The IFRS Foundation - the body that funds the global standard-setter, the International Accounting Standards Board (IASB) - has reported a drop in total operating income to £25.5m in 2012 from £26.1m year on year.
Publications and related revenues decreased by 3.6% in 2012 to £5.3m (2011: £5.5m) with bound volumes sales performing below expectations. Other revenues, including royalties and eIFRS, remained at 2011 levels.
According to its annual report, the IFRS Foundation's staff are examining options to increase revenue and explore further opportunities to maximise the IFRS Foundation's intellectual property by developing enhanced online services.
The report also revealed a drop in the Foundation's provision for tax. Last year the Foundation had to settle tax issues with HMRC and made a £460,000 provision for this in its 2011 accounts but the 2012 accounts indicate a reduction in this provision to £290,000.
Total operating expenses were £23.8m, a decrease of 7.4% from the previous year (2011: £25.7m). Savings were primarily from staff-related costs (salaries and travel) including a £300,000 one-time recovery in provision for payroll-related taxes.
The organisation also saw reductions with fees and other travel-related expenses. Trustees fees for 2012 were £631,000 (2011: £505,000) as one trustee waived his fee, while expenses for travel accommodation and related expenses went down to £2,113,000 (2011: £2,542,000).
The Foundation is financed primarily by national funding regimes and to a lesser extent from voluntary contributions which include transitional funding from accounting firms, which together (KPMG, Deloitte, Ernst & Young, BDO, Grant Thornton, PwC and Mazars) donate £5,969,970.
The UK, in particular, with its organised levy system collected by the Financial Reporting Council (FRC), contributed £939,270, while the US donated £1,220,628. The largest portion of funding came from the European Commission (£3,335,291).
As of 31 December 2012, the IFRS Foundation's net assets stood at £10.8m. These reserves amount to 45.5% of operating expenses, up from 32.7% in 2011.
In addition the Foundation announced proposed revisions to its due process, including a more extensive description of the process of assessing the likely effects of a standard or interpretation.
In the last year, it has also completed a review of the IFRS interpretations committee (IFRC), 'resulting in a more nimble and responsive interpretations function', according to the annual report. It has also restructured the senior management with the separation of the roles of chairman of the IASB and CEO of the IFRS Foundation.
The Foundation has also confirmed that it is reviewing its external auditor and plans to put the business out to tender.
