
into account the Foundation’s activities,
operations and known cash requirements.
The Foundation’s planning process,
including financial and cash flow
projections for the 18 months after
the reporting period, has taken into
consideration the potential impact
of establishing the ISSB and the new
multi-location model. Management has
considered the consequences of covid-19
and other events and conditions, and
has determined that they do not create a
material uncertainty that casts significant
doubt upon the organisation’s ability
to continue as a going concern. 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.
CURRENT PERIOD AND FUTURE
CHANGES TO THE ACCOUNTING
POLICIES
The financial statements have been
prepared in accordance with IFRS
Accounting Standards.
In August 2020, the International
Accounting Standards Board issued
Interest Rate Benchmark Reform – Phase
2. The Foundation is not exposed to
hedging relationships or directly affected
by interest rate benchmark reform. No
contractual cashflows of a financial assets
or financial liability measured at amortised
costs changed as a result of interest rate
benchmark reform.
There have been no changes in significant
accounting policies since the 2020
financial statements.
The Foundation has concluded that there
are no IFRS Accounting Standards or IFRIC
Interpretations in issue that are not yet
applied that will have a material effect on
the financial statements.
INTANGIBLE ASSETS
The Foundation’s most important
intangible asset is the intellectual property
embodied in the IFRS Accounting
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 Accounting 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
licenses (see Note 1(c)).
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NOTES TO THE FINANCIAL STATEMENTS
(continued)
AS AT 31 DECEMBER 2021
JUDGEMENTS AND ESTIMATES
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 in applying the accounting
policies of the organisation that have the
most material effect on these financial
statements are:
• the capitalisation of intangible assets
(software development) – to distinguish
the research and development
phases of a new customised software
project and to determine whether
the recognition requirements for the
capitalisation of development costs
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.
There are no other significant judgements
or estimates that require separate
disclosures.
All other accounting policies that are
relevant to an understanding of the
financial statements are provided
throughout the notes to 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
Accounting 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.
1 Technical and operational activities
a) IASB members and staff costs
The main costs associated with developing IFRS Accounting Standards are the salaries of the IASB members and staff. The
average number of employees in 2021, including remunerated secondees, was 154 (2020: 152 ). Total headcount declined from
ISSB staff during 2021.
2021
£’000
2020
£’000
IASB member salaries and related costs 7,363 7,399
Staff salaries and related costs 13,991 13,438
IASB members and staff costs are analysed as follows:
Technical and operational activities 20,173 19,669
Publications and related activities (see Note 7) 855 895
Business Process and Technology Programme (see Note 1(b) and Note 1(c)) 326 273
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.
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a) IASB members and staff costs (continued)
The IASB had 13 members until 30 June 2021; thereafter it had 12 members (2020: 13 members). The full Board composition is 14
members and any gaps are temporary.
IASB members’ remuneration is based on an annual allowance and members can choose how this balance is received in salary,
pension contributions, and other benefits.
IASB members’ gross salaries covering all compensation and benefits for 2021 were:
2021
£’000
2021
£’000
2021
£’000
2020
£’000
Salary, pension
contributions and
other benefits
Employer
taxes
Total annual
allowance
Total
IASB Member
Hans Hoogervorst (Chair) 544 74 618 682
Andreas Barckow (Chair) 485 33 518 -
Sue Lloyd (Vice-Chair) 524 68 592 589
Nick Anderson 477 65 542 538
Tadeu Cendon 477 65 542 538
Zach Gast (term started August 2020) 528 14 542 230
Jianqiao Lu 477 65 542 538
Bruce Mackenzie (term started October 2020) 482 65 547 135
Bertrand Perrin 230 44 274 -
Tom Scott 477 65 542 538
Gary Kabureck (term ended June 2020) - - - 294
Chungwoo Suh (term ended June 2020) - - - 272
Darrel Scott (term ended September 2020) - - - 443
Rika Suzuki 477 65 542 538
Ann Tarca 488 54 542 538
Mary Tokar 477 65 542 538
Françoise Flores (part time, retired June 2021) 137 39 176 296
Martin Edelmann (term ended June 2021) 311 7 318 538
• Hans Hoogervorst’s term as Chair ended in June 2021, but he remained employed by the Foundation until December 2021.
• Andreas Barckow was employed by the Foundation from April 2021, and was appointed Chair in July 2021. In addition to the annual
allowance he received a one-off payment for relocation expenses of £5,000 .
• Bertrand Perrin’s term started in September 2021, and in addition to the annual allowance he received a one-off payment for
relocation expenses of £5,000
• Bruce Mackenzie and Zach Gast started their term in 2020 and in addition to the annual allowance each received a one-off payment
for relocation expenses of £5,000
• Gary Kabureck, Darrel Scott and Chungwoo Suh ended their terms in 2020 and in addition to their allowance received a one off
payment for accrued holiday.
• In addition to the Trustees, IASB Chair and Vice-Chair, the key management personnel include the Executive Director and the
Executive Technical Director. In 2021, each of the Executive Directors received a gross salary of £320,000 and a pension contribution
of £32,000 (2020: Gross salary of £315,000 and a pension contribution of £31,500 ).
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c) Business Process and Technology Programme—Intangible assets
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
expenses in the period which they are 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 recognised as an expense as they are 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 estimated life of the asset which is typically five years or less . The asset lives are reviewed on an annual basis considering the
degree of evolution of the asset and what plans, if any, are being made for its replacement. Intangible assets are reviewed annually
for impairment. During the year both the Customer Relationship Management system (CRM) and Modern Web Platform became
available for use.
b) Other technical and operating costs
2021
£’000
2020
£’000
Fees payable to the external auditor - audit services 44 39
Fees payable to the external auditor - assurance services 9 9
Fees payable to the external auditor/associates - corporate financial services 21 -
Legal and taxation advice 71 69
Communication and technology 960 556
Business Process and Technology Programme—staff costs (see Note 1(a) and Note 1(c)) 326 273
Business Process and Technology Programme—research and project management
costs (see Note 1(c)) 821 549
External relations 35 22
Human resource and recruitment activities 567 303
Technical research library 171 148
Meeting video conferencing 142 140
Travel and meetings 21 78
Other office-related costs 230 167
Covid-19-related expenditure to support remote working - 41
ISSB-related activities 254 -
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c) Business Process and Technology Programme—Intangible assets (continued)
2021
£’000
CRM
system
2021
£’000
Modern
web platform
2021
£’000
Finance
system
2021
£’000
Other
2021
£’000
Total
Cost
1 January 259 955 82 165 1,461
Additions 75 247 82 125 529
Disposals - - - - -
31 December 334 1,202 164 290 1,990
Accumulated amortisation
1 January - - – 7 7
Charge for the year 49 180 – 40 269
Disposals - - – - -
31 December 49 180 – 47 276
Carrying amount 285 1,022 164 243 1,714
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
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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 £42,000 in 2021 (2020: £37,000 ). Additionally, the
Foundation reimburses 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 IASB’s other advisory bodies meet their own costs for attending meetings and are not
remunerated by the Foundation. As a result of the continued covid-19-related travel restrictions, most meetings were held virtually.
No travel and meeting costs were incurred in 2021.
The remuneration, travel and meeting costs for these committees and advisory bodies were:
2021
£’000
2020
£’000
IFRS Advisory Council remuneration costs 42 37
IFRS Advisory Council travel and meeting costs - 8
IFRS Interpretations Committee travel and meeting costs - 29
Capital Markets Advisory Committee travel and meeting costs - 3
2 Trustee oversight
The Foundation’s management and governance is overseen by the Trustees of the Foundation. There were 21 Trustees until
30 June 2021; thereafter 22 Trustees (2020: 22 ). The Trustees met 10 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 seven 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 the continued covid-19-related travel restrictions, all the Trustee meetings were held virtually. This is reflected in the
reduced travel and meeting costs for this year and the prior year.
Costs associated with Trustee activities are:
2021
£’000
2020
£’000
Remuneration costs 642 662
Travel and meeting costs 18 109
3 Premises, occupancy and related expenses
a) The components of premises, occupancy and related expenses are as follows:
2021
£’000
2020
£’000
Rates, insurance and energy 721 662
Service charges 368 349
Depreciation (see Notes 3 and 4) 1,310 1,258
Other costs 110 132
Less amounts allocated to publications and related activities expenses (see Note 7) (322 ) (329 )
The estimated costs of reinstating the premises when the leases expire of £551,000 (2020: £460,000 ) are recognised as lease
reinstatement obligations. All equivalent obligations that are included in leasehold improvements are recognised evenly over the
remaining lease terms (see Note 4).
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b) 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
over the remaining periods of the related leases, or their useful lives, whichever is shorter (see Note 4). Furniture and equipment
are depreciated over three or five years .
2021
£’000
Leasehold
improvements
2021
£’000
Furniture and
equipment
2021
£’000
Subtotal
Cost
1 January 2,924 1,271 4,195
Additions 166 273 439
Disposals - - -
31 December 3,090 1,544 4,634
Accumulated
depreciation/amortisation
1 January 861 939 1,800
Charge for the year 400 171 571
Disposals - - -
31 December 1,261 1,110 2,371
Carrying amount 1,829 434 2,263
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
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4 Leases
During 2021, the Foundation has leases for two office premises in London and Tokyo and some IT equipment. With the exception of
short-term leases and leases of low-value, each lease is reflected in the statement of financial position as a right-of-use asset and a
lease liability.
The 10-year London office premises lease commenced in January 2018. 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 10-year Tokyo office premises lease commenced in October 2012 and is set to end in September 2022. Negotiations for the new
office premises lease will commence from April 2022.
Right-of-use assets are recognised at cost, and comprise the amount of the initial measurement of the lease liability less
accumulated depreciation. There were no additions during the year.
2021
£’000
2020
£’000
Right-of-use assets at 1 January 4,844 5,582
Depreciation charge for the year (739 ) (738 )
Carrying amount of right-of-use assets at 31 December 4,105 4,844
Lease liabilities are recognised at the present value of lease payments not yet paid discounted using the Foundation’s incremental
borrowing rate at the date of first applying IFRS 16 in 2019 of 3 %. Interest expense is included in finance costs (see Note 10).
Future undiscounted lease commitments under the premises leases are:
2021
£’000
2020
£’000
Within one year 1,053 1,075
In two to five years 3,008 3,063
More than five years 1,003 2,005
Effect of discounting (448 ) (596 )
Lease liability at 31 December 4,616 5,547
Current 933 927
Non-current 3,683 4,620
Total cash outflows related to leases during the year were £1.1 million (2020: £1.1 million); the change in the lease liability of
£931,000 (2020: £895,000 ) represents cash outflows from the repayment of principal (see Statement of Cash Flows).
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5 Taxation
The Foundation was incorporated in February 2001 and is registered in the US as a not-for-profit corporation known as a Section
501(c) (03) tax-exempt organisation. Corporations in the US are registered in the individual states; the Foundation is registered in
the State of Delaware. The Foundation is required to register in any state where charitable funds have been raised. Currently, the
Foundation is registered in 8 states including Delaware.
The Foundation registered in 2001 in the UK as an Overseas Company. Registration of an overseas company is required when
there is some degree of physical presence in the UK such as a place of business or branch through which it carries on business. The
Foundation, like most overseas companies, is required to send accounting and governance related documents to Companies House.
In the US, the Foundation is required to file information tax returns with the federal and state authorities. The federal tax
return, known as Form 990, provides extensive financial, governance and compliance information. The state returns are brief in
comparison, but all require that Form 990 is attached to the state filings. The actual business trading activities of the Foundation
surrounding its publications and related activities (Publications) do not present any US tax filings requirements.
This is not the case for the UK. The Foundation reached an agreement with the UK authorities in April 2006 (HMRC agreement)
regarding its corporate tax position in the UK. It was broadly agreed that Publications constitutes a 'business activity' while standard
setting is a 'non-business activity'. Publications are therefore assessed for UK tax. It was also agreed that contributions received by
the Foundation were not subject to UK tax. The UK tax treatment is broadly in line with UK charities which pay no tax on donations
but are assessed for tax on their trading business.
a) Current tax charge
In the HMRC agreement, there are a number of specific elements to the calculation which were stipulated by HMRC and with which
the Foundation complies. The major elements are as follows:
• all publications and related revenues are taxable as trading profits;
• direct cost of sales and direct operating expenses for publications are deductible from trading profits;
• a proportion of the general operating expenses of the Foundation including remuneration, accommodation and other expenses are
deductible in calculating trading profits;
• a deduction is allowed for ‘notional royalties’ calculated at set proportions of UK publications revenues, i.e., 50% of revenues from
electronic products and 20% of revenues from printed products. HMRC agreed to these ‘intellectual property’ deductions to account
for the costs of creating the actual content of publications; and
• a working capital deduction was agreed to compensate for the costs of funding provided to publication activities.
In 2021 this calculation produced a net taxable profit of £2,192,000 (2020: £2,415,000 ). The Foundation has utilised its carried-
forward tax losses and the current tax liability for the period is £nil (2020: £nil). At the end of 2021, the IFRS Foundation carried
forward trade and non-trade losses for UK tax purposes of £1,466,000 (2020: £3,658,000 ).
The tax charge comprises:
2021
£’000
2020
£’000
Current tax charge / (credit) - -
Deferred tax charge / (credit) 452 (569 )
Total tax charge / (credit) 452 (569 )
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Governance
5 Taxation (continued)
The tax assessed for the period is higher than the standard rate of corporation tax in the UK (19 %). The reason for the difference
between the actual tax charge for the year and the standard corporation tax applied to profits for the year is:
2021
£’000
2020
£’000
(Loss) / profit before tax (354 ) 2,907
Applicable tax rate 19 % 19 %
Tax at the applicable tax rate (67 ) 552
Effects of:
• non-taxable business activities 516 (70 )
• expenses not deductible for tax purposes 2 2
• previously unrecognised deferred tax assets - (1,050 )
• deferred tax not recognised - (3 )
• adjustment differences in prior years 1 -
Tax charge / (credit) 452 (569 )
Income not subject to tax mainly represents voluntary contributions.
b) Deferred tax asset
Unrelieved tax losses and other deferred tax assets are recognised only to the extent that it is probable that future taxable profits
will be available against which to use the asset. Deferred tax assets are reduced to the extent that it is no longer probable that the
related tax benefit will be realised.
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.
At the end of 2021, the IFRS Foundation carried forward trade and non-trade losses for UK tax purposes of £1,466,000 (2020:
£3,658,000 ), and it has recognised a deferred tax asset of £117,000 (2020: £569,000 ) related to remaining carried-forward losses net
of temporary differences. Deferred tax has not been recognised on pre-April 2017 non-trade losses carried forward of £157,486 (2020:
£159,712 ). This is because it is uncertain whether the Foundation will be able to utilise these losses to offset future taxable income.
Changes to UK corporation tax rates were announced on 3 March 2021, which confirmed an increase in the tax rate from 19 % to 25%
with effect from 1 April 2023. Deferred taxes that have been recognised at the balance sheet date are expected to reverse before 1
April 2023, and therefore continue to be measured at the tax rate of 19 %.
2021
£’000
2020
£’000
Deferred tax asset b/f 569 -
Deferred tax (charge) /credit for the year (452 ) 569
Deferred tax asset c/f 117 569
Deferred taxes arising from temporary differences and unused tax losses are summarised as:
Losses
£’000
Temporary
differences
£’000
Total
£’000
Deferred tax asset b/f 665 (96 ) 569
Deferred tax charge for the year (417 ) (34 ) (451 )
Deferred tax charge – adjustment differences in prior years (1 ) - (1 )
Deferred tax asset c/f 247 (130 ) 117
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Government
22%
Grant
27%
6 Contributions
Contributions to the Foundation are voluntary and are recognised as income in the year designated by the funding provider.
Contributions that have been received but are designated for use after the reporting date, are deferred and recognised as
contributions received in advance. As at year end £615,000 (2020: £753,000 ) 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 £3.5 million (2020: £3.4 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 £3.8 million / €4.5 million (2020: £4.4 million / €4.8 million) is payable by instalments, and contributions receivable includes
the final grant instalment expected for 2021 of £1.9 million (2020: £2.2 million). The AFRC grant of £561,300 was received in full in
2021 (2020: £561,300 ).
All contributions received are for general use by the Foundation except for funding of the Asia-Oceania office.
The Foundation receives separate funding from the Financial Accounting Standards Foundation of Japan towards the operations
of the Asia-Oceania office located in Tokyo. The Foundation utilised £370,000 / ¥55,000,000 of funding in 2021 (2020: £358,000 /
¥50,000,000 ). All of this amount has been recognised in other income (2020 £315,000 ).
The Foundation receives contributions in a range of currencies:
2021
£’000
2020
£’000
UK pounds 2,678 2,504
US dollars 4,774 4,884
Euro 6,266 6,884
Other 3,607 3,821
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 pages 58 to 60.
Financial Institution
5%
Government
23%
Grant
25%
Corporate 3%
2021 2020
Accountancy
Body/
Regulatory
Body
31%
Accountancy
Body/
Regulatory
Body
31%
Accountancy
and Auditing
Firm
13%
Accountancy
and Auditing
Firm
13%
Financial Institution
4%
Corporate 3%
CONTRIBUTIONS BY FUNDING PROVIDER
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Governance
7 Publications and related activities
The table presents the components of the net income generated by the IFRS Foundation’s publications and related activities:
2021
£’000
2020
£’000
Revenues from contracts with customers
Publications 1,350 1,328
Subscription services 1,482 1,549
Licensing 8,164 8,752
Conferences and speaking engagements 95 84
Expenses
Staff salaries and related costs 855 895
Cost of goods sold 333 544
Depreciation 159 163
Occupancy 163 166
Communication technology 198 204
Other costs 379 398
Net income from publications and related activities 9,004 9,343
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 Accounting 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 utilise IFRS Accounting 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 Accounting 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.
Customers are entitled to refunds or returns in accordance with statutory requirements, but such occurrences based on experience
are expected to be infrequent and immaterial.
Trade and other receivables include £232,000 (2020: £201,500 ) from licensing contracts. Publications revenue received in advance
relates to subscription services and licensing contracts; the amount of £1,164,000 recognised at the beginning of the year has been
recognised as revenue during the year, and the amount of £1,193,000 recognised at the end of the year is expected to be recognised
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 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 contractual maturity analysis for lease liabilities is presented in Note 4. All other non-derivative financial liabilities comprising
trade and other payables are due within 6 months.
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 short-term investments, all of which are of high
credit quality.
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 2021 the Foundation has a contribution receivable of £1,894,000 (2020: £2,185,000 ) from a single funding provider,
the European Union. This contribution receivable reflects the final grant instalment for 2021. 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 immaterial.
The carrying amount of the Foundation’s financial assets represents the maximum credit exposure.
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.
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Governance
Interest rate risk
Fixed income interest rate risk is the risk that the fixed income bonds will lose value due to a change in interest rates. To mitigate this
risk, the Foundation invests in fixed-interest, highly liquid investments, all of which are high credit quality, and are held to maturity.
In August 2020, the International Accounting Standards Board issued Interest Rate Benchmark Reform – Phase 2. The Foundation is
not exposed to hedging relationships or directly affected by interest rate benchmark reform. No contractual cashflows of a financial
assets or financial liability measured at amortised costs changed as a result of interest rate benchmark reform.
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 the Trustees undertook a review of the foreign currency exposure of the Foundation. Based on the conclusion that that the
current levels of surplus reserves are sufficient to absorb foreign exchange risk, the decision was taken to discontinue incurring the
cost of purchasing forward foreign exchange contracts. The current book of forward contracts will expire in 2022. The Trustees
continue to monitor the position of foreign exchange risk to the IFRS Foundation and this is 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 table
presents the fair value and notional value of these financial instruments by currency:
2021 2020
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
Euro (Level 2) - - - £5 €1,950 1.104
Yen (Level 2) £34 ¥47,000 46.635 £6 ¥141,000 139.906
Financial liabilities
US dollars (Level 2) - - - - $6,550 -
Euro (Level 2) - - - (£66 ) €1,650 1.159
Yen (Level 2) - - - (£1 ) ¥47,000 141.170
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. Al l cu rr e nt fo r w a rd co nt ra c t s ex p i re in 202 2 .
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Governance
9 Investments
Bonds are recognised at fair value and subsequently measured at fair value through profit or loss. Bond values are quoted on active
presented in this table:
2021
Fair
value
£’000
2021
Face
value
£’000
2020
Fair
value
£’000
2020
Face
value
£’000
Current, including accrued interest 5,932 5,826 5,819 5,586
Non-current, including accrued interest 15,239 15,323 16,038 15,753
The Foundation measures all other financial instruments at amortised cost. Those financial instruments include financial assets with
a total carrying amount of £20 million (2020: £19.4 million) and financial liabilities with a total carrying amount of £636,000 (2020:
£586,000 ). 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
Finance income
2021
£’000
2020
£’000
Interest income 191 230
Fair value gains on forward foreign exchange contracts 67 210
Fair value gains on bonds - 227
Exchange gains on forward foreign exchange contracts and cash holdings 269 -
Finance costs
Interest on lease liabilities (142 ) (178 )
Fair value losses on forward foreign exchange contracts (259 ) (55 )
Fair value losses on bonds (381 ) -
Exchange losses on forward foreign exchange contracts and cash holdings (64 ) (295 )
(846 ) (528 )
Fair value gains and losses from bonds do not include interest income.
11 Events after the reporting period
The transfer of the Climate Disclosure Standards Board's people and intellectual property happened on 1 February 2022.
On 2 March 2022 the Trustees signed Memoranda of Understanding with German public and private sector institutions to formalise
the partnerships and funding arrangements required to establish the ISSB’s presence in Frankfurt.
There have been no events since 31 December 2021 that required an adjustment to the financial statements.
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Financials
FUNDING PROVIDERS
Jurisdiction Organisation
Australia
£561,300 Financial Reporting Council (FRC)
Brazil
£83,000
£50,000 + Itaú Unibanco S.A.
Less than
£25,000
B3 S.A. Petróleo Brasileiro S.A. (Petrobras)
Instituto dos Auditores Independentes do Brasil
Canada
£535,633
£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 Corporation
Taiwan Depository & Clearing Corporation
EU
£3,823,589 European Commission
France
£835,554 Ministry for the Economy and Finance—Autorité des Normes Comptables
Germany Voluntary levy through the Accounting Standards Committee of Germany (DRSC)
£617,121
£25,000+
Allianz SE Fresenius Medical Care AG & Co. KGaA
BASF AG Fresenius SE & Co. KGaA
Bayer AG Merck KGaA
BMW AG Münchener Rückversicherungs-Gesellschaft AG
Continental AG RWE AG
Daimler AG SAP SE
Deutsche Börse AG Siemens AG
Deutsche Post AG Volkswagen AG
Deutsche Telekom AG
Less than
£25,000
Aareal Bank AG K+S AG
Aixtron SE Kion Group AG
Alstria Office REIT-AG Knorr-Bremse AG
Commerzbank AG Lanxess AG
DekaBank Metro AG
Deutsche Beteiligungs AG MTU Aero Engines AG
Deutz AG Norma Group SE
Drägerwerk AG & Co. KGaA Patrizia AG
Dürr AG Schaeffler Technologies AG & Co. KG
Fielmann AG SGL Carbon SE
Fraport AG Siemens Energy Global GmbH & Co. KG
Hornbach Holding AG & Co. KGaA Siemens Healthineers AG
Indus Holding AG Südzucker AG
Infineon Technologies AG United Internet AG
Instone Real Estate Group SE Westwing Group AG
2021 financial supporters (amounts translated into sterling on date received)
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Financials
FUNDING PROVIDERS (continued)
Jurisdiction Organisation
Hong Kong SAR
£54,210 Hong Kong Monetary Authority
Indonesia
£68,000
£25,000 + Financial Services Authority (OJK)
Indonesia Stock Exchange
International
£17,591 Bank for International Settlements
Ireland
£14,584 Central Bank of Ireland
Israel
£17,000 Israel Securities Authority
Italy
£629,656 Organismo Italiano di Contabilità
Japan
£1,864,681 Financial Accounting Standards Foundation
£370,000 Financial Accounting Standards Foundation—Restricted contribution for the Asia-Oceania office
Kazakhstan
£7,296 National Bank of Kazakhstan
Malaysia
£65,000 Malaysian Accounting Standards Board
Netherlands
£378,591
£250,000 + Ministry of Finance
Less than
£25,000
De Nederlandsche Bank
New Zealand
£76,133 External Reporting Board
Norway
£83,381 Financial Supervisory Authority of Norway
People’s Republic of China Through system created by the Ministry of Finance
£2,119,474
£500,000 + China Ministry of Finance
£100,000 + Chinese Institute of Certified Public
Accountants
Shenzhen Stock Exchange
Shanghai Stock Exchange
£50,000 + China Development Bank 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
Agricultural Bank of China China Mobile Communication Co., Ltd.
Bank of Communications Co., Ltd. China Telecom Corp., Ltd.
Bank of China Huaneng Power International, Inc.
China CITIC Bank Corporation Limited Industrial and Commercial Bank of China Limited
China Construction Bank Corporation PICC Property and Casualty Company Limited
China Merchants Bank
IFRS Foundation Annual Report 2021
60
Appendices
About us
Reports
Overview
2021–2022
Governance
Financials
FUNDING PROVIDERS (continued)
Jurisdiction Organisation
Portugal
£18,831 Banco de Portugal
Republic of Korea Contributions organised through Korea Accounting Standards Board
£464,370
£100,000 + Korea Accounting Standards Board
£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 Corporation Shinhan Financial Group Co., Ltd.
NongHyup Financial Group Inc. POSCO
Russia
£427,000 Ministry of Finance of the Russian Federation
Saudi Arabia
£145,324 Saudi Organization for Certified Public Accountants (SOCPA)
Singapore
£70,000 Ministry of Finance
South Africa
£7,350 Johannesburg Stock Exchange
Switzerland
£82,593
£50,000 + SwissHoldings
Less than
£25,000
Achiko AG Orascom Development Holding AG
Switzerland
Thailand
£81,251 Federation of Accounting Professions (TFAC)
United Kingdom
£1,546,000
£500,000 + Levy system organised by
Financial Reporting Council
Department for Business,
Energy & Industrial Strategy
United States of America
£376,130
£100,000 + CFA Institute
AICPA
£50,000 + Bank of America Corporation
£25,000 + Oracle Corporation
Less than
£25,000
Morgan Stanley PepsiCo, Inc.
International accounting firms
1
£2,192,528
(US$550,000
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)
1
Deloitte Touche Tohmatsu Limited, Ernst & Young, KPMG and PricewaterhouseCoopers have licensing
agreements with the Foundation, for which annual fees are received in addition to their voluntary contributions.
IFRS Foundation Annual Report 2021
61
Appendices
About us
Reports
Overview
2021–2022
Governance
Financials
IFRS ADVISORY COUNCIL
Represented body Represented by Position
Accounting Standards Committee of
Germany (ASCG)
Georg Lanfermann
1
President
AIA Group Garth Jones Group Chief Financial Officer
Banco Bilbao Vizcaya Argentaria María Ángeles
Pelaez Moron
Head of Global Financial Accounting
Basel Committee on Banking Supervision Katherine
Tilghman Hill
2
Chair of the Basel Committee’s Accounting and Auditing
Expert Group
Bayer Martin Schloemer Senior Vice President, Head of Global Accounting
BDO Ehud (Udi)
Greenberg
Professional Practice Partner at BDO Israel and at BDO
Global IFRS Advisory Group
BusinessEurope Kristian
Koktvedgaard
Head of VAT, accounting and auditing with the
Confederation of Danish Industry
Capital Markets Board of Turkey Sibel Ulusoy Tokgöz Deputy Head of the Accounting Standards Department
CFA Institute Giuseppe Ballocchi Member of CFA Institute’s Future of Finance Content
Council and partner at Alpha Governance Partners
Chinese Ministry of Finance Xianzhong Li Director General of the Accounting Regulatory
Department
Corporate Reporting Users’ Forum Greig Paterson Managing Director of UK Insurance Research at Keefe,
Bruyette & Woods
Council of Institutional Investors James Andrus Investment Manager of Sustainable Investments at the
California Public Employees’ Retirement System
Deloitte Trevor Derwin Partner at Deloitte Africa
Eumedion Martijn Bos Policy Advisor on Reporting and Audit
European Accounting Association Thorsten Sellhorn EAA President; Professor of Accounting and Director of the
Institute for Accounting, Auditing and Analysis at Ludwig-
Maximilian University Munich’s School of Management
European Central Bank David Grünberger Heads the Prudential Regulation and Accounting Section
European Federation of Financial Analysts
Societies (EFFAS)
Javier de Frutos Chair of the Commission on Financial Reporting of the
European Federation of Financial Analysts’ Societies
(EFFAS)
European Financial Reporting Advisory Group Saskia Slomp CEO
European Securities and Markets Authority
(ESMA)
Isabelle Grauer-
Gaynor
Head of Corporate Finance and Reporting Unit
External Reporting (XRB), New Zealand Ken Warren Chief Accounting Advisor for The New Zealand Treasury
Fédération Internationale des Experts-
Comptables Francophones
Aziz Dieye Representative and founder, Chair and CEO of Cabinet Aziz
Dieye
Financial Executives International Ron Edmonds Controller and Vice President of Controllers and Tax for Dow
Grant Thornton Daniel Civit Partner and Head of the Accounting Practice Group
Individual (University of São Paulo—School
of Accounting and Actuarial Science)
Eduardo Flores Assistant Professor in the Accounting and Actuarial
Science Department
Individual (Johannesburg Stock Exchange) Tania Wimberley Head of Financial Reporting Issuer Regulation Division
Insurance Europe (European Insurance and
Reinsurance Federation)
Anna Vidal Tuneu Vice-Chair of the Financial Reporting Working Group
(FRWG); and Director of Group Accounting Policies and
Regulation at CaixaBank Group
AS AT 31 DECEMBER 2021 Chair: Bill Coen, former Secretary General of the Basel Committee on Banking Supervision
1
Replaced Andreas Barckow as representative for ASCG in March 2021.
2
Interim representative pending appointment of permanent member by the Basel Committee on Banking Supervision.
IFRS Foundation Annual Report 2021
62
Appendices
About us
Reports
Overview
2021–2022
Governance
Financials
IFRS ADVISORY COUNCIL (continued)
Represented body Represented by Position
International Actuarial Association Andrew
Chamberlain
Chair of the Actuarial Standards Committee
International Association for Accounting
Education and Research (IAAER)
Leslie Hodder 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 at the Confédération Nationale du
Crédit Mutuel
International Corporate Governance Network Ian Burger Head of Responsible Investment
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)
Antonio Quesada Member of the IOSCO Board; Chair of the IOSCO Inter-
American Regional Committee; Vice President of
Regulatory Policy at the Mexican National Banking and
Securities Commission (CNBV)
International Organization of Securities
Commissions (IOSCO)
Marie Seiller Member of IOSCO Committee on Issuer Accounting, Audit
and Disclosures; Chief Accountant at the French Autorité
des Marchés Financiers (AMF)
Investment Association Emma Millar Director EMEA Accounting Policy Blackrock
Investment Company Institute Alan Trotter Chief Financial Officer: Europe, Middle East & Africa at
Invesco
Japanese Institute of Certified Public
Accountants (JICPA)
Aiko Sekine Advisor
KPMG Andrew Marshall Head of the Accounting and Reporting
Lukoil Sergey Epifanov Head of the International Financial Reporting Department
Malaysian Accounting Standards Board (MASB) Bee Leng Tan Executive Director
Ortec Finance Tessa Kuijl Head of Financial Reporting: Issuer Regulation
PwC Henry Daubeney Global Head of IFRS and ESG Reporting
S&P Global Ratings Osman Sattar Director and Accounting Specialist of the EMEA Financial
Institutions Group
The Securities Analysts Association of Japan
(SAAJ)
George Iguchi Chief Corporate Governance Officer and Executive
Director at Nissay Asset Management
South Asian Federation of Accountants
(SAFA)
M P Vijay Kumar Chairman of Accounting Standards Board at the Institute
of Chartered Accountants of India (ICAI)
World Bank Barbara McGowan Head of Accounting Policy
Xiamen University Feng Liu Chair Professor and Director at the Centre for Accounting
Studies
OBSERVER ORGANISATIONS:
• European Commission
• Japan Financial Services Agency
• US Securities and Exchange Commission
Olivia Larmaraud (ACTEO & MEDEF), Carolyn Rogers (Basel Committee
on Banking Supervision), James Luke (EY) and Aziz Dièye (Fédération
Internationale des Experts-Comptables Francophones) stepped down during
the course of 2021.
More information about the Advisory Council can be found at
www.ifrs.org/groups/ifrs-advisory-council.
IFRS Foundation Annual Report 2021
63
Appendices
About us
Reports
Overview
2021–2022
Governance
Financials
OBSERVER ORGANISATIONS:
• Basel Committee on Banking Supervision
• European Commission
• International Organization of Securities Commissions
Jongsoo Han (Korea Accounting Standards Board) and Robert Uhl
(Deloitte) completed their terms on 30 June 2021. Bertrand Perrin
(Vivendi) stepped down early on 30 June 2021 to take up his new
position as an IASB member.
More information about the IFRS Foundation Interpretations
Committee, including member biographies, can be found at
www.ifrs.org/groups/ifrs-interpretations-committee.
IFRS INTERPRETATIONS COMMITTEE
AS AT 31 DECEMBER 2021 Non-voting Chair: Sue Lloyd, Vice-Chair, International Accounting Standards Board
1
Name Title Organisation Term ends
Renata Bandeira Controllership and Tax Director, Brazil Azul Airlines 30 June 2023
Andre Besson Head of Financial Reporting Guidelines Nestlé SA 30 June 2024
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
Karen Higgins Audit and Assurance Partner Deloitte 30 June 2024
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
M P Vijay Kumar Chief Financial Officer Sify Technologies 30 June 2024
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
Donné Sephton Head of Advisory Services FirstRand Limited group 30 June 2023
Yang Zheng Vice President New China Life Insurance
Company
30 June 2022
1
Bruce Mackenzie was appointed as new IFRIC Chair on 1 March 2022
Appendices
About us
Reports
Overview
2021–2022
Governance
Financials
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 2021, especially:
• our funding providers;
• those who have contributed with comments to our consultations;
• event partners, participants and hosts; and
• our customers.
Design: eighty3five Design Studio
Photography: Axel Gaube and Alex Griffiths
Thank you
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