In a difficult year for the IASB, it reported a £1m drop in comprehensive income to £2.7m in 2015, down from £3.7m in 2014.  Total income from all activities was down by £1m to £27.4m, while total operating expenses remained unchanged at £24.5m.

In 2015 contributions were £21.3m, a decrease of £1.3m from 2014. In its commentary on the accounts, the Foundation said contributions in 2014 included a one-off payment of $3m (£1.8m) from the Financial Accounting Foundation in the US.

The US total contribution for the year was £796,539, which included two contributions of over £100,000, one from Morgan Stanley and the other from Citigroup. In 2014, the US provided a total of £2.6m, including the £1.8m one-off payment, representing a tenth of the board’s total income.

In contrast, the EU contribution was £3.29m, up from £3.07m in 2014. The UK’s contribution, raised via the Financial Reporting Council levy, was £872,703, a marginal increase on the 2014 figures of £862,717 and similar to the amounts paid by other EU members such as Germany and France.

International accounting firms contributed £7.03m, including £1.8m from each of the Big Four firms.

In its report, the Foundation says staff made successful efforts in negotiating new agreements for licensing, permission and waiver fees; revenue amounted to £2.2m, an increase of £238,000 or 12% compared to 2014. Subscriptions and book sales amounted to £1.7m and £1.6m respectively

Total operating expenses were £24.5m, unchanged from 2014. The main costs are the salaries and related costs for the board, technical staff and support staff, which amounted to 79% of the remaining operating costs without inclusion of expenses for publications.

For US tax purposes, the Foundation is classified as a not-for-profit, tax-exempt organisation and has an arrangement with HMRC regarding its UK status. In 2006 the Foundation reached an agreement with the UK authorities regarding the status of taxation on its publications and related revenues. For 2015 the taxation expense is calculated on that basis, and is estimated to be £nil (2014: £nil).

At the end of 2015, the Foundation carried forward a loss for UK tax purposes of £5.55m (2014: £5.06m). The Foundation does not recognise this loss as a deferred tax asset because of the uncertainty of being able to utilise these losses to offset future taxable income.

Lack of focus rejected

Masamichi Kono, chair of the IFRS Foundation monitoring board, said the board was ‘quite sensitive’ to comments it spent too much time on organisational matters such as trustee appointments and membership issues, rather than exercising proper public interest oversight over the Foundation’s activities and taking steps to address this.

In his review of what he described as ‘a very challenging year’ for the board, Kono said that ‘work to achieve convergence between the IFRS standards and national accounting standards has been making steady progress in the past decade, although it has seemed to be encountering difficulties recently’.

‘It is clear that more time and effort will be needed to achieve largely harmonised standards in a number of key areas such as leasing and insurance. Because further progress has been made towards global adoption of IFRS Standards in recent years, there is a need to further improve governance at the IFRS Foundation, as the stakeholder community grows on a global scale,’ Kono said.

Michel Prada, chair of the IFRS Foundation trustees, reported that 119 of 143 jurisdictions, or 83% cent, now require the use of IFRS standards for all or most publicly listed companies, rising to more than 90% if jurisdictions that allow voluntary use of the standards are included.

Prada also pointed out: ‘While foreign registrants are allowed to list on US regulated markets using IFRS Standards, what will happen in the US with regard to our standards for domestic companies is still not clear.’

IASB chair Hans Hoogervorst described the work to finalise the new leases standard, IFRS 16 Leases, as ‘one of the great achievements for 2015’.

He also said the board had moved further on plans to revise its Conceptual Framework, saying this would a top priority for 2016, along with the initiative to improve disclosures in financial reporting. There has been criticism that work on the Conceptual Framework revision has been slow and lacked direction.

On the disclosure issue, Hoogervorst said: ‘We must make disclosures more effective and discourage boilerplate reporting. We must improve performance reporting, making financial reporting easier to digest without sacrificing the quality and rigour of our standards.’

The report’s title is ‘Focussing on the future’ and the Foundation says its priorities for the year are to develop a single set of high-quality, globally enforceable accounting standards; pursue global adoption of IFRS Standards; support consistent application and implementation of IFRS Standards; and ensure continued independence, stability and accountability of the IFRS Foundation.

The 2015 IFRS Foundation - IASB - annual report is here