INTERNATIONALACCOUNTING STANDARDS COMMITTEE

FOUNDATION

ANNUAL REPORT 2001

InternationalAccounting Standards

Board®

CREATING A GLOBALSTANDARD SETTER

CHRONOLOGY

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1995IASC Board agrees on a work programme tocomplete a core set of standards as the basisfor consideration of endorsement by theInternational Organization of SecuritiesCommissions (IOSCO).

1997IASC Board forms a Strategy Working Party toconsider IASC’s future strategy and structurefollowing the completion of the core standardswork programme.

1998IASC completes the core standards project.

1999Strategy Working Party publishes its final report,Recommendations on Shaping IASC for theFuture. The report calls for a 14-memberindependent standard-setting body, composedof men and women chosen on the basis of theiraccounting expertise, relevant experience, andability to work in harmony towards the commonobjective.

2000IOSCO recommends to its members that theyaccept financial statements complying withInternational Accounting Standards (IASs), with‘supplemental treatments’ as necessary, forcross-border listings.

2000 MARCH IASC Board approves new IASC Constitution.

2000 MAYIASC Nominating Committee appoints19 Trustees of the restructured IASC, chairedby Paul A. Volcker, former Chairman of the USFederal Reserve Board.

2000 JUNE IASC Trustees hold first meeting.

Sir David Tweedie becomes Chairman-designate of the new full-time standard-settingboard.

2000 OCTOBER IASC Trustees launch financing programme,seeking underwriting commitments to providemore than £11 million a year for the first fiveyears of operations.

2000 DECEMBER IASC Trustees name the new standard-settingboard, the International Accounting StandardsBoard (IASB).

2001 JANUARYThe Trustees announce the appointment of theremaining 13 Board members and put therevised Constitution into effect to enable theIASB to begin work in April.

2001 FEBRUARYThe Trustees establish the new legal entity, theInternational Accounting Standards CommitteeFoundation, as a not-for-profit corporation,registered in the State of Delaware, USA. TheIASB’s operations are to remain in London.

2001 MARCHThe Trustees approve a proposal to change thename of the standards to International FinancialReporting Standards (IFRSs).

2001 APRILThe IASB meets for its first technical session.

2001 MAYThe IASB holds its first joint meeting with chairsof national standard-setters.

2001 JUNEThe operational headquarters of the new IASCFoundation and IASB opens at 30 CannonStreet in the City of London.

The 49-member Standards Advisory Council isannounced.

2001 JULYThe IASB approves its first work programme,consisting of nine active projects. The chiefaim is the convergence of differing standardson high quality solutions.

2001 NOVEMBERThe IASB releases its first Exposure Draft, aproposed Preface to International FinancialReporting Standards.

The Trustees also release a proposal for publiccomment to change the SIC’s name to theInternational Financial Reporting InterpretationsCommittee (IFRIC) and to expand theCommittee’s mandate.

2001 DECEMBERThe reconstituted Standing InterpretationsCommittee (SIC) is announced.

In its first year, the IASC Foundation receivesfinancial support from 188 supporters, centralbanks, international organisations, andassociations, totalling £12.8 million.

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IASCF ANNUAL REPORT 2001

REPORT OF THE CHAIRMANOF THE TRUSTEES

Paul A. VolckerChairman of the Trustees

F or some years, the forces ofglobalization have made the need foreffective, consistent, and broadlyaccepted accounting standards

increasingly apparent. Today, that conceptualneed has been reinforced by evident practicalproblems of interpretation, enforcement, andunderstanding of existing national standards.

Hardly a day passes without problems offinancial reporting appearing prominently in theinternational press. Clearly, the accountingprofession and standard setters face difficultchallenges. At the same time, the sense ofconfusion and uncertainty provides anopportunity for real reform and progress.

It is within this environment that the newInternational Accounting Standards Committee(IASC) Foundation and its main operating organ,the International Accounting Standards Board(IASB), were born in 2001, succeeding theformer IASC. The new organization waslaunched with widespread support amongregulatory authorities, international institutions,and business leaders throughout the world.

We Trustees believe that the reconstitutedorganization, on this strong foundation, canprove responsive to the evident challenges andto the changing business environment, helpingto develop the basis for more timely, accurate,and widely accepted financial reporting for the21st century. The role of the standard setter isboth clear and important. A single set of highquality accounting standards that cancommand respect around the world willdiscipline auditing approaches, simplify listing innational markets, and encourage effectiveenforcement by national and internationalauthorities.

The rationale for the effort is simple. Ifmarkets are to function properly and capital is tobe allocated efficiently, investors requiretransparency and must have confidence thatfinancial information accurately reflectseconomic performance. Investors should beable to make comparisons among companies

in order to make rational investment decisions.In a rapidly globalizing world, the importanceof accounting for comparable economictransactions in a comparable manner acrossvarious jurisdictions becomes compelling. Theformation of the IASB results from the growingconsensus on the logic of a global approach.

The goal of the IASB is ambitious, but afterthe first full year of operations, there is a realisticbasis for optimism. Companies, as well aspublic regulators, understand the need forconvergence of national and internationalstandards and support the effort. The keyplayers, including national standard setters andsecurities regulators, are at the table. TheTrustees are satisfied that Sir David Tweedie,the IASB Chairman, is fully-equipped to lead astrong 14-member board, bringing togetherhighly qualified professionals independent ofnational and political ties.

RESTRUCTURING THE IASCFormed at the initiative of regulators andbusiness leaders throughout the world, an IASCStrategy Working Party proposed a revisedIASC Constitution. A 19-member committee ofTrustees provides the oversight for the neworganization. The Trustees are also responsiblefor financing the effort and appointing themembers of the Board (IASB) and associatedcouncils and committees. The Board, which issolely responsible for setting the standards, iscomposed of men and women chosen on thebasis of their accounting expertise, relevantexperience, and ability to work in harmonytoward the common objective. The integrity ofthe process and an appropriate internationalperspective are protected by emphasis onindependence from political and outsidepressures and from purely nationalconsiderations.

Much of 2001 was spent bringing the visionof the Strategy Working Party into practice. InJanuary 2001, the 19-member Trusteesannounced the selection of the new IASB,which was to be based in London. To facilitateconsultation with interested parties throughout

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the developed and emerging economies, theTrustees appointed the 49-member StandardsAdvisory Council, including business leaders,official organizations, and academics that willmeet with the Board about three times a yearand must be consulted on major Boarddecisions. To ensure uniform implementationand enforcement of accounting standards, aninterpretations committee of experiencedauditors and practitioners was appointed inDecember. With these pieces in place, it shouldbe possible to capture economic transactions infinancial reports accurately and to gain therespect and authority essential to the commonapplication of international standards worldwide.

SECURING THE FINANCESThe Strategy Working Party envisaged the newIASB would be supported mainly by privatecontributions of auditing firms and businessenterprises internationally. In implementing thatapproach, the Trustees needed to ensureadequate financial commitments to cover theannual operating budget of about £11.5 million(US $16.5 million). The budget was largelydetermined by the need to pay salaries thatwould attract qualified Board and staff membersand by the rather heavy travel costs of anorganization that must regularly consultconstituents around the globe. At the sametime, the structure put forward by the IASCConstitution safeguards the independence ofthe standard setting process, ensures that allmeetings of the IASB are in public, and enablesall interested parties to participate in thestandard-setting process without prejudice.

In order to obtain rapid assurance that thenew organization could proceed expeditiouslyand confidence about its financial stability, theIASC Foundation established an “underwriter”class of supporter of major international financialand business firms. Underwriter companiesprovided five-year pledges ranging from$100,000 to $200,000 per year. The Trusteeswill seek to reduce the annual pledges as newsources of funding from companies andcommercial activities become available. TheTrustees are seeking to broaden the fundingsources and reduce proportionately thecommitment of underwriters.

I am delighted to report that the fundingprogram to date has been a solid success. Inaddition to the underwriting group, the “BigFive” accounting firms have pledged nearly athird of the estimated budget. Over 30 central

and development banks around the world haveprovided tangible, as well as moral, support.Official international financial institutions havejoined the financing effort. A large number of theworld’s leading multinationals are on board.Finally, demonstrating the depth of support inmany regions, leading business groups inEurope, Japan, and the United States haveformally endorsed the effort and providedfinancial assistance.

In total, 188 corporations, associations, andother institutions provided financial support,totalling £12.8 million (US $18.3 million) in 2001.

BECOMING A GLOBAL STANDARDThe Trustees and the IASB have takensignificant steps in the organization’s first year toencourage the application and enforcement ofits standards throughout the world. Only byinternational consistency will the world’seconomies realize the full benefits of accurateand transparent financial reporting.

The Trustees and the IASB made particularefforts to maintain contact with nationalstandard setters and securities regulators in sixcontinents, recognizing that internationalconsistency is dependent upon nationalregulators accepting IASB standards for listingand other purposes. Aided by the selection ofseven official liaison Board members with officesat national standard setters, the IASB is workingclosely with national standard setters toharmonize work programs and reach the sameconclusions. The International Organization ofSecurities Commissions (IOSCO), the EuropeanCommission, the U.S. Securities and ExchangeCommission (SEC), and the Japan FinancialServices Agency (FSA) are included as officialobservers in IASB bodies. The Trustees havemet as a group in Brussels and Washington,D.C., and have held discussions with E.U. andU.S. regulators and policymakers. In 2002, theTrustees and the IASB will meet in Hong Kong,and the IASB will convene in Tokyo in order toengage Asian policymakers and standardsetters. As part of their ordinary activities, theTrustees and the IASB have made presentationsto, conferred with, and testified beforegovernment officials in their regions.

As this activity suggests, there is asubstantial foundation of cooperation uponwhich to build. Moreover, nearly 50 countrieseither accept international standards withoutmodification as national law or use a slightly

modified version of international standards. In2001, an important indication of the potential isthat the European Commission has proposedlegislation to require that all publicly listedcompanies in the European Union must preparefinancial accounts for consolidated statementsaccording to International Financial ReportingStandards (IFRSs, formerly known asInternational Accounting Standards) from 2005.This will bring 6,000 companies under theIASB’s rubric, and as the European Uniongrows, so will the reach of the IASB.

THE WAY FORWARDThe IASB has begun its work program, and isnow addressing many of the emerging issuesfacing accounting today. The process will,inevitably, take time. The controversial issues ofthe day – including fair value accounting, share-based payment, intangible assets, and pensionaccounting – do not permit of easy answers. Inthese and other areas, there are unsettledquestions and lively debate. But during thecourse of 2002, a number of importantdecisions can be expected.

One thing is for certain: not all these IASBdecisions will be universally popular. Althoughwe Trustees are precluded from opining ontechnical accounting issues, we will ensure thatappropriate consultation occurs and that theIASB, with a fair mind and access to the bestthinking, carefully reviews all complexities of thetopics on its work program. The decisions of theIASB cannot be imposed on individualcountries. Rather, after it has conducted acareful consultative process, the aim must be toreach an outcome that will command broadrespect around the world as the legitimateproduct of an independent standard settingprocess.

There is much work to do. We welcomethe support that we have received. The opportunity is significant.

Paul A. VolckerChairman of the Trustees

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IASCF ANNUAL REPORT 2001

T he events of the past year havemade 2001 a watershed in thehistory of global standard-setting. Itwas the year in which the building

blocks for the internationalisation of accountingwere laid down.

2 The International Accounting StandardsBoard (IASB) has been blessed, since itsinception, by the support of governments,regulators and standard-setters worldwide. Forthis support our predecessor body, theInternational Accounting Standards Committee(IASC), must take a great deal of credit. First, in1987 IASC began a study of the comparabilityof financial statements that was the basis for animprovements project. When completed in1993 the project had led to ten revisedstandards, which eliminated many of theoptions previously existing in internationalaccounting standards and improved disclosurerequirements. These steps made internationalaccounting more competitive—whose nationalstandard would be deemed by a neutralinternational committee to best reflect theessence of a particular transaction? Severalnational standards were changed after theviews of the international body became evident.

3 Secondly, in 1995 IASC made anagreement with the International Organization ofSecurities Commissions (IOSCO) that, speakingbroadly, if IASC were to produce acomprehensive core set of standards ofappropriate quality then IOSCO wouldrecommend endorsement of internationalaccounting standards for cross-border capital-raising and listing purposes in all globalmarkets. With such a recommendation,companies using those standards wouldgenerally be able to use financial reports basedon them on stock exchanges worldwide withoutreconciliation to local standards. (As ittranspired, IOSCO did not entirely approveIASC’s core standards when they werecompleted at the end of 1998 but it gave greatencouragement for further work to beundertaken on those standards with a view totheir further improvement.)

4 Thirdly, much of the impetus for thesedevelopments was due to the vision and effortsof the far-sighted and internationally mindedchairmen of IASC, particularly in the 1990s.Building on the excellent preparatory work oftheir predecessors they seized the opportunityof the agreement with IOSCO and steered IASCinto a position where it could be developed asan internationally accepted standard-setter.Special praise must go to IASC’s last fourchairmen—the late Eiichi Shiratori (Japan),Michael Sharpe (Australia), Stig Enevoldsen(Denmark) and Tom Jones (USA)—and the twosecretaries-general during the period—DavidCairns, who was heavily involved in theimprovements project, and Sir Bryan Carsberg,who led the drive on the core standards andlater the restructuring proposals emanatingfrom IASC’s Strategy Working Party.

5 The Strategy Working Party, whoseconclusions became part of the new IASCConstitution, was keen to draw on the work ofthe main national standard-setters (several ofwhom formed the group known as the G4+1—Australia/New Zealand, Canada, the UK and theUSA, plus IASC). Those national standard-setters, together with those of some of theworld’s largest economies—France, Germanyand Japan—were to have direct liaisonrelationships with the new IASB. The intentionwas that the IASB and these standard-setterswould form a partnership, aided by the IASB’sseven liaison members, who would each attendmeetings of their national standard-setter. Viewsfrom the national standard-setter would bepassed to and debated at the IASB; similarly,views from the IASB would be passed to thenational standard-setters. It is intended that theBoard will meet three times a year with thechairmen of the standard-setters with which ithas a liaison relationship. By this means, the riskof the IASB becoming an ivory tower standard-setter cut off from the issues of concern aroundthe world, is remote.

6 The Board is grateful to its partnerstandard-setters for their offers of assistanceand resources and intends to make full use of

IASB CHAIRMAN’S REPORTSupport for a new international standard-setter

Sir David TweedieChairman of the IASB

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these offers. As mentioned below, many of thesubjects that will eventually appear on theBoard’s agenda are at present being researchedby national standard-setters. Other subjectsappearing on the agenda will be undertaken inpartnership with one of the national standard-setters; under this arrangement the boardpapers will be debated by both boards at thesame time.

7 The formation of the Standards AdvisoryCouncil (SAC) has made it possible for otherstandard-setters to become involved in theIASB’s work and the members of the Board arealso very grateful for the support they havereceived from colleagues in other standard-setting bodies throughout the world.

8 Lastly, support for IASB came from twoimportant sources. First, in the United Statesthe Securities and Exchange Commission (SEC)voiced support for the proposed IASB as aglobal standard-setter and this view wasechoed by the Financial Accounting StandardsBoard (FASB). The world’s financial communityhas reason to be grateful to the far-sightedinternational views expressed by Arthur Levittand Lynn Turner, then respectively chairmanand chief accountant of the SEC, and thestatesmanlike approach taken by EdmundJenkins as chairman of the FASB, who alsoadvocated that the G4+1 should cease tooperate once the IASB came into existence.

9 Similar support came from the EuropeanCommission, which, following the decisionstaken by the European Council’s meeting inLisbon, proposed in June 2000 that theconsolidated accounts of all listed companies inthe European Union should be required to beprepared in accordance with the IASB’sstandards by 2005. A fully integrated Europeancapital and financial services market requirescommon accounting standards, and it saysmuch for the international vision of theCommission and its officials, notably JohnMogg, David Wright and Karel Van Hulle, thatthe EU did not attempt to produce a separateset of standards but instead wished to involveEuropean countries in the development of highquality global standards.

GLOBAL STANDARDS10 The Board’s aim is simple. Our mandate isto produce a single set of high quality,understandable and enforceable globalaccounting standards. The Board’s job is to

encourage convergence on these globalstandards. The IASB is not a dictator, it is afacilitator. It cannot insist that national standard-setters or countries adopt its standards; ithopes, however, that even where a nationalstandard-setter believes it has a better answer itwill accept that it will not win every argument.On the other hand, the IASB should beprepared for the national standard-setter, whenaccepting the international standard, to monitorthe new standard’s operation and if, after a fewyears, the national standard-setter still believesthat the international standard is not as good asthe solution it had proposed, for the issue tocome back on the international agenda.

11 It should also be emphasised thatconvergence on high quality standards does notsimply mean copying US generally acceptedaccounting principles (GAAP). It can be saidthat the United States almost certainly has thebest set of accounting standards in the world.However, not all of the individual US standardsare the best worldwide. Where the UnitedStates is a leader in the field the Board wouldhave no hesitation in adopting its standard butwhere it is not the Board will look elsewhere ordevelop its own standard. To convergeinternationally requires change on both sidesand we are gratified that this point is wellaccepted by the FASB.

12 Similarly, the Board is not going to bediverted by the siren call that an internationalstandard must not be more demanding than itsequivalent in the United States—invariably it isclaimed that otherwise those applying a higherquality international standard would be at acompetitive disadvantage. It has to be said thatthe existing high quality US standards havehardly held back US companies over the lastdecade, but if the Board were to heed the sirencall then by definition the Board’s standardscould at best be of equal quality to, or of lowerquality than, those of the United States. That isnot the Board’s mandate. Indeed, if the Boardwere to accept the argument, then by definitionUS standards would overall be of higher qualitythan those of the IASB—in which case theworld would be better off simply adopting USGAAP rather than trying to develop internationalstandards.

13 A similar point is sometimes made in theUnited States itself. On matters where, forexample, there has been a heated debate in theUnited States the IASB has sometimes been

asked by US commentators not to raise theissue once more but to accept the outcome ofthe debate in the United States. On reflection,those proposing that view would, I am sure,agree that such a decision would beunacceptable to the rest of the world. Debateshave to be held internationally if a set ofinternational standards is to be acceptable.

THE INITIAL WORK PROGRAMME14 Much has been achieved in the short timesince the decision was taken to implement therecommendations of the Strategy Review. Thefounder members of the IASB were nominatedby the Trustees of the IASC Foundation inJanuary. At that time, however, the Board hadneither appropriate premises from which tooperate, nor the staff to undertake the vitalresearch required to produce the high-qualityglobal standards demanded by the world’sfinancial community. The Trustees had done anexcellent job in guaranteeing the necessaryfinance and my first task, in conjunction withTom Seidenstein, the Foundation’s director ofoperations, and Kurt Ramin, the Foundation’scommercial director, was to find appropriatepremises. With the help of the Corporation ofLondon, the Foundation acquired the lease ofoffices in 30 Cannon Street and the Boardmoved into its new premises in June.

15 Staff recruitment went on apace, and highlyskilled, experienced staff began to arrive from allover the world in August and September. At thetime of writing, the IASB has 17 technical staff,coming from 10 countries. Many of the staff havepreviously worked for national standard-setters,so, as with the Board members, a great deal ofexperience in dealing with technical problems isnow available at the Board’s headquarters.

16 Although the Board did not officially beginoperating until April it had an informal meeting inFebruary to enable members to meet eachother, to settle meeting dates for the rest of theyear, and to decide which issues should bediscussed at the first formal meetings.

17 The IASC Constitution requires the Board,before setting its agenda, to discuss possibletopics with the SAC. The membership of theSAC was not announced until 25 June, and itmet for the first time in July. By then the Board,having devoted its first three meetings toeducational sessions ranging over possibleagenda items, was in a position to makeproposals to the SAC.

18 As a result of its consultation with the SACthe Board announced its initial agenda of ninetechnical projects at the end of July.

19 The projects chosen amounted to the firststep towards the goal of global standards. Fourprojects provided leadership for convergence,which, of course, is the Board’s primarypurpose, two others were designed to makeexisting standards easier to apply and threemore aimed to improve the basic standards thatthe IASB inherited from its predecessor.

CONVERGENCE PROJECTSBusiness combinations (phase I )20 Accounting for business combinationsdiverges substantially across jurisdictions.Some suggest that this diversity gives certainentities a competitive advantage over others fordeal-making. Whilst most national jurisdictionsand IASC have tightly restricted the scope ofbusiness combinations to be accounted for bymeans of the pooling/merger approach, theUnited States was, until recently, the outlier. Theabolition of pooling accounting in Canada andthe United States in mid-year, however, gave anopportunity to examine whether—given the veryfew combinations that are accounted for usingthe pooling method elsewhere in the world—itwould be advantageous for internationalstandards to come into line with those in NorthAmerica and Australasia by banning poolingaccounting. A related problem was, of course,goodwill accounting: the FASB adopted a pureimpairment approach to goodwill, taking furtherthe approach pioneered by the UK AccountingStandards Board and largely adopted by IASC.

21 In July the Board consulted the SAC, whichobserved that there is widespread support forconvergence on this subject. The Board decidedto add to its agenda a convergence project onbusiness combinations.

22 The project will have two phases. Inbroad terms, phase I seeks to achieve theconvergence of existing standards on thedefinition of a business combination; theappropriate method or methods of accountingfor a business combination; the accounting forgoodwill (and negative goodwill) and intangibleassets acquired in a business combination; thetreatment of liabilities for terminating or reducingthe activities of an acquiree; and the initialmeasurement of the identifiable net assetsacquired in a business combination. The Board

will also consider, as part of phase I, disclosures,transitional provisions, and certain other issuesidentified in the improvements project.

23 Without prejudice to the outcome of itsdeliberations the Board’s tentative view is thatinternational standards should follow the US leadby banning pooling accounting and using animpairment approach for goodwill. As to theimpairment test itself, however, the Board isexploring criteria for more detailed disclosuresabout the estimates used in testing goodwill forimpairment than have been adopted in theUnited States. In addition, the Board hasexamined the practice of making provisions onacquisition in the acquired company for futurereorganisations or losses. In accordance with theFramework the Board’s provisional conclusion isthat where no obligation exists at the time ofacquisition no provision can be made.

24 The Board plans to publish an Exposure Drafton phase I of the project in the first half of 2002.

Insurance contracts25 Insurance is increasingly a global business,yet insurance accounting varies widely. Somejurisdictions give little or no guidance onaccounting for insurance contracts, while othershave requirements that are looking increasinglyarchaic. This project aims to produce an agreedglobal standard on insurance contracts. InNovember the Board started discussing a DraftStatement of Principles (DSOP) prepared by the

IASC’s Insurance Steering Committee. Wehave posted sections of the DSOP on theIASB’s Website as the Steering Committeefinalised them. However, we are not invitingformal comments on the DSOP, as it would beunfair to expect commentators to devote thetime and effort needed for a consideredresponse to a document that the Board has notyet debated in full.

Performance reporting26 The Board is seeking to develop a singlestatement of financial performance that willreplace the existing income statement. Theneed for a robust performance reporting formatis especially important in view of recent andexpected future changes in recognition andmeasurement in the financial statements. Thenew statement will play an important role in theassessment of corporate performance, not leastin the interpretation of volatility in reported data.

27 The Board is developing a set of conceptualprinciples that will guide its thinking on theproject. These principles are designed aroundinvestors’ information needs. They will be usedto help determine the categorisation ofcomponents of reported performance, as wellas the order in which these components arepresented. A related issue, which the Board willalso address, is whether and how managementshould report and highlight performancesubtotals within the overall financialperformance for the year.

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28 The primary focus of the project will be theperformance statement, although the projectremit also includes the closely relatedstatements of cash flow and changes in equity.

29 The IASB is conducting this project inpartnership with the UK Accounting StandardsBoard. The two boards are workingsimultaneously on the project and will issuepronouncements jointly. The project team is alsoworking with the Canadian and US standard-setters, which have added performancereporting projects to their agendas.

Share-based payment30 Share-based payment, whereby an entityacquires goods or services with payment madein shares or share options, is becoming moreprevalent around the world. Share schemes arenow a common feature of employeeremuneration, not just for directors and seniorexecutives, but for many other employees aswell. Some companies issue shares or shareoptions to pay suppliers, such as suppliers ofprofessional services. Very few countries haveaccounting standards on accounting for share-based payment, and many believe that suchstandards as do exist are inadequate oroutdated. There is no existing internationalstandard on how to account for thesetransactions and many commentators, inresponding to proposals published by nationalstandard-setters, have emphasised the need todeal with this topic at an international level.

31 There are three crucial questions inaccounting for share-based payment:

• Should these transactions be recognised inthe financial statements, resulting in therecognition of an expense in the incomestatement when the goods or services areconsumed?

• How should these transactions be measured,ie what measurement basis should beapplied?

• At which date should these transactions bemeasured?

In addition, there are many other issues to beconsidered, particularly concerning themeasurement of transactions involving the issueof share options to employees.

32 In July 2000, IASC and the nationalstandard-setters represented in the G4+1

published a Discussion Paper on accounting forshare-based payment. The Board has takenthat Paper as the first step in its own dueprocess in considering this topic. However, theBoard was concerned that some constituentsmight not have responded to the DiscussionPaper, perhaps not appreciating the growinginternational importance of this topic at thattime. To ensure that it had received commentson the Discussion Paper from all constituentswho wished their views to be considered, theBoard reopened the comment period inSeptember and invited additional comments by15 December.

33 The additional comments received will beconsidered, along with those commentsreceived during the original comment period, inthe development of an Exposure Draft of anInternational Financial Reporting Standard(IFRS). The Board hopes to issue the ExposureDraft for public comment by the end of 2002.

EASIER APPLICATIONOF INTERNATIONAL STANDARDS34 Another set of projects seeks to makeit easier to apply the IASB’s standards.

First-time application of InternationalFinancial Reporting Standards35 In the coming years, entities in manyjurisdictions will adopt International FinancialReporting Standards (IFRSs) for the first time.The problems faced by an entity that adopts anentire accounting regime for the first time aresomewhat different from those faced by anentity that adopts an individual change in anexisting body of accounting standards. Publicaccounting firms and industries in Europe haveexpressed concerns about the complexity ofthis task and the existing guidance on first-timeapplication. The Board is reviewing existingguidance with the aim of developing anapproach that is both workable andconceptually sound. This project is beingcarried out in partnership with the Frenchstandard-setter (the Conseil National de laComptabilité).

Activities of financial institutions:disclosures and presentation36 This project was on the agenda of theBoard’s predecessor and much support for itexists within the Basel Committee on BankingSupervision and among banks throughout theworld. The Board decided to broaden the

project to deal with all entities that carry outfinancial activities rather than simply banks. Theproject will update existing requirements relatedto disclosing information and presentingfinancial statements that reflect the specificcharacteristics of the business activities ofbanks and other institutions whose business isto take deposits, grant credits or provide otherfinancing or investment services.

IMPROVING EXISTING STANDARDS37 The third batch of projects is intended toimprove existing international standards.

Preface to InternationalFinancial Reporting Standards38 The Preface to Statements of InternationalAccounting Standards was last revised in 1982.The Board is proposing to revise the Preface toreflect both the changes in the IASCConstitution and the Board’s decisions aboutthe format and style of future IFRSs. AnExposure Draft of a new Preface was publishedin November, inviting comments by 15 February2002. The Board will of course consider thecomments received and hopes to issue the finaldocument before the middle of the year.

Improvements to existing standards39 The existing corpus of InternationalAccounting Standards (IASs) has beencriticised by many for allowing alternativeaccounting treatments, for ambiguities ofwording and for failing to take account ofparticular issues. These comments have comefrom individual commentators, publicaccounting firms, companies applying IASs,national standard-setters and IOSCO in itsreport on the core set of internationalstandards. IASs are not unique in having thedeficiencies outlined above—most nationalstandard-setters would recognise similarcriticisms of their own standards. Nevertheless,the Board believes that the existinginternational standards could be made moreacceptable to regulators, standard-setters,preparers and auditors worldwide if thecriticisms levelled at them were addressed atthe start of the Board’s operations. Theimprovements project has therefore become acentral part of the Board’s initial work. Apartfrom the Board’s keenness to introduce theimprovements without delay, the timetable isalso being driven by the need to make thechanges in time for listed companies in theEuropean Union to begin their advance

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The Board

From left to right, Back row: James Leisenring, Geoffrey Whittington, Robert Herz, Tatsumi Yamada, Gilbert Gélard, Hans-Georg Bruns, Anthony Cope, Harry Schmid, Robert Garnett, Warren McGregor

Front row: Tricia O’Malley, David Tweedie, Tom Jones, Mary Barth

preparations for the expected mandatoryapplication of IASs and IFRSs from 2005.

40 The improvements project falls into twoparts, which are proceeding in parallel. The firstcovers twelve standards, and the proposedchanges will range from limited amendments toextensive rewriting that will result in a virtuallynew text.

41 The second part of the improvements projectis concerned with the two standards on financialinstruments—IAS 32 Financial Instruments:Disclosure and Presentation and IAS 39 FinancialInstruments: Recognition and Measurement.

42 IAS 39 has been criticised for being acomplex standard with internal inconsistenciesand a lack of clear application guidance. Sinceits appearance, more than 200 questions andanswers have been published on how to applyit. This is quite unsatisfactory. Accordingly, theBoard decided to consider amendments toimprove IAS 39 and to take the opportunity toreview IAS 32 at the same time. The objectiveis to address practice issues identified by auditfirms, standard-setters, regulators and othersand to reduce some of the complexity byclarifying and adding guidance and eliminatinginternal inconsistencies.

43 The Board is not reconsidering thefundamental approach to the accounting forfinancial instruments—that is a huge task thatmust await one or more future projects thatrespond to the fundamental issues raised in thecomments on the draft standard prepared bythe Financial Instruments Joint Working Groupof IASC and nine other standard-setters (theJWG) and published in 2000. One of the JWG’smain proposals was that virtually all financialinstruments should be carried on the balancesheet at fair value. This raises fundamentalconcepts that cannot be confined to aconsideration of financial assets and liabilities.Furthermore, it raises questions aboutappropriate measurement techniques fordetermining fair value when there is an absenceof quoted prices or recent relevant proxytransactions. The Board accepts that IAS 39,with its mixed measurement approach,represents no more than a necessary step alongthe path to reform. Nevertheless, the Boardbelieves that, even within the limitations it faces,it can identify and introduce some importantimprovements that will make it easier for entitiesto apply IAS 39 and produce information thatwill be more helpful to users of the accounts,and find ways of moving towards resolving theunderlying problems that IAS 39 has. The mainthrust of these changes will be

• to clarify the distinction between debt andequity and the accounting for derivativesbased on an entity’s own shares

• to promote greater consistency andclarity in reporting by facilitating greateruse of fair values, and underpinning thischange by providing much fullerguidance.

• to provide guidance to ensure thatimpairment losses present in a group ofloans or other financial assets arerecognised in a timely manner

• to introduce the tough principle of ‘nocontinuing involvement’ to test whetherassets and liabilities can be derecognised.

POSSIBLE FUTURE PROJECTS44 The IASB has identified 16 topics (set out inthe Appendix) as potential agenda items. Theyare at present each being studied by one ormore of the national standard-setters. For sometopics, the work involves analysing commentsreceived on earlier discussion documents. Forothers, the work involves the initial definition ofthe problem, the issues, and possible solutions.The Board expects to consider adding theseprojects to its agenda in the future.

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IASCF ANNUAL REPORT 2001

45 Some projects involve revisiting theBoard’s Framework for the Preparation andPresentation of Financial Statements, forexample, the appropriate basis of measurementof assets and liabilities, the definition ofelements of financial statements, reliability andrevenue recognition. Others will involveconvergence issues where differences existamong national standards, such as thederecognition of assets or liabilities and specialpurpose entities, employee benefits,impairment of assets, intangible assets, incometaxes and revaluations of certain assets (forthose countries that at present allow revaluationof fixed assets). Other topics are likely to berather more industry-specific, such asaccounting by extractive industries oraccounting for leases.

46 A further question for consideration wouldbe expanding the financial reportingrequirements of international standards into thearea of management discussion and analysis(US) or the operating and financial review (UK).

47 The Board will not lack subjects for itsconsideration in the next few years.

Small and medium-sized entities48 It has become clear to the Board that itsstandards have been written primarily for listedcompanies and that many other companiesand entities throughout the world in countrieswhere IASs have been adopted find the presentstandards difficult to implement. The Board isconsidering whether to commission a project toassess the need for special guidance to clarifyfinancial reporting requirements in the contextof financial reports used in emerging economiesor by non-listed enterprises. It is possible thatsuch a project would reduce disclosurerequirements but would maintain measurementand recognition criteria.

CONCLUSION49 At the end of a very hectic year may I thankfirst the Hon Paul Volcker, the chairman of theTrustees, and his colleagues for theirenthusiastic support and help in getting theBoard up and running. Of course I also have tothank them for the splendid choices they havemade in selecting the Board and the SAC. Ninemonths’ experience of working with theindefatigable Tom Jones, the vice-chairman,and my other Board colleagues has confirmedthe Trustees’ judgement in selecting a highlytalented and independent-minded group of

people. The members of the Board have quicklybecome friends and while our debates can befierce and heated, our friendship continuesoutside of the Board meetings. Observers whothought that one country would dominate theBoard’s proceedings and inevitably get its way,or that the chairman would push through hisown views, were badly mistaken—sadly,despite my efforts, in the latter case!

50 The SAC has been invaluable in helping theBoard to shape its initial agenda and in givingadvice not only on various technical matters butalso on strategy, such as whether the Boardshould produce standards for small andmedium-sized enterprises. I am most grateful toPeter Wilmot of South Africa for agreeing totake over as vice-chairman of the Council andchairing the technical parts of the meeting,thereby avoiding any conflict of interest on mypart arising from my position as chairman ofboth the Board and the Council.

51 I should also like to pay tribute to the loyaltyand sheer professionalism of the members ofthe former Standing Interpretations Committee(SIC). They not only managed, under the skilledleadership of Paul Cherry of Canada (nowchairman of the Canadian AccountingStandards Board), to get through an enormousamount of work in the Committee’s last fewmonths but stayed on in office until thereplacement committee was appointedtowards the end of the year. Furthermore theSIC members gave excellent advice on the newmethods of operation of the Committee and theexpansion of its role. We owe a debt ofgratitude to them. We also welcome our newcolleagues on the International FinancialReporting Interpretations Committee and,whilst at the time of writing the new committeehas not yet met, we very much look forward toworking with it in 2002.

52 Thanks are due to the Board’s staff, too.When I first arrived at the offices of IASC inJanuary, I was made most welcome by thestaff, which then consisted of seven technicalprofessionals and twelve publications andsupport staff. I was of course greatly helped inthe early months by the retiring secretary-general, Sir Bryan Carsberg, and while I havepaid tribute to his role in the former IASC,I should like, in addition, to thank him as a friendfor the advice and assistance he gave meduring my early months in the IASC offices andfor his continued assistance over the past year.

53 Given the many changes that were clearlyenvisaged by the changes of the constitution I am very grateful to the staff of the former IASCfor their support and loyalty and theiracceptance of the changes that took place asthe organisation more than doubled in size (fromtwenty to more than fifty) and new workingmethods were introduced to take account of theformation of a full-time Board. The secretaries—Kathryn McArdle, Katherine Maybin, FionaDavitt and Samantha Williams—went out oftheir way to ease me into the role, while thetechnical staff—Peter Clark (senior projectmanager), Martin Faarborg (who has sincereturned to his firm in Denmark at the end of hissecondment), Colin Fleming, Magnus Orrell,Frank Palmer and Rieko Yanou, under theexpert leadership of Jim Saloman—workedhard at completing the remaining IASC projectsand preparing for the new improvements projectthat began in July.

54 Jim deserves special praise and we arecertainly going to miss him when hissecondment ends and he returns toPricewaterhouseCoopers, Canada. He led theIASC staff through the turmoil of the change andwas a great support and source of advicethroughout the year. We are very fortunate inattracting two senior professionals to run thetechnical side of the operation: KevinStevenson, formerly technical partner ofPricewaterhouseCoopers in Australia andformerly director general of the AustralianAccounting Research Foundation, joins us inFebruary 2002 as director of technical activities,much (I suspect) to the relief of Wayne Upton,formerly of the FASB, who joined us in July asdirector of research. Wayne has, in essence,been running, with Jim Saloman’s help, bothjobs. I am sure that after the Herculean effortshe has put in over the last six months he will beglad to share the load.

55 From August and September staff began toarrive from all over the world—

Richard Barker UKMarie-Christine Batt FranceKimberley Crook New ZealandKristin Hazzis USAAnnette Kimmitt AustraliaChristine Lee USAAnne McGeachin UKJim Paul AustraliaGalina Ryltsova RussiaSandra Thompson UK

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IASCF ANNUAL REPORT 2001

This coming year is going to see the initial fruitsof their labours. We expect the proposals on theimprovement projects, including the revision toIASs 32 and 39, to be published in 2002 andthe changes completed by the early part of2003. Other projects we hope to complete arethe Preface (in 2002) and the first-timeapplication of IFRSs (by early 2003). Documentson both business combinations and share-based payment are also scheduled to beproduced.

56 Much of the credit for getting the Board upand running must go to the Foundation’sdirector of operations, the immensely talentedTom Seidenstein from the USA, who spentmuch of the year working with lawyers in ironingout leases, setting up fund-raising facilities andestablishing the Delaware company —the legalform chosen by the Trustees. Michael Butcherhas joined the IASB as editorial director and willshare the administrative load.

57 Kurt Ramin, who was IASC’s commercialdirector and is now serving the Foundation inthe same capacity, not only gave invaluableadvice on the publications side—eagerlysupported by his team—but also vitalassistance in securing the new offices.

58 Finally, I am pleased to say that my formersecretaries, Ailie Burlinson and Jill Robinson,have, to my great delight, come to join me at theIASB. As everyone knows, a superb secretary iswithout price. I am fortunate in having two ofthem who not only are highly efficient but makethe working environment great fun.

December 2001

SUBSEQUENT EVENTSThe IASB has reviewed carefully any publiclyavailable information about the failure of Enron andother entities to see whether there are lessons tobe learned generally for accounting standards. Atthis point none of us knows enough about thespecifics of the transactions, the informationavailable to the auditors, and the judgementsinvolved to form a solid professional conclusion.As we learn more, it is possible we may find thatUS accounting standards should be improved. Ifso, we plan to learn from this case and, with thehelp of the FASB, to make sure that the IASB’sstandards do not have similar problems. We have,of course, seen allegations about non-compliancewith existing standards that seem to have beencritical to the eventual restatement of the financialstatements and we have investigated suggestionsmade by various parties for improvements inaccounting standards.

To the extent that there has been merit in thosesuggestions, we have concluded that they areeither already largely dealt with in existing IASs orthe IASB’s current projects. In a limited numberof cases we have specifically responded tothem. For example, we propose to expand thestandards relating to accounting policies torequire disclosure of the principal judgmentsexercised in applying an accounting policy. Inaddition, we have asked IFRIC to review SIC 12Consolidation – Special Purpose Entities, whichalready requires consolidation of controlledspecial purpose entities, to see whether thereare any perceived deficiencies with it in practice.In the area of related party transactions we havedecided to require disclosure of outstandingbalances with key management personnel.

There is a series of very important IASB projectsalready in progress, some in partnership withnational standard-setters, which containinitiatives that are aimed at improvingtransparency in financial reporting in the broadareas identified with the Enron debate and withother reported failures. These include:

1 Business combinations (IAS 22)and consolidation (IAS 27):We are seeking to clarify how the control basisfor consolidation works and to removeopportunities for entities to avoid consolidatingcontrolled entities.

2 Financial instruments (IAS 32 and IAS 39):(a) We are clarifying the distinction between

debt and equity for the myriad of

transactions involving derivatives based onan entity’s own equity and in certain othersituations.

(b) We are introducing the tough principle of‘no continuing involvement’ as a means oftesting whether derecognition of financialassets and liabilities can take place.

(c) We are improving disclosures about:

• the extent to which valuations used inreporting are based upon estimatesthat are not supported by observablemarket prices;

• the sensitivity of estimated fair valuesto changes in assumptions; and

• the consequences for the incomestatement of changes in estimates offair value.

(d) We are facilitating greater use of fair valuesfor financial assets and liabilities to achievegreater meaning and consistency inreporting.

(e) We are providing greater guidance on howto determine fair values, with particularemphasis on the use of objective quotedprices and prices determined by referenceto recent market transactions.

3 Performance reportingWe are developing a framework for displayinginformation in a manner that will better enableusers to understand the implications of financialstatement items when assessing performance.

4 Share-based paymentWe are working towards a comprehensive stan-dard to deal consistently with all transactions inwhich an entity uses its equity to pay for goodsor services. This includes the vexed area ofshare-based compensation.

Sir David TweedieChairman of the IASB

Patrick Rochet, Director General of AFEP, & David Tweedie

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(A) CONCEPTUALFRAMEWORK PROJECTSDefinitions of elementsof financial statementsThe project would explore similarities anddifferences between the definitions of theelements (assets, liabilities, equity, revenues,expenses, gains and losses) in the existingconceptual frameworks of the IASB andnational standard-setters to determinewhether there are differences that areimpediments to convergence.

Liabilities and revenue recognitionThis heading includes three potential projectsthat are grouped here because of thesignificant relationship between the issues ineach. The first project would explore thedistinction between liabilities and equity. Thesecond would explore liability recognition,including the need for more robust guidanceon whether an item meets the definition of aliability and, if so, under what circumstances itshould be recognised in the financialstatements. The third project would seek toestablish workable general principles as abasis for determining when revenue should berecognised in the financial statements.

MeasurementThis project would seek to resolve issuesrelated to selection of the appropriatemeasurements of items recognised in thefinancial statements. The likely outcome wouldbe an amendment or expansion of thediscussion of measurement in the Frameworkfor the Preparation and Presentation ofFinancial Statements.

(B) CONVERGENCE PROJECTSBusiness combinations, Phase IIThe objective of the project would be todevelop a single standard to secure theconvergence of the approaches in variousexisting standards on the accountingprocedures for business combinations. Itwould encompass issues such as purchaseprice allocation, liability and asset recognitionat the date of combination, contingentconsideration, planned restructurings,transactions involving entities under commoncontrol, formations of joint ventures, minorityinterests, and ‘new basis’ issues. The projectwould result in the amendment of IAS 22 orthe issue of an IFRS with guidance tosupplement IAS 22. Another group of issuesinvolve questions broadly described asbusiness combination or consolidation‘procedures’ and would be considered ineither this project or a separate stage of aconsolidations project.

Consolidation policyThe objectives of the project would be toreconfirm the basis upon which an entityshould consolidate its investments and toprovide more rigorous guidance around theconcept of ‘control’. Most standard-setters(including the IASB) have identified control asthe appropriate basis for consolidation;however, there appear to be differences in theway ‘control’ is interpreted in deciding whetherconsolidation is required. The end-productwould probably amend or supplement IAS 27Consolidated Financial Statements andAccounting for Investments in Subsidiaries.

Derecognition issues,other than those addressed in IAS 39Derecognition refers to the removal of an assetor liability (or a portion of them) from an entity’sbalance sheet. Derecognition questions canarise on all types of assets and liabilities andoften arise in connection with off balance sheetfinancing schemes. Derecognition questionsalso arise when considering certain specialpurpose entities and whether they should beincluded in a set of consolidated financialstatements.

Employee benefitsThe project would examine the accountingliterature of various jurisdictions to identifydifferences in accounting for employeebenefits (including retirement benefits).

Impairment of assetsThe project would examine a limited number ofissues addressed in existing standards onimpairment in various jurisdictions to arrive at acommon resolution. Issues might include theuse of impairment triggers, the definition ofimpairment; and reversals of impairmentlosses. A final product on this project would belikely to amend IAS 36 Impairment of Assets.

Intangible assetsThe project would seek to develop aconsistent approach to recognition andmeasurement of intangible assets, includingpurchased and internally generated intangibleassets not related to a business combination.Although many support the approach taken inIAS 38 Intangible Assets, many are alsoconcerned that the guidance in IAS 38 is notadequately robust. The project would result inan amendment to or replacement of IAS 38.

Revaluations of certain assetsThis project would seek the convergence ofthe various approaches in different jurisdictionsto accounting for revaluations of assets. Itwould aim to ensure that whenever andwherever revaluations are permitted they are

measured and reported consistently and in acomparable manner.

Taxes on incomeThe project would examine the accountingliterature of various jurisdictions and identifythe differences in accounting for income taxes.

(C) INDUSTRY-SPECIFIC PROJECTSExtractive industriesThe extractive industries (mining and oil andgas production) are an important economicsector in many economies and few jurisdictionshave standards on the subject. This projectwould seek to develop an internationallyacceptable approach to resolving accountingissues in the extractive industries.

(D) LEADERSHIP PROJECTSFinancial instruments -a comprehensive projectUnder IAS 39, some financial assets andliabilities are measured at cost, while othersare measured at fair value. The IAS 39 ‘mixed-attribute’ measurement model leads to arange of difficulties and complexities, and thisproject could consider moving towards a fairvalue model for the measurement of virtually allfinancial instruments, as proposed by the JointWorking Group. The result would be an IFRSto replace all or most of IAS 39 and,perhaps, amend IAS 32 Financial Instruments:Disclosure and Presentation.

LeasesLeasing is a global business, and differences inaccounting standards are an impediment tocomparability. The project would seek toimprove the accounting for leases bydeveloping an approach that is moreconsistent with the Framework’s definitions ofassets and liabilities. It would result in anamendment or replacement of IAS 17 Leases.

(E) EXPANSION OF THE SCOPE OF IFRSsManagement’s discussion and analysisThis project would explore whether the IASBshould provide guidance on the presentationof information outside the financial statementsand in the form of management’s explanationof the entity’s financial condition, changes infinancial condition, results of operations, andcauses of changes in material line items.

Small and medium-sized entitiesand entities in emerging economiesThe project would assess whether specialguidance should be issued to clarify financialreporting requirements in the context offinancial reports used in emerging economiesor for certain types of entity.

POTENTIAL AGENDA ITEMS

APPENDIX

12

REPORT OF THEINDEPENDENT AUDITORSTo the Trustees of the International Accounting

Standards Committee Foundation

We have audited the financialstatements of the InternationalAccounting Standards CommitteeFoundation (IASCF) for the year

ended 31 December 2001 on pages 13 to 16which have been prepared under the accountingpolicies set out on page 15.

RESPECTIVE RESPONSIBILITIESOF TRUSTEES AND AUDITORSThe Trustees are responsible for preparing thefinancial statements in accordance with theIASCF's Constitution and InternationalAccounting Standards.

Our responsibility is to audit the financialstatements in accordance with United KingdomAuditing Standards.

We report to you our opinion as to whether thefinancial statements give a true and fair viewand are properly prepared in accordance withInternational Accounting Standards. We alsoreport to you if, in our opinion, the Report of theChairman of the Trustees and the IASBChairman’s Report are not consistent with thefinancial statements.

BASIS OF AUDIT OPINIONWe conducted our audit in accordance withUnited Kingdom Auditing Standards issued bythe Auditing Practices Board. An audit includesexamination, on a test basis, of evidencerelevant to the amounts and disclosures in the

financial statements. It also includes anassessment of the significant estimates andjudgements made by the Trustees in thepreparation of the financial statements, and ofwhether the accounting policies are appropriateto the IASCF's circumstances, consistentlyapplied and adequately disclosed.

We planned and performed our audit so as toobtain all the information and explanationswhich we considered necessary in order toprovide us with sufficient evidence to givereasonable assurance that the financialstatements are free from material misstatement,whether caused by fraud or other irregularity orerror. In forming our opinion we also evaluatedthe overall adequacy of the presentation ofinformation in the financial statements.

OPINIONIn our opinion the financial statements give atrue and fair view of the state of the IASCF'saffairs as at 31 December 2001 and of itsincrease in net assets in the year then ended.

BDO STOY HAYWARDChartered Accountantsand Registered AuditorsLondon.

IASCF ANNUAL REPORT 2001

13

STATEMENT OF ACTIVITIESYears ended 31 December 2001 2000

Notes £’000 £’000

OPERATING REVENUESContributions 3 12,830 929Other income 54 23

12,884 952

Subscription and publications sales 4 1,966 1,704Less direct cost of sales 675 593

1,291 1,111

Total operating revenues 14,175 2,063

OPERATING EXPENSESSalaries, wages and benefits 5 5,267 1,236Accommodation 6 856 185Board meetings 595 311Committees 331 425Recruitment and relocation costs 296 126External relations 269 145Legal and taxation advice 164 7Fundraising 145 175Office services 106 45Communications 70 49Losses on exchange 62 -Other costs 254 30

Total operating expenses 8,415 2,734

TRUSTEES’ COSTSFees 7 318 220Meeting expenses 7 90 145

408 365

Total expenses 8,823 3,099

OPERATING REVENUES IN EXCESS OF (LESS THAN) EXPENSES 5,352 1,036

Interest income 206 173Less United Kingdom Corporation Tax 8 41 35

165 138

INCREASE (DECREASE) IN NET ASSETS 5,517 898Net assets at beginning of year 1,063 1,961NET ASSETS AT END OF YEAR 6,580 1,063

ANNUAL REPORT 2001

The notes on pages 15 and 16 form part of these financial statements.

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14

STATEMENT OF FINANCIAL POSITIONat 31 December 2001 2001 2000

Notes £’000 £’000

ASSETSNon-current assetsLeasehold property, leasehold

improvements, furniture & equipment 9 945 124

Current assetsCash at bank and in hand 10 6,486 2,624Contributions receivable 12 614 -Accounts receivable 185 79Prepaid expenses 170 73

7,455 2,776

TOTAL ASSETS 8,400 2,900

LIABILITIESNon-current liabilitiesPublications revenue received more than one year

in advance and other non-current liabilities - 49

Current liabilitiesContributions received in advance 12 - 217Publications revenue received in advance 400 367Trade payables 481 277Accrued expenses and sundry creditors 898 892Current tax liabilities 8 41 35

1,820 1,788

TOTAL LIABILITIES 1,820 1,837

NET ASSETS 6,580 1,063

CASH FLOW STATEMENTYears ended 31 December 2001 2000

Notes £’000 £’000

OPERATING ACTIVITIESContributions 12 11,717 1,078Cash receipts from customers 1,941 1,687Other receipts 145 137Cash paid to suppliers and employees:

Operating expenses 7,971 2,926Publications direct expenses 680 615Trustees’ costs 7 490 59

Net cash from operating activities 4,662 698

INVESTING ACTIVITIESInterest received 200 173Taxes on interest income paid 35 29Purchase of furniture and equipment 324 38Leasehold property and leasehold improvements 641 -

Net cash from investing activities 800 106

NET INCREASE/(DECREASE) 3,862 592IN CASH AND CASH EQUIVALENTSCash and cash equivalents at beginning of period 2,624 3,216CASH AND CASH EQUIVALENTSAT THE END OF THE PERIOD 10 6,486 2,624

The notes on pages 15 and 16 form part of these financial statements.

ANNUAL REPORT 2001

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1. LEGAL FORM, OBJECTIVES AND RESTRUCTURINGThe International Accounting Standards Committee Foundation (IASCF)is a not-for-profit corporation, which was incorporated in the state ofDelaware, USA on 6 February 2001 to continue the work of itspredecessor body, the International Accounting Standards Committee.

The objectives of the IASCF are:(a) to develop, in the public interest, a single set of high quality,

understandable and enforceable global accounting standards thatrequire high quality, transparent and comparable information infinancial statements and other financial reporting to helpparticipants in the world’s capital markets and other users makeeconomic decisions;

(b) to promote the use and rigorous application of those standards; and

(c) to bring about convergence of national accounting standards andInternational Accounting Standards to high quality solutions.

The IASCF has two main bodies, the Trustees and the InternationalAccounting Standards Board (the Board), as well as a StandingInterpretations Committee and Standards Advisory Council. TheTrustees appoint the Board members and related bodies, exerciseoversight and raise the funds needed, whereas the Board has soleresponsibility for setting accounting standards.

The 2001 financial statements reflect the fact that members of theIASB did not begin full-time work for the restructured organisation until6 April 2001, while members of the predecessor Board were volunteersand were not remunerated. The organisation continued to hireadditional staff throughout the year. At the same time, the Trusteesraised funds on the basis of a complete calendar year of operation tocover costs associated with the reorganisation and establishing thenew headquarters and to provide confidence that the IASCF wouldhave sufficient funds to operate in future years.

2. ACCOUNTING POLICIES(a) Basis of preparation

The financial statements are prepared under the historical costconvention and in accordance with International AccountingStandards. The classification and presentation of certain items hasbeen changed in 2001, to reflect changes in the scale of operationsas a result of the restructuring.

(b) RevenueContributions are recognised as revenue in the year designated bythe contributor.

(c) DepreciationLeasehold property and leasehold improvements are depreciatedon a straight-line basis over the period of the lease.

Furniture and equipment are depreciated on a straight-line basisover the estimated useful life of the asset. The annual rate appliedis 20 per cent of cost for all assets except computer equipment,which is depreciated at 33 1/3 per cent of cost.

(d) Foreign currency transactionsTransactions denominated in currencies other than sterling arerecorded at the exchange rate at the date of the transaction.Monetary assets and liabilities are translated into sterling at theexchange rate at the year-end.

(e) Subscriptions and publications salesSubscriptions and licence fees are recognised as revenue on astraight-line basis over the period covered by the subscriptions andfees. Royalties are recognised as revenue on an accrual basis.

Publications direct cost of sales comprises printing costs and otherdirect costs including publications department salaries, promotion,

and computer costs. Other costs of preparing standards, includingcosts of Board meetings, Steering Committees, SIC, Boardmembers and technical staff, have not been attributed topublications.

(f) Operating leases - office accommodationLease payments for office accommodation are recognised as anexpense on a straight-line basis over the non-cancellable term ofthe lease.

3. CONTRIBUTIONSThe IASCF Trustees asked contributors to make five-year pledges.Many of the contributors agreed to five-year pledges, while othersmade pledges for three years or agreed to make only a 2001 payment.The Trustees have received written pledges of the following amounts forfuture years.

Year Total Pledges Year Total Pledges

2002 £10,852,000 2004 £10,647,0002003 £10,852,000 2005 £10,647,000

The pledges were made primarily in US dollars, which have beentranslated at the financial year-end rate of US $1.4554 to £1.

4. SUBSCRIPTIONS AND PUBLICATIONS SALES

2001 2000£’000 £’000

Sales of subscriptions & publications 1,390 1,256Royalties & permission fees 576 448

1,966 1,704

5. EMPLOYEESIASC/IASCF had an average of 36 employees (including Boardmembers and interns) during 2001 (2000: 21). At the year-end, theIASCF had 48 employees.

2001 2000£’000 £’000

Staff costs, including Board members 5,267 1,236Staff costs included in publications direct expenses 260 174Staff costs included in agriculture project expenses 7 60

Total staff costs 5,534 1,470Staff costs include employer’s contributions

to defined contribution pension plans 76 19

6. ACCOMMODATIONIn 2001 the IASCF entered into an operating lease for officeaccommodation at 30 Cannon Street, London, that expires inSeptember 2008. In 2006 future rents will be adjusted to then currentmarket rates, if higher.

IASC entered into operating leases in 1991 for officeaccommodation at 167 Fleet Street, London and, in 1997, at 166 FleetStreet, London. Both leases are held by the Institute of CharteredAccountants in England and Wales on behalf of the IASCF and expirein June 2002 and September 2002 respectively. The office at 166 FleetStreet is still being used by the IASCF. The office at 167 Fleet Street wassublet to a third party in 1999.

The IASCF has rented office space at 610 Fifth Avenue, New York,NY, USA. The only obligation incurred in this regard relates to paymentof ongoing expenditures and a provision of 90 days’ notice oftermination.

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NOTES TO THE FINANCIAL STATEMENTSfor the year ended 31 December 2001

16

Payments on the leases, excluding service charges and propertyrates (currently approximately 50 per cent of the lease payments) aredue as follows:

Due Date Payments SubleaseReceipts

2001 2000 2001 2000£’000 £’000 £’000 £’000

2001 - 155 - 722002 637 93 34 342003 544 - - -2004 544 - - -2005 544 - - -2006 544 - - -2007 544 - - -2008 408 - - -

3,765 248 34 106

7. TRUSTEES’ COSTSThe Trustees took office immediately following approval of the newConstitution by the IASC members on 24 May 2000 and held their firstmeeting in June 2000.

The Trustees are remunerated with annual and meeting fees andare reimbursed for the expenses of their travel on IASCF business.

8. UNITED KINGDOM CORPORATION TAXInterest income is subject to United Kingdom Corporation Tax at a rateof 20 per cent. It is not expected that any tax charges will arise inrespect of the other activities of the IASCF.

9. LEASEHOLD PROPERTY, LEASEHOLD IMPROVEMENTS,FURNITURE AND EQUIPMENT

Leasehold Leasehold Furniture, 2001 2000Property Improvements Equipment total total

£’000 £’000 £’000 £’000 £’000

CostAt 1 Jan 2001 48 261 223 532 495Additions 54 599 325 978 37Disposals - - 6 6 -

At 31 Dec 2001 102 860 542 1,504 532

DepreciationAt 1 Jan 2001 40 206 162 408 340Charge for the year 9 79 69 157 68Disposals - - 6 6 -

At 31 Dec 2001 49 285 225 559 408

Net carrying amountAt 31 Dec 2001 53 575 317 945

At 31 Dec 2000 8 55 61 124

10. FINANCIAL ASSETS AND FINANCIAL LIABILITIESFinancial instruments comprise cash at bank and in hand, accountsreceivable, trade payables and accrued expenses and sundry creditors.Cash at bank and in hand comprises the following:

Effectiveinterest rate

2001 2000 2001 2000£’000 £’000 % %

Bank sterling deposits dueafter 7 days, within one month 5,600 2,150 3.62 5.56

Bank sterling deposits duewithin 7 days - 150 - 3.75

Cash and bank depositsdue on demand:

Sterling in London 254 98 0.80 2.70US dollars in London 399 226 0.10 2.50

US dollars in New York 233 - 0.00 -

6,486 2,624

All cash at bank is held by Barclays Bank PLC, London, exceptfor one United States dollar account held by Barclays Bank PLC inNew York.

All other financial assets and liabilities are non-interest bearing anddue on demand.

The fair value of financial instruments at 31 December did not differsignificantly from their carrying amounts.

11. RISK MANAGEMENT STRATEGYDuring the year 2001 contributions were mainly received in US dollars,which were promptly converted into UK Sterling to minimise theexchange rate risk.

At the October 2001 Trustees meeting, the IASC Foundationdetermined that it should invest its surplus funds in a combination of UKgovernment gilts and high quality bonds of international organisationsand undertake forward transactions for 2002 and a collar hedgingstrategy for 2003 to eliminate exchange rate risk going forward. Thispolicy was put into effect early in February 2002.

12. FUNDING CONTRIBUTIONS 2001 IN ADVANCETwo contributions received late in 2000, for the specific use of therestructured IASC in 2001, were recognised as a liability at the end of2000. Contributions received in January 2002, specifically designatedby the contributor for 2001, were recognised as revenue in 2001.

13. APPROVAL OF FINANCIAL STATEMENTSThese financial statements were approved by the Trustees of the IASCFon 5 March 2002.

ANNUAL REPORT 2001

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17

TRUSTEES

IASCF ANNUAL REPORT 2001

NAME AND AFFILIATION TERM EXPIRES

PAUL A. VOLCKER, Chairman 31/12/2002Former Chairman,U.S. Federal Reserve BoardUnited States of America

ROY ANDERSEN 31/12/2003Deputy Chairman and Group ChiefExecutive, The Liberty Group LimitedSouth Africa

JOHN H. BIGGS 31/12/2004Chairman, President and ChiefExecutive Officer, TIAA-CREFUnited States of America

ANDREW CROCKETT 31/12/2004General Manager,Bank for International Settlements;Chairman, Financial Stability ForumInternational Organisation

ROBERTO TEIXEIRA DA COSTA 31/12/2004First Chairman, Brazilian Securitiesand Exchange Commission-CVMBrazil

GUIDO A. FERRARINI 31/12/2004Professor of Law, University of GenoaItaly

L. YVES FORTIER 31/12/2003Chairman, Ogilvy Renault, Barristersand Solicitors; Former Ambassadorof Canada to the United NationsCanada

TOSHIKATSU FUKUMA 31/12/2002Former Chief Financial Officer,Mitsui & Co., LtdJapan

CORNELIUS HERKSTRÖTER 31/12/2003Former President, Royal Dutch Petroleum,and Chairman of the Committee Of ManagingDirectors of the Royal Dutch/Shell GroupThe Netherlands

HILMAR KOPPER 31/12/2002Chairman of the Supervisory Board,Deutsche Bank AGGermany

NAME AND AFFILIATION TERM EXPIRES

PHILIP A. LASKAWY 31/12/2003Former Chairman,Ernst & Young InternationalUnited States of America

CHARLES YEH KWONG LEE 31/12/2002Chairman, Hong Kong Exchangesand Clearing LtdHong Kong

SIR SYDNEY LIPWORTH 31/12/2002Former Chairman,U.K. Financial Reporting CouncilUnited Kingdom

DIDIER PINEAU-VALENCIENNE 31/12/2003Honorary Chairman,Schneider ElectricFrance

JENS RØDER 31/12/2004Senior Partner,PricewaterhouseCoopersDenmark

DAVID S. RUDER 31/12/2002Professor of Law, NorthwesternUniversity; Former Chairman,U.S. Securities and Exchange CommissionUnited States of America

KENNETH H. SPENCER 31/12/2004Former Chairman, AustralianAccounting Standards BoardAustralia

WILLIAM C. STEERE, JR. 31/12/2002Chairman of the Board Emeritus,Pfizer IncUnited States of America

KOJI TAJIKA 31/12/2004Former Chairman,Deloitte Touche TohmatsuJapan

IASCF ANNUAL REPORT 2001

18

JUNICHI AKIYAMA JapanProfessor, Tama University

YVES BERNHEIM FrancePartner, Mazars & Guerard

MARY KEEGAN United KingdomChairman, UK Accounting Standards Board

DOMINGO M MARCHESE ArgentinaPartner, Marchese, Grandi, Mesón & Asoc

HARRY K. SCHMID SwitzerlandFormer Senior Vice President, Nestlé

WIENAND SCHRUFF GermanyPartner, KPMG

JOHN T. SMITH United StatesPartner, Deloitte & Touche

KEVIN STEVENSON AustraliaPartner, Stevenson McGregor

LEO VAN DER TAS The NetherlandsPartner, Ernst & Young

PATRICIA WALTERS United StatesSenior Vice President, Association for InvestmentManagement and Research

PAUL CHERRY, Chairman CanadaChair, Canadian Accounting Standards Board

OFFICIAL OBSERVERSEuropean CommissionThe International Organization of Securities

Commissions

JUNICHI AKIYAMA Term Expires 30/6/2003

Professor, Tama University Japan

PHIL AMEEN Term Expires 30/6/2005

Vice President and Comptroller,General Electric Company United States

CHRISTIAN CHIARASINI Term Expires 30/6/2004

Partner, Andersen France

CLAUDIO DE CONTO Term Expires 30/6/2005

General Manager Administration and Control,Pirelli S.p.A Italy

CLEMENT K. M. KWOK Term Expires 30/6/2005

Managing Director and Chief Executive Officer,Hong Kong and Shanghai Hotels Limited

Hong Kong, China

WAYNE LONERGAN Term Expires 30/6/2005

Managing Director, Lonergan Edwards &Associates Limited Australia

DOMINGO M. MARCHESE Term Expires 30/6/2005

Partner, Marchese, Grandi, Mesón & Asoc.Argentina

JOHN T. SMITH Term Expires 30/6/2003

Partner, Deloitte & Touche United States

MARY TOKAR Term Expires 30/6/2004

Partner, IAS Advisory Services,KPMG International United States

LEO VAN DER TAS Term Expires 30/6/2003

Partner, Ernst & Young The Netherlands

PATRICIA WALTERS Term Expires 30/6/2003

Senior Vice President, Association for InvestmentManagement and Research United States

IAN WRIGHT Term Expires 30/6/2004

Partner, PricewaterhouseCoopersUnited Kingdom

NON-VOTING CHAIRMANKEVIN STEVENSONDirector of Technical Activities,International Accounting Standards Board

OFFICIAL OBSERVERSEuropean CommissionThe International Organization of Securities

Commissions

INTERNATIONAL FINANCIAL REPORTING INTERPRETATIONS COMMITTEE (IFRIC) terms began 6 December 2001

STANDING INTERPRETATIONS COMMITTEE (SIC) IN 2001

SIR DAVID TWEEDIE, Chairman Term Expires 30/6/2006

Before joining the IASB, he served as the first full-time Chairman of the UKASB, 1990-2000.

THOMAS E. JONES, Vice-Chairman Term Expires 30/6/2004

Formerly Principal Financial Officer of Citicorp and last Chairman of the IASCBoard. He spent most of his professional career in Belgium, France, Italyand the USA.

MARY E. BARTH Term Expires 30/6/2004

Professor of Accounting at the Graduate School of Business at StanfordUniversity, she is one of the IASB’s two part-time members.

HANS-GEORG BRUNS Term Expires 30/6/2006

Liaison to German Standard-Setter. Formerly Chief Accounting Officer forDaimlerChrysler. He was head of a working group of the German ASB.

ANTHONY T. COPE Term Expires 30/6/2004

Before joining the IASB, he served as a member of the US FASB. Hepreviously worked as a financial analyst in the USA for 30 years, ultimatelybecoming Director of Fixed Income Research, Wellington Management Co,in Boston.

ROBERT P. GARNETT Term Expires 30/6/2005

Formerly Executive Vice President of Finance for Anglo American plc, aSouth African company listed on the London Stock Exchange, he hasworked as a preparer and analyst of financial statements throughout hiscareer.

GILBERT GÉLARD Term Expires 30/6/2005

Liaison to French Standard-Setter. Formerly a partner at KPMG, he hasextensive experience with French industry, including as a Deputy CFO withGroupe Hachette 1973 –1982 and Deputy Group Comptroller with ElfAquitaine 1982–1987.

ROBERT H. HERZ Term Expires 30/6/2005

A partner at PricewaterhouseCoopers, he is responsible for technical andprofessional matters in the USA and the Americas and is now one of theIASB’s two part-time members.

JAMES J. LEISENRING Term Expires 30/6/2005

Liaison to US Standard-Setter. Formerly Vice Chairman and, mostrecently, Director of International Activities of the US FASB. He has workedon issues related to accounting standard-setting over the last threedecades.

WARREN McGREGOR Term Expires 30/6/2006

Liaison to Australian/New Zealand Standard-Setters. He worked onstandard-setting for over 20 years at the Australian Accounting ResearchFoundation, where he ultimately became the Chief Executive Officer.

PATRICIA L. O’MALLEY Term Expires 30/6/2004

Liaison to Canadian Standard-Setter. Before joining the IASB, she servedas Chair of the ASB of Canada, and was previously Technical Partner atKPMG Canada.

HARRY K. SCHMID Term Expires 30/6/2005

Formerly Senior Vice President of Nestlé, responsible for corporatereporting. He has over 40 years’ experience as a preparer of financialstatements in Switzerland and Latin America.

GEOFFREY WHITTINGTON Term Expires 30/6/2006

Liaison to UK Standard-Setter. He was the PricewaterhouseCoopersProfessor of Financial Accounting at Cambridge University and formerlyserved as a member of the UK Monopolies and Mergers Commission.Before joining the IASB, he was a member of the UK ASB.

TATSUMI YAMADA Term Expires 30/6/2006

Liaison to Japanese Standard-Setter. He was previously a partner atChuoAoyama Audit Corporation (a member firm ofPricewaterhouseCoopers) in Tokyo.

INTERNATIONAL ACCOUNTING STANDARDS BOARD

IASCF ANNUAL REPORT 2001

AFRICANDUNG’U GATHINJI, Chief Executive Officer,Eastern Central and Southern AfricanFederation of Accountants (ECSAFA), Kenya

PETER WILMOT, Chairman, AccountingPractices Board, South Africa; retired Chairmanof Deloitte & Touche, South Africa

ASIA, excluding JapanRAJA ARSHAD-UDA, Chairman, MalaysianAccounting Standards Board, Malaysia;Executive Chairman, PricewaterhouseCoopers,Malaysia

MARVIN CHEUNG, Chairman and ChiefExecutive Officer, KPMG, China and Hong Kong

FENG SHUPING, Secretary General, ChinaAccounting Standards Committee

KIM IL-SUP, Chairman, Korean AccountingStandards Board

YEZDI MALEGAM, Managing Partner,S.B. Billimoria & Co., India

REYAZ MIHULAR, Chairman, Sri LankanAccounting Standards Committee; Partner,KPMG Ford Rhodes Thornton & Co., Sri Lanka

AUSTRALIA/NEW ZEALANDIAN BALL, Professor of Accounting andPublic Policy, Victoria University of Wellington,New Zealand; Member, Accounting StandardsReview Board

PETER DAY, Executive General Managerof Finance, AMCOR, Australia

CENTRAL AND EASTERN EUROPELARISSA GORBATOVA, IAS ProjectCoordinator, Centre for Capital MarketsDevelopment; Chairman, Financial ReportingCouncil, Russia

RITA ILISSON, Technical Director ofAccounting, Deloitte & Touche, Estonia;former Chairman, Estonian AccountingStandards Board

EUROPEAN UNIONJEANNOT BLANCHET, Managing Partner,Global Professional Standards Group,Andersen, France

DAVID DAMANT, Sword Management Ltd.,United Kingdom

PHILIPPE DANJOU, Chief Accountant,Commission des Opérationsde Bourse, France

STIG ENEVOLDSEN, Partner and NationalTechnical Director, Deloitte & Touche, Denmark;Chairman of Deloitte & Touche’s InternationalAccounting Standards Policy Committee

DOUGLAS FLINT, Group Finance Director,HSBC Holdings plc, United Kingdom

ALBERTO GIUSSANI, Partner,PricewaterhouseCoopers Spa, Italy

SIGVARD HEURLIN, Partner, ÖhrlingsPricewaterhouseCoopers, Sweden

BENOIT JASPAR, Project Supervisor,Generali, Belgium

JEAN KELLER, General Delegate of ACTEO;Member of the Supervisory Board of EFRAG(European Financial Reporting AccountingGroup); Member of the Board of Directorsof Lafarge, France

CARMELO DE LAS MORENAS, ChiefFinancial Officer, REPSOL YPF Group, Spain

JOCHEN PAPE, Partner and TechnicalDirector International Financial Reporting,PricewaterhouseCoopers, Germany;Chairman of PwC Global IAS Board

MAIJA TORKKO, Senior Vice President,Corporate Controller, Nokia Corporation,Finland

WILLEM VAN DER LOOS, Retired VicePresident, Corporate Control, Philips BV,The Netherlands

JAPANEIKO TSUJIYAMA, Professor of Accounting,Musashi University; Member, AccountingStandards Board, Japan

YOSHIKI YAGI, Executive Vice President,Hitachi, Ltd., Japan

LATIN AMERICANELSON CARVALHO, Professor, Universidadede São Paulo, Brazil; Partner, NCV Consulting(M&A and Capital Markets), and Chairman,Central and South Americas Area, InternationalAssociation of Financial Executives Institutes –IAFEI

HECTOR ESTRUGA, Audit Managing PracticeDirector for Latin America, Andersen,Argentina

RAFAEL GOMEZ ENG, Northeast RegionalDirector, KPMG, Mexico

MIDDLE EASTADIR INBAR, Chairman of the ProfessionalBoard, Institute of Certified Public Accountantsin Israel; Partner, Deloitte & Touche, Israel

RIFAAT AHMED ABDEL KARIM, Secretary-General, Accounting and Auditing Organizationfor Islamic Financial Institutions (AAOIFI),Bahrain

UNITED STATES AND CANADAMICHAEL CONWAY, Partner, KPMG LLP,United States

GERALD EDWARDS, Jr., Associate Directorand Chief Accountant - Supervision, FederalReserve Board, United States

TREVOR HARRIS, Managing Director, EquityResearch, Morgan Stanley, United States

PHILIP LIVINGSTON, President and ChiefExecutive Officer, Financial ExecutivesInternational, United States

PATRICIA McCONNELL, Senior ManagingDirector, Bear, Stearns & Co. Inc., United States

PAUL McCROSSAN, Retired Partner, EcklerPartners; Past-President, International ActuarialAssociation, Canada

GABRIELLE NAPOLITANO, ManagingDirector, Global Investment Research,The Goldman Sachs Group, Inc., United States

DAVID SHEDLARZ, Executive Vice Presidentand Chief Financial Officer, Pfizer Inc.,United States

KEITH SHERIN, Senior Vice President-Finance& Chief Financial Officer, General ElectricCompany, United States

DAVID SIDWELL, Chief Financial Officer,Investment Bank, JP Morgan Chase & Co.,United States

NORMAN STRAUSS, Former National Directorof Accounting, Ernst & Young, United States;Ernst & Young Executive Professor inResidence at Baruch College, NYC,United States

INTERNATIONAL ORGANISATIONSTHE WORLD BANKFAYEZUL CHOUDHURY,Vice President and Controller

INTERNATIONAL MONETARY FUNDARNE PETERSEN, Chief, Financial Institutionsand Markets Division, Monetary and ExchangeAffairs Department

IFAC PUBLIC SECTOR COMMITTEEIAN MACKINTOSH, Chairman,IFAC Public Sector Committee

IOSCORAFAEL SANCHEZ DE LA PEÑA, Chief of thePolicy Division, Comision Nacional del Mercadode Valores, Spain

JOHN CARCHRAE, Chief Accountant,Ontario Securities Commission

BASEL COMMITTEEON BANKING SUPERVISION

ARNOLD SCHILDER, Executive Director,De Nederlandsche Bank, The Netherlands

OFFICIAL OBSERVERSEUROPEAN COMMISSION

FINANCIAL SERVICES AGENCY,GOVERNMENT OF JAPAN

U.S. SECURITIES AND EXCHANGECOMMISSION

STANDARDS ADVISORY COUNCIL Terms of three years from June 2001

19

20

IASCF ANNUAL REPORT 2001

IASCF SUPPORTERS AND UNDERWRITERS

ACCOUNTING FIRMS ($1,000,000 pa)AndersenDeloitte Touche TohmatsuErnst & YoungKPMGPricewaterhouseCoopers

UNDERWRITER COMPANIES* Allianz AGAmvescapAventisBanco Bradesco S/ABanco Itau S/ABank of America CorporationBASF AGBayer AGBear, Stearns & Co. Inc.BMW AGBP p.l.cCitigroup Inc.DaimlerChrysler AGDeutsche Bank AGE.ON AGFortis SA/NVThe Goldman Sachs Group, Inc.HSBC Holdings plcING Group NVJ.P. Morgan Chase & Co.Lehman Brothers Inc.Merrill Lynch & Co., Inc.Nestlé SAL’Oréal Pfizer, Inc.Prudential Financial, Inc.Royal Dutch/Shell GroupRoyal Philips Electronics NVRWE AGSiemens AGState Farm Insurance CompaniesTelecom Italia S.p.A.TIAA-CREFTotal Fina Elf S.A.UBS AG

SUPPORTERSAbbott LaboratoriesABN Amro Bank N.V.Aegon Group N.V.AlcatelAmerican International Group, Inc.Anglo American plcAsahi & Co.Assicurazioni Generali S.p.A.AstraZeneca plcAXAThe Bank of Nova ScotiaBarloworld LimitedBilliton plcThe Boeing CompanyBombardier IncBristol-Myers Squibb CompanyBritish Telecommunications plcCanonCemex Century Ota Showa & Co.CGNU plcChuo Aoyama Audit CorporationCommerzbank AGCompanhia Brasileira de DistribuçãoCompanhia Vale do Rio DoceDeutsche Telekom AGDresdner Bank AG

E.I. Du Pont de Nemours and CompanyEuronext NVExxon Mobil CorporationFIAT S.p.A.Fujitsu LtdGeneral Electric CompanyGlaxoSmithKline plcHitachi, LtdHonda Motor Co., LtdHong Kong Exchanges and Clearing LtdHypoVereinsbank (HVB Group) AGIBM CorporationInvestec plcITOCHU CorporationIto-Yokado Co., LtdJohnson & JohnsonKansai Electric Power Co., Inc.Komatsu LtdLegal & General Group plcLondon Stock Exchange plcMarubeni CorporationMatsushita Electric Industrial Co., LtdMellon Financial CorporationMerck & Co., Inc.Mitsubishi Chemical CorporationMitsubishi CorporationMitsubishi Electric Corp.Mitsubishi Estate Co., LtdMitsubishi Heavy Industries, LtdMitsui & Co.Mitsui Fudosan Co.Montedison SpaMorgan Stanley Dean Witter & Co.Munich ReNASD RegulationNEC CorporationNew York Stock Exchange, Inc.Nippon Paper Industries Co., LtdNippon Steel CorporationNippon Telegraph & Telephone Corp. Group Nissan Motor Co., LtdNortel Networks CorporationORIX CorporationOsaka Securities Exchange Co., LtdPetróleo Brasileiro S.A.Pharmacia CorporationPirelli S.p.A.Power Corporation of CanadaPrudential plcRoyal Ahold NVRoyal Bank of CanadaRuhrgas AGSchering AGShiseido Co., LtdSouth African Breweries plcState Street CorporationSumitomo Chemical Co., LtdSumitomo CorporationSumitomo Electric Industries, LtdSwiss Reinsurance CompanyTakeda Chemical Industries, LtdTD Bank Financial GroupThyssenKrupp AGTohmatsu & Co.Tokyo Electric Power CompanyTokyo Gas Co., LtdTokyo Stock ExchangeToray Industries, Inc.The Toronto Stock Exchange Inc.Toshiba CorporationToyota Motor CorporationUnibanco

Unilever NVVodafone Group PlcVolkswagen AG

CENTRAL BANKS& GOVERNMENT ENTITIESBanca d’ItaliaBanco de EspañaBanco de MexicoBank Negara MalaysiaBank of CanadaBank of EnglandBank of GreeceBank of JapanThe Bank of KoreaCentral Bank of the Russian FederationCorporation of LondonCzech National BankDeutsche BundesbankEuropean Central BankHong Kong Monetary AuthorityMonetary Authority of SingaporeNational Bank of HungaryNational Bank of PolandNational Bank of SlovakiaDe Nederlandsche BankOesterreichische NationalbankOffice of the Superintendent of Financial

Institutions CanadaReserve Bank of AustraliaReserve Bank of IndiaSaudi Arabian Monetary AgencySouth African Reserve BankSwiss National BankUS Federal Reserve System

INTERNATIONAL ORGANISATIONSBank for International SettlementsInter-American Development Bank International Bank for Reconstruction

and DevelopmentInternational Monetary Fund

ASSOCIATIONSFranceACTEO (Association pour la participation des

entreprises françaises à l’harmonisation comptableinternationale)

JapanJapan Securities Dealers AssociationJapanese Institute of Certified Public

AccountantsKeidanrenLife Insurance Association of JapanMarine & Fire Insurance Association of JapanSecurity Analysts Association of JapanTokyo Bankers AssociationTrust Companies Association of Japan

USAAIMR (Association for Investment Management

and Research)

The Business RoundtableFinancial Executives International

* Underwriter companies provided five-yearpledges ranging from $100,000 to $200,000per year.

Note: This list excludes two organisations,contributing in aggregate $60,000 (0.3% of thetotal), which preferred to remain unnamed.

CONTACT DETAILS

VISIT OUR WEBSITE AND WEBSTORE FOR ONLINE PUBLICATION SALES AND UP-TO -DATE NEWS

visit: www.iasb.org.uk

BOARD MEMBERS AND SENIOR STAFFAT 30 CANNON STREETTelephone +44 (020) 7246 6410

IASB ChairmanSir David Tweedie dtweedie@iasb.org.uk

Vice-ChairmanTom Jones tjones@iasb.org.uk

BOARD MEMBERSMary Barth mbarth@iasb.org.ukHans-Georg Bruns hbruns@iasb.org.ukAnthony Cope tcope@iasb.org.ukRobert Garnett rgarnett@iasb.org.ukGilbert Gélard ggelard@iasb.org.ukRobert Herz rherz@iasb.org.ukJames Leisenring jleisenring@iasb.org.ukWarren McGregor wmcgregor@iasb.org.ukTricia O’Malley tomalley@iasb.org.ukHarry Schmid hschmid@iasb.org.ukGeoffrey Whittington gwhittington@iasb.org.ukTatsumi Yamada tyamada@iasb.org.uk

SENIOR TECHNICAL STAFFDirector of Technical ActivitiesKevin Stevenson020 7246 6460 kstevenson@iasb.org.uk

Director of ResearchWayne Upton020 7246 6449 wupton@iasb.org.uk

Editorial DirectorMichael Butcher020 7246 6461 mbutcher@iasb.org.uk

IASC FOUNDATION OFFICERSDirector of OperationsThomas Seidenstein020 7246 6450 tseidenstein@iasb.org.uk

Commercial DirectorKurt Ramin020 7246 6440 kramin@iasb.org.uk

LOCATION

The offices of the IASC Foundation and theInternational Accounting Standards Board arelocated on the first floor at 30 Cannon Street,London. The building occupies an island sitebetween Cannon Street and Queen Victoria Streetin the heart of the City of London.

How to find usThe nearest Underground stations are MansionHouse (Circle and District lines) and St Paul’s(Central line). The nearest railway stations areBlackfriars and Cannon Street.

IASCF AND IASB CONTACT NUMBERS

G R E S H A MS T R E E T

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THREADNEEDLE STREET

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N E W G A T E S T

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GuildhallTower

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C A N N O N S T R E E T

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For further information about the IASB, copies of International Financial Reporting Standards, International AccountingStandards, Exposure Drafts and other publications, including details of IASB subscription services, please contact ourPublications Department on Tel: +44 (020) 7427 5927 or email: publications@iasb.org.ukIASB Publications Department, 7th Floor, 166 Fleet Street, London EC4A 2DY, United Kingdom

International Accounting Standards Committee Foundation, 30 Cannon Street, London EC4M 6XH, United KingdomTelephone: +44 (020) 7246 6410 Fax: +44 (020) 7246 6411 email: iasb@iasb.org.uk Web: www.iasb.org.uk

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