An Executive Guide to IFRS: Content, Costs and Benefits to Business

The enhancement phase

Most of the IASC Secretaries had been secondments from other organizations, but in 1985 the IASC appointed a permanent Secretary General, David Cairns. Cairns was a practitioner and academic who had long taken an interest in international accounting, and he set about making a number of reforms. A key issue was that the organization was starved of funds, which were contributed by the member bodies. The structure of the profession in different countries is significantly different. Rich countries such as France, Italy and Germany have restrictive approaches to membership, which meant that the professional associations had relatively few members and little funding available to develop the IASC. However, they were also unwilling to let countries like the US and UK, with much more extensive and therefore wealthier professional organizations, make extra contributions. The IASC’s activities were severely constrained by lack of funds.

Cairns noted that the IASC made no money from publishing its standards – the right to publish them was held by the parent national professional associations. He negotiated the right for the IASC itself to publish and sell its work, and released eventually a flow of funding that to this day makes a significant contribution to the organization’s funding (the 2009 financial statements show a £5.6m/$8.6m/€6.7m net contribution from publishing).

The new Secretary General also recognized that the IASC style of standard-setting by volunteer ...