The IASC Foundation has set four principles for a funding system in 2008 for its activities, which include its work overseeing the International Accounting Standards Board.
The foundation said the long-term financing system should be broad-based to include participants in the world's capital markets, including official institutions, to ensure diversification of sources. The system also has to be compelling. "A system must carry with it enough pressure to make free riding very difficult," said the foundation. In addition, the system of funding for the IASC needs to be open-ended and not contingent on any particular action that would infringe on the independence of the IASC Foundation and the International Accounting Standards Board.
The system also needs to be country-specific so the funding burden is shared by major economies of the world on a proportionate basis, using gross domestic product as the key determining factor of measurement.
For the United States, there is a voluntary system of 32 companies with contributions ranging from $3,750 to $200,000. The IASC anticipates receiving $3,500,000 in 2008 from the U.S. However, in some countries a levy is imposed. In the United Kingdom, the UK Financial Reporting Council imposes the levy.
Beginning in 2008, the IASC Foundation trustees have succeeded in establishing national funding regimes consistent with its four principles in a number of countries. The trustees estimate that nearly 12.5 million pounds of the 16 million pounds committed has been raised so far.
The IASB has been criticized for not having a mandatory basis of funding, as the Financial Accounting Standards Board does in the United States since passage of the Sarbanes-Oxley Act. FASB and the IASB have been working more closely together in an effort to converge International Financial Reporting Standards with U.S. generally accepted accounting principles.
