The Trustees arrange the majority of the organisation’s operations to be funded through a number of national financing regimes. These funding efforts are guided by four principles:

• Broad-based: A sustainable long-term financing system must expand the base of support to include major participants in the world’s capital markets, including official institutions, in order to ensure diversity of sources.

• Compelling: A system must carry with it enough pressure to make free riding very difficult. This may be accomplished through various means, including official support from the relevant regulatory authorities and formal approval by the collecting organisations.

• Open-ended: The financial commitments should be open-ended and not contingent on any particular action that would infringe on the independence of the IASC Foundation and the IASB. This should include sustained support from official international organisations, central banks and the major accounting firms.

• Country-specific: The funding burden should be shared by the major economies of the world on a proportionate basis, using GDP as the determining measure. Each country or jurisdiction should meet its designated target in a manner consistent with the principles above. Trustees should be assigned to specific countries to assist in the development of the funding scheme.

Because of the success of the Trustee funding initiative, a growing number of national levies, payments and broad-based regimes are now in place. The overall increase in contributions is due both in part to the establishment of those regimes and the increase during the year of the strengthening US dollar exchange rate relative to sterling. In 2009 the IASC Foundation received funds of £16,584,000 in contributions (2008: £12,747,000).

Contributions received before 31 December 2009, amounting to £49,000 (2008: £225,000), which were specifically designated by the contributors for use by the IASC Foundation in subsequent years, were recognised as current and non-current liabilities, depending upon the designation by the contributor. Contributions received or confirmed after 31 December 2009, amounting to a total of £1,068,000 (2008: £334,000) specifically designated by the contributors for use by the IASC Foundation in 2009 were recognised as revenues at the end of 2009 and included as contributions receivable.

A number of countries have recently implemented or will be introducing funding regimes in 2010. Using the IASC Foundation’s website, the Trustees are informing interested parties of their progress on establishing broad-based funding regimes throughout the world.

	2009		2008
	£’000		£’000
Sales of subscriptions and publications	3,751		4,411
Royalties and permission fees	1,640		1,120
Other related activities	263		950
Total	5,654		6,481

	2009		2008
	£’000		£’000
Staff/employee related costs	1,527		1,486
Cost of goods sold	475		433
Depreciation	26		37
Other costs	1,232		1,180
Total	3,260		3,136

The IASC Foundation had an average of 114 employees (including IASB members and interns) during 2009 (2008: 101).

	2009	2009	2008	2008
	£’000	£’000	£’000	£’000
Staff costs, including IASB members’ salaries and other costs	12,854		10,252
Contributions to defined contribution pension plans	652		533
Other costs	103		77
		13,609		10,862
Staff costs included in publications direct expenses (see note 4)
Salaries and other costs	1,437		1,366
Contributions to defined contribution pension plans	84		92
Other costs	6		28
		1,527		1,486
Total		15,136		12,348

The Trustee Remuneration Committee is responsible for reviewing, bench-marking and making recommendations on salary and benefit levels. These recommendations are reviewed and approved annually by the Trustee’s. As a number of the IASB members work outside the United Kingdom and therefore carry different employment tax burdens, the Trustees agree upon an annual remuneration budget for each of the IASB members inclusive of all employer contributions for tax and benefits. In 2009, the total cost for the 15 (2008: 13) IASB members’ salaries, including all applicable employment taxes and benefits, and relocation costs of new IASB members, amounted to £5,878,000 (2008: £4,728,000). In March 2009, effective for April 2009, the Trustees approved the following remuneration budgets: £493,990 per year for the IASB Chair (2008: £476,900), £401,370 per year for full-time members (2008: £389,680) and £200,310 per year for part-time members (2008: £194,840).

The Trustees are remunerated by annual and meeting fees and are reimbursed for the expenses of their travel on IASC Foundation business. In 2009 the annual fee for the Chair of the Trustees was £75,000 (2008: £75,000). In 2009, the Chair waived his fee and it was counted as a contribution. The annual fee for the other Trustees was £12,500 (2008: £12,500). Trustees received an attendance fee of £1,000 (2008: £1,000) for each formal meeting.

	2009		2008
Meeting Type	£’000		£’000
IASB	935		828
Trustees	359		294
IFRS Interpretations Committee and IFRS Advisory Council	314		351
Financial Crisis Advisory Group	218		-
Other advisory meetings	446		445
Travel for other consultation and liaison	560		506
Total	2,832		2,424

	2009		2008
	£’000		£’000
Rent	700		730
Service charges	205		192
Rates, insurance and energy	438		373
Depreciation	150		202
Other	29		23
	1,522		1,520
Less amounts included in publications costs	(237)		(218)
Total	1,285		1,302

2009		Leasehold improvements		Furniture,equipment		2009Total
Cost		£’000		£’000		£’000
At 1 January 200 9		1,028		815		1,843
Additions		-		258		258
Disposals/retirements		-		-		-
At 31 December 2009		1,028		1,073		2,101
Depreciation
At 1 January 2009		708		651		1,359
Charge for the year		34		115		149
Disposals/retirements		-		-		-
At 31 December 2009		742		766		1,508
Net carrying amount at 31 December 2009		286		307		593

2008		Leasehold improvements		Furniture,equipment		2008Total
Cost		£’000		£’000		£’000
At 1 January 2008		838		771		1,609
Additions		190		67		257
Disposals/retirements		-		(23)		(23)
At 31 December 2008		1,028		815		1,843
Depreciation
At 1 January 2008		598		583		1,181
Charge for the year		110		91		201
Disposals/retirements		-		(23)		(23)
At 31 December 2008		708		651		1,359
Net carrying amount at 31 December 2008		320		164		484

At the reporting date the IASC Foundation had no capital commitments (2008: £nil).

The IASC Foundation has made a provision for reinstatement which covers the cost of reinstating the building when the lease expires in September 2018. The estimated amount and timing of any outflow are subject to options to extend the lease. The corresponding property asset is amortised over the period of the lease.

	2009		2008
	£’000		£’000
Balance at 1 January	413		202
Provision made in year	-		211
Balance at 31December	413		413

Lease commitments relate to operating leases for office space with lease terms expiring in September 2018, and with options to extend for a further 10 years. All operating lease contracts contain market review clauses. Payments on the leases, excluding service charges and property rates, are as follows:

	2009		2008
Payments	£’000		£’000
Within one year	778		400
In two to five years	3,113		3,113
More than five years	2,916		3,694
Total	6,807		7,207

Since 2001 the IASC Foundation has rented office space at 610 Fifth Avenue, New York, NY, USA. The only obligation incurred in this regard relates to payment of ongoing rent and a provision of 90 days’ notice of termination.

	2009		2008
	£’000		£’000
Communication	499		376
Audit, legal and taxation fees	138		118
External relations	252		229
Recruitment	346		126
Fundraising	-		36
Other	229		221
Total	1,464		1,106

10. Financial instruments

The IASC Foundation receives contributions in a number of currencies but its expenditures are largely sterling based. This exposes the organisation to financial risks. The IASC Foundation also faces risks associated with its use of financial instruments. This note describes the organisation’s objectives, policies and processes for managing those risks and the methods used to measure them.

There have been no substantive changes in the organisation’s exposure to financial instrument risks, its objectives, policies and processes for managing those risks or the methods used to measure them from previous periods.

The principal financial instruments used by the IASC Foundation, from which financial instrument risk arises, are as follows:

• Bonds

• Derivative instruments - forward currency contracts

• Trade and other receivables

• Cash and cash equivalents

• Trade and other payables.

(a) Cash and cash equivalents

Liquidity risk associated with cash and bond holdings

The IASC Foundation manages its working capital to ensure sufficient cash resources are maintained to meet short-term liabilities. The IASC Foundation has no bank borrowings.

Cash holdings: Management seeks to keep an amount in cash equal to or exceeding the upcoming quarter’s expenditure. Cash is held either on current or on short-term deposits at floating rates of interest determined by the relevant bank’s prevailing base rate. Part of the cash at bank is held in euro and US dollar accounts. Cash at bank to pay for general operations in London is held by Barclays Bank PLC, London. A US dollar account, used to pay most US dollar expenses, is held by Barclays Bank PLC in New York. Other deposits and balances required from time to time to cover hedging obligations and for investment purposes are held in accounts with Barclays Bank (Suisse) S.A in Geneva. All decisions regarding the Geneva accounts are managed by the Trustees of the IASC Foundation.

Interest income on cash deposits amounted to £56,000 (2008: £218,000). Due to the relatively short durations and levels of cash deposits and returns, interest rate risk is not considered significant.

	2009		2008	2009	2008
	£’000		£’000	%	%
Cash and bank deposits due after 15 days in Geneva
Bank sterling deposits due within 45 days	2,145		2,440	0.45	2.20
Bank dollar deposits due within 90 days	-		2,055	-	0.85
Cash and bank deposits due on demand
Sterling	358		1,389	0.05	0.45
Euro	28		183	-	-
US dollar	592		580	-	-
Total	3,123		6,647

(b) Bonds

Bond holdings: The Trustees have invested surplus funds of the IASC Foundation in sterling-denominated, fixed rate notes of the UK government and international organisations with an AAA rating. Funds are divided into relatively equal sums with maturities in each of the next five years.

The IASC Foundation manages and receives information on its investments in bonds on a fair value basis. Information is provided on that basis to the Trustees and key management personnel. Bonds are carried at fair value through profit or loss, based on quoted prices in active markets (described as level 1 by IFRS 7). The maturity of the bonds is as follows:

	Nominal value	Nominal value	Fair value	Fair value
	2009	2008	2009	2008
	£’000	£’000	£’000	£’000
Less than one year	1,504	1,343	1,528	1,375
Total current	1,504	1,343	1,528	1,375
More than one year and less than two years	1,189	1,503	1,237	1,582
More than two years and less than three years	3,286	2,489	3,446	2,624
More than three and less than four years	706	2,011	706	2,073
More than four and less than five years	672	-	666	-
Total non-current	5,853	6,003	6,055	6,279
Total	7,357	7,346	7,583	7,654

Bonds provide a yield in the range of 1.0% to 3.0% per year.

(c) Trade and other receivables

Credit risk

In addition to its financing programme, the IASC Foundation supplements its funding through publications and related activities. For publications and subscriptions sales the IASC Foundation does not offer credit. For licensing and royalty arrangements some credit risk arises. However the organisation works largely with major publishers and accounting bodies, with whom it has long-standing relationships, and therefore the IASC Foundation does not credit check these customers before it enters into business with them.

The IASC Foundation has no significant exposure to large or key customers: its largest customer does not exceed 3 per cent of the IASC Foundation’s revenues. The maximum exposure to credit risk is considered to be the trade receivable balance at the year-end; other financial assets in the financial statements, such as contributions receivable, are generally realised in full.

	2009		2008
	£‘000		£‘000
Not yet due	804		541
Past due but not impaired	106		99
Total	910		640

Where past due accounts are still unpaid six months or more after invoice date and the IASC Foundation considers the amount impaired it provides for the amount as a bad debt provision in the financial statements. At 31 December 2009 the amount provided for was £20,000 (2008: £25,000).

(d) Currency risk

The IASC Foundation’s expenses arise largely in sterling, whereas the organisation has received funding and future financing commitments in US dollars and euros. The Trustees have implemented a strategy to mitigate the foreign exchange fluctuations and timing risks connected with the various funding regimes. The IASC Foundation generally forward sells approximately 90 per cent of its net US dollar contributions and 50 per cent of its net euro contributions to fix a sterling equivalent. Foreign currency is sold forward on a two year rolling basis.

Details of these forward contracts are set out in the table below.

Forward contracts US dollar		2009				2008
	Buy	Sell			Buy	Sell
	£’000	$’000	Weighted AverageRate		£’000	$’000	Weighted AverageRate
2009	-	-	-		6,151	11,791	1.917
2010	7,166	11,791	1.645		3,613	6,551	1.813
2011	4,009	6,550	1.634		-	-	-
Total	11,175	18,341	1.641		9,764	18,342	1.878

Forward contracts euro		2009				2008
	Buy	Sell			Buy	Sell
	£’000	€’ 000	Weighted AverageRate		£’000	€’ 000	Weighted AverageRate
2009	-	-	-		1,792	2,250	1.255
2010	1,800	2,250	1.250		1,800	2,250	1.250
Total	1,800	2,250	1.250		3,592	4,500	1.253

The ranges of rates for the US dollar are 1.4741 – 1.8170 (2008: 1.8060 - 1.9970) and the euro 1.250 (2008: 1.250 - 1.255).

The following changes to fair value are reported in the Statement of Comprehensive Income.

Income (Charge) in Statement of Comprehensive Income	2009		2008
	£’000		£’000
Forward foreign exchange contracts	3,047		(3,277)
Bonds	(81)		300
Changes in fair value of financial instruments	2,966		(2,977)

Below are the fair values of these contracts, based on quoted prices in active markets (described as level 1 by IFRS 7), as reported in the Statement of Financial Position.

	Fair value 2009		Fair value 2008
	£’000		£’000
Derivatives
Forward contracts expiring end of each calendar quarter of 2009	-		(2,287)
Forward contracts expiring end of each calendar quarter of 2010	(355)		(1,208)
Forward contracts expiring end of each calendar quarter of 2011	(93)		-
Total	(448)		(3,495)

(e) Foreign Currency Sensitivity

	Forward Sales		£Weakens 10%		£ Strengthens 10%
	£’000		£’000		£’000
US dollar	18,341
Profit and loss effect (before tax)			(1,269)		1,038
Euro	2,250
Profit and loss effect (before tax)			(222)		182
Total			(1,491)		1,220

	CashHolding		£Weakens 10%		£ Strengthens 10%
	£’000		£’000		£’000
US dollar	970
Profit and loss effect (before tax)			65		(53)
Euro	31
Profit and loss effect (before tax)			3		(3)
Total			68		(56)

11. Taxation

For US tax purposes, the IASC Foundation is classified as a not-for-profit, tax-exempt organisation.

In 2006 the IASC Foundation reached an agreement with the UK authorities regarding the status of taxation on its publications and related revenues. In 2009 the taxation credit is calculated on this basis, and is estimated to be £60,000 (2008: a charge of £60,000). On the basis of activity for 2009 and from previous years, at the end of 2009 the IASC Foundation is carrying forward a loss for UK tax purposes of £957,000 (2008: £201,000).

Consistent with IAS 12 Income Taxes, the IASC Foundation does not recognise this loss as a deferred tax asset, because of the uncertainty of being able to utilise these losses in the future.

	2009		2008
	£’000		£’000
Net assets at the beginning of the reporting period	9,084		10,831
Comprehensive income in the year net of tax	647		(1,747)
Net assets at the end of the reporting period	9,731		9,084

13. Inventories

Inventory of books amount to £138,000 (2008: £77,000).