PURPOSE: to propose the continuation of the financing
of the European Financial Reporting Advisory Group (EFRAG) for the
period 2017-2020.
PROPOSED ACT: Regulation of the European Parliament
and of the Council.
ROLE OF THE EUROPEAN PARLIAMENT: the European
Parliament decides in accordance with the ordinary legislative
procedure and on an equal footing with the Council.
BACKGROUND: in 2009, the European Parliament and the
Council established a Community Programme to support specific
activities in the field of financial services, financial reporting
and auditing. This programme was extended with the Regulation
(EU) No 258/2014 of the European Parliament and the Council
("Financing Regulation"). The beneficiaries of the extended
programme are the International Financial Reporting Standards
Foundation (IFRS Foundation), the European Financial
Reporting Advisory Group (EFRAG) and the Public Interest
Oversight Board (PIOB).
EFRAG was established in 2001 as a private
organisation to provide the Commission with technical expertise in
financial reporting matters.
On the basis of Regulation
(EU) No 258/2014, the IFRS Foundation and the
PIOB benefit from Union co-financing in the form of
operating grants until 31 December 2020.
In view of the uncertainties related to a major
governance reform the organisation was undergoing in 2014, the
co-legislators decided to limit its financing period until the
end of 2016 and called on the Commission to submit a
legislative proposal, if appropriate, to continue financing of
EFRAG after 31 December 2016.
On 12 November 2013, the Commission published the
report of Philippe Maystadt, special advisor to the
Commissioner responsible for internal market and services, in which
he outlined potential reforms to EFRAG governance aimed at
reinforcing the Union's contribution to the development of
international accounting standards.
The Commission closely monitored the implementation of
the reform of EFRAG governance and found that it successfully
implemented the conclusions of the special advisors report,
by implementing a new governance structure which has increased the
legitimacy and representativeness of EFRAG. As a result, EFRAG is
now well equipped to strengthen the legitimacy of its
positions and significantly contribute to the objective of
Europe speaking with one voice.
Therefore, it is appropriate to propose to continue
financing of EFRAG for the period 2017-2020 in order to meet the
long-term objectives of the Union programme to support specific
activities in the field of financial reporting and
auditing.
CONTENT: this proposal seeks to amend Regulation (EU)
No 258/2014 in order to increase the budget of the Union
Programme to support specific activities in the field of financial
reporting and auditing for the period of 2014-2020 and to
support the activities of EFRAG, which contribute to the
achievement of the policy objectives of the Union in relation to
financial reporting.
In line with the Financing Regulation, EFRAG was
allocated an amount of EUR 9 303 000 for the period 2014-2016. The
current regulation proposes to allocate to EFRAG an additional
amount of EUR 13 831 000 for the period
2017-2020.
BUDGETARY IMPLICATIONS: the proposed regulation
prolongation of the financing of EFRAG for the period 2017-2020
will increase the total budget of the programme to support specific
activities in the field of financial reporting and auditing from
EUR 43.176 million to approximately EUR 57
million.