The International Accounting Standards Board is facing the prospect of a substantial deficit estimated at £5 million ($6.5 million).
During a meeting of an advisory council for the IASB’s parent organization, the International Financial Reporting Standards Foundation, IFRS Foundation managing director Michel Madelain discussed the £5 million deficit for the IASB. However, according to a spokesperson, it is based on a forecast that doesn’t factor in the anticipated savings that are expected to come through this year and next year from the implementation of a cost review that was completed earlier this year. Madelain presented the estimate to illustrate how little extra contribution would be required from the various jurisdictions if that amount were split by all the jurisdictions that currently require use of IFRS accounting standards.
Along with the need for more contributions from various jurisdictions, the IASB is also taking a hit from inflation. There’s been a gradual reduction of contributed revenue to the IASB by approximately 19% since 2019. Combined with cumulative global inflation in advanced economies in the same period of approximately 19%, that’s led to a reduction in purchasing power in real terms of approximately 38%, according to a presentation that Madelain gave at a World Standard-setters Conference in September.
Funding for the International Sustainability Standards Board, which is also overseen by the IFRS Foundation, is separate from the funding for the IASB and the funding model for the two boards differs.
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