The International Financial Reporting Standards Foundation's trustees plan a series of initiatives for strengthening the accounting and sustainability reporting standards they oversee through the International Accounting Standards Board and the International Sustainability Standards Board, including approval of a five-year operating plan for both the IASB and the ISSB.
The operating and financing plan describes progress and a path to long-term financial resilience, based on a review of separate projected funding and resourcing requirements for the IASB and the ISSB over five years. The funding structure of the IFS Foundation has come under fire from some officials, including at the
The new IASB funding plan unveiled Tuesday addresses the need for a more diversified and durable funding base, incorporating the efficiencies gained from the IFRS Foundation's recent transformation program. In addition to working with all adopting jurisdictions to secure financial contributions, the IFRS Foundation said it will seek contributions from capital market participants that benefit from the Standards and will enhance licensing of the IASB's intellectual property.
The plan relies on a principle of shared responsibility: those who benefit from IFRS standards as critical capital market infrastructure have a responsibility to contribute to their development and maintenance. While the U.S. markets rely more heavily on U.S. GAAP, as set by the Financial Accounting Standards Board, many multinational companies whose shares trade on U.S. markets also file their financial reports using IFRS with the SEC.
The plan confirms the IASB's primarily single-location model and permits use of the IASB's accumulated reserves in the short term as a long-term, stable funding plan is implemented, consistent with the purpose for which those reserves are held.
The changes announced Tuesday come on the heels of the appointments of new leaders at the IFRS Foundation and the IASB. Last week, the IFRS Foundation trustees
"The IFRS Foundation's five-year plan provides clarity on the resources available to the IASB during this period," said IASB vice-chair and acting chair Linda Mezon Hutter in a statement. "It will help us to plan accordingly as we deliver on our priorities and begin to consider our future agenda under a new chair."
Other changes announced Tuesday include publication of
The proposed amendments operationalize the
ISSB funding
One of the SEC's criticisms relates to funding for the ISSB, a group that sets sustainability reporting standards even as the SEC has
It said funding for the ISSB has been secured that — alongside existing funding agreements and earned revenue streams — provides a path for giving the ISSB the resources to deliver its priorities through 2031. From this point, as adoption of ISSB standards matures, the ISSB will move to a more durable, long-term funding model.
Thanks to seed funding, the ISSB has used a multilocation model to foster adoption and build capacity for implementation since it was created in 2021 after the
"Our five-year operating and financing plan helps ensure the IFRS Foundation and its boards are equipped to deliver high-quality standards critical to global capital markets," said IFRS Foundation trustee chair Erkki Liikanen in a statement. "On behalf of the trustees, I extend my thanks to all those, current and future, who fund the important work of the IASB and the ISSB. In addition, I thank our funders — including those in Beijing, Frankfurt, Montreal and Tokyo — for supporting the ISSB as its journey began. Furthermore, we deeply appreciate the trust and support, including from philanthropies, for this next phase, as well as Swiss and Geneva authorities and private donors, as we establish a new office in Geneva as the seat of the ISSB."
The IFRS Foundation trustees have reaffirmed this model and plan to expand on it by setting up an office in Geneva to serve as the seat of the ISSB. Building on the ISSB's successful presence in Germany, the ISSB's Frankfurt office will continue to act as a hub for the ISSB's EU engagement. Each of the ISSB's offices will continue to provide key functions that enable the ISSB to deliver its strategy.
"I am thrilled that Switzerland, through our new Geneva office, is joining our global network," said ISSB chair Emmanuel Faber in a statement. "As a major international hub for sustainable finance and a unique centre for multilateral cooperation, Geneva is a natural ecosystem for our work. Access to resources and supply chains is being challenged amid rising geopolitical uncertainties, climate events and other emerging sustainability-related risks and opportunities. Now more than ever, capital markets need a global language for companies to communicate their resilience to investors. My sincere thanks to all those who make this work possible through their ongoing support."
