Re Funding of the International Accounting Standards Board (IASB)

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European Association of Listed Companies IVZW-ASBLI

                                                              EUROPEAN COMMISSION
                                                              To Mr. Alexander SCHAUB
                                                              Director General
                                                              DG Internal Market and Services
                                                              1049               BRUSSELS

Per e-mail to

Brussels, 31 May 2006

Dear Mr. Schaub,

Re: Funding of the International Accounting Standards Board (IASB)

EALIC, the European Association of Listed Companies, promotes the common interests of
European issuers on a European level. Its activities cover the legal and regulatory framework
specific to listed companies in general and the issuing and trading of securities in particular.
EALIC was incorporated in December 2002 as an international non-profit association. Its current
member-base counts six national associations of listed companies, namely VEUO (Netherlands),
ANSA and AFEP (France), ABSC-BVBV (Belgium), ASSONIME (Italy) and SEG (Poland). In
addition, some seventy public companies from the mentioned countries, as well as from Portugal
and Spain, are direct members of our association. As such, EALIC represents many hundreds of
leading issuing companies. (Further information can be found in Enclosure 1)

We are writing to you regarding the search for possible solutions for the future funding of the
IASB. EALIC thanks you for the informal meeting with peer associations that you chaired on 22
May. The exchange of views was most interesting. As a follow up to this meeting, you will find
hereinafter our members’ comments with regard to the Commission’s proposals as described in
the preparatory document for the said meeting and as explained during the meeting itself.

We understand that today, the funding of the IASB mainly derives from substantial contributions
by the Big Four and a limited number of large companies. The commitments taken thereto will
however expire by the end of 2007. Therefore, something needs to be done to assure the future
funding of the IASB while safeguarding its independence at the same time. Some countries have
already set up a voluntary system of fundraising to cover short term funding needs.

We understand furthermore that one possible scenario contemplated by the Commission is a
preferably compelling, not compulsory, fee-based funding scheme carried out by listed companies,
with the fees being collected by stock exchanges.

                                              * * *

Secretary General                 Mail address                       Telephone +32 (0)2 289 25 70
Mrs. Dorien FRANSENS              Rue Belliard 4-6                   Fax       +32 (0)2 502 15 60
                                  1040 BRUSSELS                      E-mail
European Association of Listed Companies IVZW-ASBLI

While we appreciate the need for a sound funding system to guarantee the continuity in setting
high-quality accounting standards and interpretations, many of our companies wonder why the
resources of an organism, that is to issue publicly applicable rules, should be privately funded.

As to the question who should contribute to the funding, we would object to any scheme or
recommendation at EU level that would exclusively target listed companies. Such approach
would in our view underestimate the impact and importance of IAS/IFRS, the use of which is not
strictly reserved to public companies. While such may indeed be the case in some Member States,
others provide for the optional or even mandatory application of these standards by non listed
companies. Furthermore, some of our members point out that using listing as the determining
factor to define the parameters of the funding scheme (who shall contribute, how much, who shall
collect, etc.), can be an obstacle in their search for the most efficient financing, as it adds more
costs to already expensive capital markets. As a consequence, we should not exclude up front
other securities markets participants and stakeholders. All parties benefiting from IAS/IFRS
could be involved in a possible funding scheme, depending on the national situation.

In addition, EFRAG funding, which is presently provided by some European business
organizations and by the accounting profession, must be consolidated on an enlarged basis. Our
members consider that the system to be organized for the IASB funding, should also be used to
finance EFRAG in parallel, since EFRAG is a key element in ensuring European input in the
IASB process and in providing endorsement advice to the European Commission.

A fundamental remark that we wish to make concerns the area of governance. Our members are
strongly dissatisfied with the current governance of the IASB and call for a fundamental and
structural revision. In addition, the Commission will not disagree that a stronger European
representation, in particular, would be appropriate.

Given the many divergences existing across Europe in terms of the scope of applicability of
IAS/IFRS, the funding of the national, European and international bodies, we believe that the
funding issue should be addressed at national level and that each country should enjoy maximum
flexibility. National organizations can play an important role in the debate. We understand that
several EU countries already set up voluntary schemes that are functioning in an effective manner.
Any initiative that would be contemplated at community level, should bear these principles in

                                              * * *

We understand that the issue will be brought up at the ECOFIN meeting scheduled on 7 June,
with the objective to issue, in the summer, a clear statement, in which the key characteristics of a
funding scheme would be outlined. We do ask you to take into account the concerns and
recommendations of listed companies during your discussions with ECOFIN and encourage the
Commission to maintain the dialogue with all stakeholders.

European Association of Listed Companies IVZW-ASBLI

We would be happy to discuss the contents of the present at your convenience.

Yours sincerely,

Secretary General

Enclosure : 1