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KPMG SA
Geneva, 4 April 2012
Ref. PHP/CF
International Federation of Red Cross
and Red Crescent Societies, Geneva
Independent Auditors’ Report
Consolidated Financial Statements 2011
ABCD
KPMG AG/SA, a Swiss corporation, is a subsidiary of KPMG Holding AG/SA, which is a
subsidiary of KPMG Europe LLP and a member of the KPMG network of independent
firms affiliated with KPMG International Cooperative (“KPMG International”), a Swiss
legal entity.
Member of the Swiss Institute
of Certified Accountants and Tax Consultants
KPMG SA
Audit
111, rue de Lyon P.O. Box 347 Telephone +41 22 704 15 15
CH-1203 Geneva 1211 Geneva 13 Fax +41 22 347 73 13
Internet www.kpmg.ch
Independent Auditor’s Report
International Federation of Red Cross and Red Crescent Societies, Geneva
We have audited the accompanying consolidated financial statements of the International
Federation of Red Cross and Red Crescent Societies (“the Federation”), which comprise the
consolidated statement of financial position as at 31 December 2011, the consolidated
statements of comprehensive income, changes in reserves and cash flows for the year then
ended, and notes, comprising a summary of significant accounting policies and other
explanatory information.
Management’s Responsibility for the Consolidated Financial Statements
Management is responsible for the preparation and fair presentation of these consolidated
financial statements in accordance with International Financial Reporting Standards, and for
such internal control as management determines is necessary to enable the preparation of
consolidated financial statements that are free from material misstatement, whether due to
fraud or error.
Auditors’ Responsibility
Our responsibility is to express an opinion on these consolidated financial statements based
on our audit. We conducted our audit in accordance with International Standards on Auditing.
Those standards require that we comply with relevant ethical requirements and plan and
perform the audit to obtain reasonable assurance whether the consolidated financial
statements are free of material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and
disclosures in the consolidated financial statements. The procedures selected depend on our
judgment, including the assessment of the risks of material misstatement of the consolidated
financial statements, whether due to fraud or error. In making those risk assessments, we
consider internal control relevant to the entity’s preparation and fair presentation of the
consolidated financial statements in order to design audit procedures that are appropriate in
the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the
entity’s internal control. An audit also includes evaluating the appropriateness of accounting
principles used and the reasonableness of accounting estimates made by management, as well
as evaluating the overall presentation of the consolidated financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a
basis for our opinion.
ABCD International Federation of Red Cross and Red Crescent Societies, Geneva
Independent Auditor’s Report
Opinion
In our opinion, the consolidated financial statements give a true and fair view of the
consolidated financial position of the Federation as at 31 December 2011, and of its
consolidated financial performance and its consolidated cash flows for the year then ended in
accordance with International Financial Reporting Standards.
KPMG SA
Pierre Henri Pingeon Christine Fox
Auditor in Charge
Geneva, 4 April 2012
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
CONSOLIDATED STATEMENT OF FINANCIAL POSITION
AS AT 31 DECEMBER
Page 1
The notes on pages 5 to 36 are an integral part of these consolidated financial statements.
2011 2010
ASSETS Note CHF 000s CHF 000s
Current Assets
Cash and cash equivalents 5 156,012 128,825
Short-term investments 6 60,000 160,000
Financial assets at fair value through profit or loss 7 92,182 97,733
Accounts receivable, net 8 97,651 106,632
Other receivables 9 4,080 4,287
Prepayments and accrued income 10 3,083 1,220
Inventories, net 11 3,700 1,811
Total Current Assets 416,708 500,508
Non-Current Assets
Accounts receivable, net 8 8,039 8,384
Property, net 12.1 1,798 3,330
Vehicles, net 12.2 26,612 24,323
Other equipment 12.3 2,228 1,363
Intangible assets, net 12.4 1,890 2,818
Retirement benefit asset 26 - 2,762
Total Non-Current Assets 40,567 42,980
Total ASSETS 457,275 543,488
LIABILITIES AND RESERVES
Current Liabilities
Accounts payable 13 11,597 22,551
Accrued expenses 14 10,879 13,518
Employee benefit liabilities 15 4,470 4,073
Provisions 16 19,274 21,226
Deferred income and prepaid contributions 17 43,514 44,483
Total Current Liabilities 89,734 105,851
Non-Current Liabilities
Retirement benefit obligation 26 1,760 -
Deferred income 17 6,798 3,408
Total Non-Current Liabilities 8,558 3,408
Total LIABILITIES 98,292 109,259
RESTRICTED RESERVES
Funds held for field operations 18 293,071 365,800
Total RESTRICTED RESERVES 293,071 365,800
UNRESTRICTED RESERVES
Designated Reserves 19
Self-insurance 1,317 1,175
Statutory meetings - 1,140
Actuarial valuations - 2,762
Specific projects - 829
Total Designated Reserves 1,317 5,906
Other Unrestricted Reserves
Retained surplus 64,595 62,523
Total UNRESTRICTED RESERVES 65,912 68,429
Total RESERVES 358,983 434,229
Total LIABILITIES and RESERVES 457,275 543,488
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
CONSOLIDATED STATEMENT OF COMPREHENSIVE INCOME
FOR THE YEAR ENDED 31 DECEMBER
Page 2
There were no discontinued operations and no other comprehensive income during the year.
The notes on pages 5 to 36 are an integral part of these consolidated financial statements.
Unrestricted Restricted Total Total
2011 2011 2011 2010
CONTINUING OPERATIONS Note CHF 000s CHF 000s CHF 000s CHF 000s
CONTRIBUTIONS
Statutory contributions 38,004 - 38,004 36,102
Voluntary contributions, net 20 8,042 283,130 291,172 501,301
Contribution to other organisation reimbursed 21 - - - 7,036
Total CONTRIBUTIONS 46,046 283,130 329,176 544,439
SERVICES INCOME 22 3 30,348 30,351 48,462
OTHER INCOME 23 613 3,012 3,625 3,536
Total INCOME 46,662 316,490 363,152 596,437
OPERATING EXPENDITURE
Employee benefits 25 50,759 102,727 153,486 154,260
Relief supplies - 102,400 102,400 174,642
Transportation and storage 62 18,586 18,648 36,843
Equipment 775 8,221 8,996 9,725
Travel 2,933 9,206 12,139 13,543
Communications 1,032 4,072 5,104 5,502
Workshops & training 650 16,084 16,734 23,682
Information 1,692 6,703 8,395 8,802
Legal, professional and consultancy fees 3,034 12,640 15,674 16,329
Administration, office and general 4,785 10,390 15,175 16,258
Depreciation and amortisation 27 3,678 5,300 8,978 5,777
Voluntary contributions reimbursed to donors 18 - 24,601 24,601 5,153
Write offs and provisions for outstanding
pledges and national society receivables 394 ( 653) ( 259) ( 348)
Provision for unpaid statutory contributions 1,052 - 1,052 ( 158)
Provisions for operations 28 ( 6) ( 3,750) ( 3,756) 977
Contributions to national societies 28 91 50,059 50,150 31,745
Contributions to other organisations 740 641 1,381 3,855
Total OPERATING EXPENDITURE 71,671 367,227 438,898 506,587
OTHER EXPENDITURE
Programme and services support recovery 32 ( 19,876) 19,876 - -
Other indirect cost recovery, net 33 ( 2,701) 2,701 - -
Project deficit provision and write off 16 771 ( 937) ( 166) ( 1,273)
Total OTHER EXPENDITURE ( 21,806) 21,640 ( 166) ( 1,273)
RESULT BEFORE FINANCING ACTIVITIES ( 3,203) ( 72,377) ( 75,580) 91,123
FINANCE INCOME, NET
Finance income 29 3,478 ( 190) 3,288 1,521
Finance expense 29 ( 1,957) ( 997) ( 2,954) ( 6,876)
NET FINANCE INCOME/(EXPENSE) 1,521 ( 1,187) 334 ( 5,355)
RESULT AND TOTAL COMPREHENSIVE
(LOSS)/INCOME FOR THE YEAR ( 1,682) ( 73,564) ( 75,246) 85,768
Attributable to:
Restricted reserves - ( 73,564) ( 73,564) 84,555
Unrestricted reserves ( 1,682) - ( 1,682) 1,213
( 1,682) ( 73,564) ( 75,246) 85,768
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
CONSOLIDATED STATEMENT OF CHANGES IN RESERVES
FOR THE YEAR ENDED 31 DECEMBER
Page 3
The notes on pages 5 to 36 are an integral part of these consolidated financial statements.
Restricted Total
Funds held for
field operations
Designated
reserves Other
CHF 000s CHF 000s CHF 000s CHF 000s
2011
Balance at 1 January 365,800 5,906 62,523 434,229
Transfers to/from reserves
Decrease in field operations with
temporary deficit financing 1,062 - - 1,062
Decrease in donor-restricted contributions
for specific operations ( 74,626) - - ( 74,626)
Unrestricted deficit for the year - - ( 1,682) ( 1,682)
Result and total comprehensive loss for the
year ( 73,564) - ( 1,682) ( 75,246)
Used during the year 829 ( 6,033) 5,204 -
Allocations during the year 6 1,444 ( 1,450) -
Balance at 31 December 293,071 1,317 64,595 358,983
Restricted Total
Funds held for
field operations
Designated
reserves Other
CHF 000s CHF 000s CHF 000s CHF 000s
2010
Balance at 1 January 280,984 6,436 61,041 348,461
Transfers relating to prior years 261 - ( 261) -
Transfers to/from reserves
Increase in field operations with temporary
deficit financing ( 1,573) - - ( 1,573)
Increase in donor-restricted contributions
for specific operations 86,128 - - 86,128
Unrestricted surplus for the year - - 1,213 1,213
Result and total comprehensive income for
the year 84,555 - 1,213 85,768
Used during the year - ( 1,902) 1,902 -
Allocations during the year - 1,372 ( 1,372) -
Balance at 31 December 365,800 5,906 62,523 434,229
Unrestricted
Unrestricted
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
CONSOLIDATED STATEMENT OF CASH FLOWS
FOR THE YEAR ENDED 31 DECEMBER
Page 4
The notes on pages 5 to 36 are an integral part of these consolidated financial statements.
2011 2010
CHF 000s CHF 000s
CASH FLOWS FROM OPERATING ACTIVITIES
Total comprehensive (loss)/income for the year ( 75,246) 85,768
Adjustment for:
Interest income ( 2,252) ( 6,580)
Depreciation and amortisation of property, plant, equipment and intangibles 7,373 5,777
Gain from disposals of property, plant and equipment, net ( 943) ( 462)
Impairment loss on intangible assets 162 273
Impairment loss on property 1,443 -
Contributed assets ( 596) ( 160)
Donated assets 1,805 14
Movement in fair value of financial assets through profit and loss 969 ( 236)
Movement in non-cash pension asset 4,522 1,774
Net movement in provisions ( 1,952) ( 59)
10,531 341
Operating (deficit)/surplus before changes in working capital ( 64,715) 86,109
Changes in working capital
Decrease in accounts receivable, net 9,326 20,204
(Increase)/decrease in prepayments and accrued income ( 2,042) 2,260
Decrease in other receivables 207 483
Increase in inventories ( 1,889) ( 510)
(Decrease)/increase in accounts payable and accrued expenses ( 13,593) 15,464
Increase in deferred income and prepaid contributions 2,421 1,825
Increase/(decrease) in short-term employee benefit liabilities 397 ( 2,116)
Net change in working capital ( 5,173) 37,609
CASH FLOWS (USED IN)/GENERATED FROM OPERATING ACTIVITIES ( 69,888) 123,719
CASH FLOWS (USED IN)/GENERATED FROM INVESTING ACTIVITIES
Acquisition of property, plant, equipment and intangibles ( 12,664) ( 15,849)
Acquisition of global bond funds ( 1,362) ( 77,000)
Acquisition of global equity funds ( 7,056) -
Proceeds from disposals of property, plant and equipment 2,726 1,982
Proceeds from disposal of global bond fund 13,000 -
Net decrease/(increase) in short-term investments 100,000 ( 50,000)
Bank interest received, net 900 1,026
NET CASH FLOWS GENERATED FROM/(USED IN)
INVESTING ACTIVITIES 95,544 ( 139,841)
NET INCREASE/(DECREASE) IN CASH AND CASH EQUIVALENTS 25,656 ( 16,122)
CASH & CASH EQUIVALENTS AT THE BEGINNING OF THE YEAR 128,825 139,416
Effect of exchange rate fluctuations on cash held 1,531 5,531
CASH & CASH EQUIVALENTS AT THE END OF THE YEAR 156,012 128,825
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 5
1 Activities
Founded in 1919, the International Federation of Red Cross and Red Crescent Societies (IFRC) is a membership
organisation comprising 187 member Red Cross and Red Crescent societies governed by a Governing Board and with
management support provided by a Secretariat with more than 60 delegations strategically located to support activities
around the world. The Secretariat headquarters’ address is 17, Chemin des Crêts, Geneva, Switzerland.
In 1996, the IFRC concluded a Status Agreement with the government of Switzerland which recognised the IFRC's
international personality and reconfirmed its exemption from all Swiss taxes. The IFRC has been granted observer
status at the United Nations.
The IFRC’s mission is to improve the lives of vulnerable people by mobilising the power of humanity. Working
through its 187 member national societies, the IFRC acts before, during and after disasters and health emergencies to
meet the needs and improve the lives of vulnerable people. It does so with impartiality as to nationality, race, gender,
religious beliefs, class and political opinions.
The IFRC coordinates international support for large-scale disasters and health crises, strengthens the capacities and
leadership of its member national societies, and acts at the international level to raise resources and persuade decision
makers to act at all times in the interests of vulnerable people.
Guided by Strategy 2020 – a collective plan of action for the IFRC and its member national societies to tackle the major
humanitarian and development challenges of this decade – the IFRC is committed to ‘saving lives and changing minds’.
The General Assembly, composed of delegates from member national societies, is the supreme governing body of the
IFRC. The Governing Board, elected by and from among the members of the General Assembly, has authority to
govern the IFRC between meetings of the Assembly, including decision authority on certain financial matters. The
Finance Commission, comprising nine members and a chairman elected in a personal capacity by the General
Assembly, has as its key function to give its advice on all financial questions affecting the IFRC.
The IFRC acts under its own constitution with all rights and obligations of a corporate body with a legal personality.
The IFRC is solely responsible, to the exclusion of its member societies, for all its transactions and commitments.
The IFRC together with National Red Cross and Red Crescent Societies and the International Committee of the Red
Cross (ICRC) make up the International Red Cross and Red Crescent Movement.
These financial statements of the IFRC for the year ended 31 December 2011 are consolidated to include activities of
the Geneva Secretariat, all IFRC delegations, the International Federation of Red Cross and Red Crescent Societies at
the United Nations, Inc. (IFRC at the UN Inc.) and the Foundation for the International Federation of Red Cross and
Red Crescent Societies (the Foundation). The IFRC has interests in certain jointly controlled operations which are
proportionately consolidated for the purposes of these financial statements (see also note 2.3 (c)).
The consolidated financial statements presented do not include the results of the member national societies. Each of
these has its own status separate from that of the IFRC and the IFRC exercises no control over them.
2 Significant accounting policies
2.1 Statement of compliance
The consolidated financial statements have been prepared in accordance with and comply with International Financial
Reporting Standards (IFRS) as adopted by the International Accounting Standards Board (IASB) and interpretations
issued by the International Financial Reporting Interpretations Committee (IFRIC) of the IASB and are presented in
accordance with the IFRC’s Financial Regulations.
Currently, IFRS do not contain specific guidance for non-profit organisations (NPO) and non-governmental
organisations (NGO) concerning the accounting treatment and the presentation of financial statements. Where IFRS is
silent or does not give guidance on how to treat transactions specific to the not-for-profit sector, accounting policies
have been based on the general principles of IFRS, as detailed in the IASB Framework for the Preparation and
Presentation of Financial Statements.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 6
2.2 Basis of preparation
(a) Basis of preparation
In accordance with the IFRC’s Financial Regulations adopted by the General Assembly, the consolidated financial
statements are presented in Swiss Francs, rounded to the nearest thousand.
The consolidated financial statements have been prepared under the historical cost convention, except for financial
assets which are stated at their fair value. Fair value is the amount for which an asset, liability or financial instrument
could be exchanged between knowledgeable and willing parties in an arm’s length transaction.
Preparation of the consolidated financial statements requires the use of estimates and assumptions that affect the
reported amounts of assets and liabilities, and disclosures of contingent assets and liabilities at the date of the
consolidated financial statements and the reported amounts of revenues and expenses during the reporting period.
Although these estimates are based on management’s best knowledge of current events and actions, actual results may,
ultimately, differ from those estimates, and the original estimates and assumptions will be modified, as appropriate, in
the year in which the circumstances change. Details of critical accounting estimates and judgements are provided in
note 4 to these consolidated financial statements.
(b) Reclassification of comparative figures
Reclassification of certain comparative figures has been made in the consolidated financial statements, in order to be
consistent with the current year presentation. In particular, the following changes have been made:
In 2010, current accounts receivable of CHF 106,632k were presented together with non-current accounts receivable
of CHF 8,384k. In these consolidated financial statements, current accounts receivable and non-current accounts
receivable are presented separately.
In 2010, prepaid expenses amounting to CHF 837k were presented together with other receivables. In these
consolidated financial statements, together with accrued income amounting to CHF 196k and other assets amounting
to CHF 8k, prepaid expenses are presented separately from other receivables.
In 2010, accrued expenses relating to staff on loan costs to be paid to national societies were included within
accounts payable to national societies. In these consolidated financial statements, these payables are included within
Accrued expenses.
In 2010, impairment losses of CHF 273k on intangible fixed assets were disclosed in the intangible fixed assets note
under disposal and write offs. In these consolidated financial statements, impairment losses are separately disclosed
in the intangible fixed assets note.
In 2010, vehicle rental, sales of vehicle spare parts and supplies and logistics services income amounting to
CHF 4,043k were presented as other income. In these consolidated financial statements, these incomes are included
within Services income.
In 2010, hosted programme membership fees amounting to CHF 1,404k were included within Voluntary
contributions income. In these consolidated financial statements, this income is included within Other income.
In 2010, programme services and support recovery (PSSR - see note 33) income invoiced on voluntary contributions
of goods in-kind was included within Voluntary contributions income. In these consolidated financial statements,
this income is included within Services income.
(c) Changes in accounting policies
In preparing these consolidated financial statements, the IFRC has applied new and revised IFRS and IAS that became
effective on 1 January 2011. Changes have been made in accordance with the new and revised standards, none of
which have had a material impact on these consolidated financial statements.
The following new and revised Standards and Interpretations have been issued, but are not yet effective. They have not
been applied early in the preparation of these consolidated financial statements. Their impact on the consolidated
financial statements of the IFRC has not yet been systematically analysed; however, a preliminary assessment has been
conducted by IFRC’s management, and the expected impact of each Standard and Interpretation is presented below.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 7
(i) Standards, Amendments and Interpretations to existing standards that are not yet effective:
Standard/Amendment/Interpretation Effective date
IFRC planned
application Anticipated impact
IFRS 10 Consolidated Financial Statements 1 January 2013 Reporting year 2013 Not material
IFRS 11 Joint Arrangements 1 January 2013 Reporting year 2013 Not material
IFRS 12 Disclosure of Interests in Other Entities 1 January 2013 Reporting year 2013 Not material
IFRS 13 Fair Value Measurement 1 January 2013 Reporting year 2013 Not material
IAS 19 Employee Benefits (amended 2011) 1 January 2013 Reporting year 2013 See below
IFRS 9 Financial Instruments and related
amendments to IFRS 7 regarding transition 1 January 2015 Reporting year 2015 Not material
If IAS 19 Employee Benefits (amended 2011) had been adopted with effect from 1 January 2011, based on actuarial
information available at 31 December 2011, the balance of unrestricted reserves at 31 December 2011 would have
decreased by CHF 47,919k.
(ii) Standards, Amendments, Interpretations to existing standards that are not yet effective and are not relevant to the
IFRC’s operations:
Standard/Amendment/Interpretation Effective date
Disclosures – Transfers of Financial Assets (Amendments to IFRS 7) 1 July 2011
Deferred Tax: Recovery of Underlying Assets (Amendments to IAS 12) 1 January 2012
Presentation of Items of Other Comprehensive Income (Amendments to IAS 1) 1 July 2012
IAS 27 Separate Financial Statements (2011) 1 January 2013
IAS 28 Investments in Associates and Joint Ventures (2011) 1 January 2013
IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine 1 January 2013
Disclosures—Offsetting Financial Assets and Financial Liabilities (Amendments to IFRS 7) 1 January 2013
Offsetting Financial Assets and Financial Liabilities (Amendments to IAS 32) 1 January 2014
2.3 Basis of consolidation
a) Wholly owned subsidiary
The International Federation of Red Cross and Red Crescent Societies at the United Nations, Inc. (IFRC at the UN Inc.)
is a wholly-owned subsidiary, over which the IFRC has the power to govern the financial and operating policies, so as
to obtain benefits from its activities. The IFRC at the UN Inc. was established to support the objectives of the IFRC, by
working to prevent and alleviate human suffering throughout the world, and to coordinate the humanitarian and disaster
relief efforts of the IFRC with efforts conducted by the United Nations. The assessment of whether the IFRC controls
the IFRC at the UN Inc. includes an examination of all facts and circumstances that affect potential voting rights, except
the intention of management and the financial ability to exercise any such rights.
The IFRC consolidates its interest in the IFRC at the UN Inc. by combining the financial statements of the IFRC and the
IFRC at the UN Inc. line-by-line adding together like items of assets, liabilities, equity, income and expenses. Inter-
entity transactions and balances are eliminated upon consolidation. The IFRC at the UN Inc’s accounting policies are
consistent with those adopted by the IFRC.
b) Special purpose entity
The Foundation for the International Federation of Red Cross and Red Crescent Societies (the Foundation) is a special
Foundation, over which the IFRC has the power to govern the financial and operating policies, so as to obtain benefits
from its activities. The Foundation was established to support the objectives of the IFRC, by providing the necessary
institutional framework for international revenue projects undertaken by, and to the benefit of, the IFRC and its member
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 8
Red Cross and Red Crescent National Societies. The assessment of whether the IFRC controls the Foundation includes
an examination of all facts and circumstances that affect potential voting rights, except the intention of management and
the financial ability to exercise any such rights. Although the IFRC does not control directly, or indirectly, more than
half of the voting power of the Foundation, the IFRC exercises control by virtue of having a 100% interest in the net
assets of the Foundation.
In accordance with SIC 12 Consolidation Special Purpose Entities, and based on the facts stated above, the Foundation
is treated as a special purpose entity and is therefore consolidated into these financial statements on a line-by-line basis
adding together like items of assets, liabilities, equity, income and expenses. Inter-entity transactions and balances are
eliminated upon consolidation. The Foundation’s accounting policies are consistent with those adopted by the IFRC.
c) Joint ventures
The IFRC has interests in the following jointly controlled operations, whose activities are in accordance with the
IFRC’s principal activities, as outlined above: Global Road Safety Partnership; ProVention Consortium; Sphere
Programme; Steering Committee Human Response; Stop AIDS Alliance; and RBN Central Africa.
The IFRC accounts for its interests in these operations by proportionate consolidation combining its share of each joint
venture’s individual income and expenses, assets and liabilities and cash flows on a line-by-line basis with like items in
the IFRC consolidated financial statements. Inter-entity transactions and balances are eliminated upon consolidation.
Joint ventures’ accounting policies are consistent with those adopted by the IFRC.
2.4 Foreign currency transactions
The presentation and functional currency of the IFRC is the Swiss Franc, as statutory contributions and operating
expenditures are primarily denominated in, and influenced by, the Swiss Franc. The IFRC’s operations are not
concentrated in any one economic environment, but appeals are always launched in Swiss Francs, and expenditure is
budgeted and managed in Swiss Francs.
Monetary assets and liabilities denominated in foreign currencies are translated into Swiss Francs using the month end
exchange rate. Foreign currency transactions are translated into Swiss Francs using rates which approximate the
prevailing rate at the date of the transactions. Exchange gains and losses resulting from the settlement of foreign
currency transactions and from translation are included under Net finance income/(expense), in the Consolidated
Statement of Comprehensive Income, with the exception of realised exchange gains and losses on voluntary
contributions, which are included under Voluntary contributions, net in the Consolidated Statement of Comprehensive
Income.
The principal rates of exchange against the Swiss Franc are shown below:
Closing rate of exchange Average rate of exchange
2011 2010 2011 2010
USD 0.94 0.95 0.88 1.04
EUR 1.22 1.25 1.23 1.38
GBP 1.46 1.47 1.41 1.61
SEK - 100 13.64 13.92 13.65 14.47
CAD 0.92 0.95 0.89 1.01
2.5 Cash and cash equivalents
Cash and cash equivalents include cash in hand, short-term bank deposits and bank deposits with original maturities of
three months or less from the acquisition date that are subject to insignificant risk of changes in their fair value.
In certain countries, where implementing national societies operate under the legal status of the IFRC, bank accounts, in
the name of the IFRC, have been opened for these national societies. These bank accounts have not been included in
these consolidated financial statements as the IFRC has no control over the funds flowing in and out of these accounts,
and no IFRC employees are signatories to these accounts. In addition, there are agreements in place, between the IFRC
and the national societies operating such accounts, which transfer the risks and rewards of their operation to the national
societies concerned.
2.6 Short-term investments
Short-term investments are initially recognised at fair value and subsequently measured at amortised cost, and include
short-term bank deposits with original maturities of more than three months, but less than one year.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 9
2.7 Financial assets at fair value through profit or loss
Financial assets at fair value through profit or loss comprise units held in global bond funds and global equity funds
which are recorded as financial assets at fair value through profit and loss and classified as current assets. The fair
value of the units is fully determined by reference to published price quotations in an active market.
Purchases and sales of units are recognised on the trade date, which is the date that the investment managers commit to
purchase or sell the asset, on behalf of the IFRC.
Realised and unrealised gains and losses arising are changes in the fair value of financial assets, and are included in the
Consolidated Statement of Comprehensive Income under Net finance income/(expense), in the period in which they
arise.
2.8 Accounts receivable, net
Accounts receivable are financial assets comprising all statutory contributions due but not yet received, outstanding
pledges (written commitments) received from donors, and amounts due from national societies and sundry customers,
for the provision of services.
Accounts receivable are initially recognised at fair value (original pledge or invoice amount) and subsequently
measured at amortised cost less provision made for impairment.
A provision for impairment is made when there is objective evidence that the IFRC will not be able to collect all
amounts due according to the original terms of the accounts receivable. The amount of the provision is the difference
between the carrying amount and the recoverable amount.
Amounts receivable, the recovery of which will only be confirmed by the occurrence or non-occurrence of one or more
uncertain future events not wholly within the control of the IFRC, are not recognised as receivables in the Consolidated
Statement of Financial Position, but are disclosed as contingent assets (see note 36 (a)). If the effect is material, the fair
value of contingent assets is determined by discounting the expected future cash flows that reflect a current market
assessment of the time value of money.
2.9 Inventories
Inventories, principally prepositioned relief items and telecommunications and computer equipment which have not
been committed to a project, are stated at the lower of cost or net realisable value. Cost is determined using the first in,
first out (FIFO) method, and comprises cost of purchase and other costs directly attributable to acquisition. Net
realisable value is the estimated selling price, in an arms length transaction, less attributable selling expenses.
Inventories are included in expenditure once they have been committed to a project.
Relief and other items acquired for specific projects are expensed at the time of receipt, and are not included in
inventories.
2.10 Property, plant and equipment
Property, vehicles, and equipment are stated at historical cost less accumulated depreciation.
Assets received in-kind are accounted for using the same principles as used for purchased assets, with acquisition costs
being determined on the basis of donor values.
Depreciation is calculated on the straight-line method to write off assets to their estimated residual values over their
estimated useful lives as follows:
Property up to 50 years
Light vehicles 5 years
Heavy vehicles 10 years
Computer equipment 3 - 4 years
Other equipment 2 - 5 years
When the carrying amount of an asset is greater than its estimated recoverable amount, it is immediately written down
to its estimated recoverable amount.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 10
Gains and losses, on disposals, are determined by comparing proceeds with net carrying amounts, and are recognised in
the Consolidated Statement of Comprehensive Income.
Repairs and maintenance costs are recognised in the Consolidated Statement of Comprehensive Income during the
financial period in which they are incurred.
Subsequent expenditure is capitalised only when probable future economic benefits will flow to the IFRC and the cost
can be measured reliably.
2.11 Intangible assets
Acquired computer software is capitalised on the basis of the costs incurred to acquire and bring the specific software to
use.
Amortisation is calculated on the straight-line method to write off assets to their estimated residual values over their
estimated useful lives of 3 years.
Costs associated with maintaining software are recognised in the Consolidated Statement of Comprehensive Income
during the financial period in which they are incurred.
2.12 Impairment
In order to determine whether there is any indication of impairment, the carrying amounts of the IFRC’s assets, other
than financial assets at fair value through profit and loss (see note 2.7) and inventories (see note 2.9), are reviewed at
each period end date, or earlier, if events, or changes in circumstances, indicate that the carrying amount may not be
recoverable.
An impairment loss is recognised in the Consolidated Statement of Comprehensive Income whenever the carrying
amount of an asset exceeds its recoverable amount. The recoverable amount of an asset is the greater of its value in use
and its fair value less costs to sell. In assessing value in use, the estimated future cash flows are discounted to their
present value using a discount rate that reflects current market assessments of the time value of money and the risks
specific to the asset.
An impairment loss is reversed if there is an upward revision of the recoverable amount. An impairment loss is only
reversed to the extent that the asset’s carrying amount does not exceed the carrying amount that would have been
determined net of depreciation or amortisation, if no impairment loss had been recognised.
2.13 Accounts payable
Accounts payable are financial liabilities initially recognised at fair value and subsequently measured at amortized cost.
2.14 Provisions
Provisions for redundancy costs, operations, project deficits and restructuring are recognised when there is a present
legal or constructive obligation as a result of past events; it is probable that an outflow of resources will be required to
settle the obligation, and a reliable estimate of the amount can be made.
If the effect is material, provisions are determined by discounting the expected future cash flow that reflects current
market assessments of the time value of money, and where appropriate, the risks specific to the liability.
a) Provision for redundancy costs
Provision is made for the estimated cost of known redundancies, which are normally paid out within the next twelve
months. A redundancy is known when the decision to make the employee redundant has been taken and
communicated.
b) Provision for operations
The provision for operations represents the value of working advances made to national societies which the recipient
national societies have not reported on by the period end date. Detailed breakdowns of the expenditure incurred by the
national societies are not, therefore, known at the period end date, but are normally reported shortly thereafter.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 11
c) Provision for project deficits
A provision for project deficits is maintained in respect of those projects where expenditure has exceeded income. If
additional funding is not forthcoming to reverse the deficits within twelve months following the period end date, the
deficits are written off.
d) Provision for restructuring
A provision for restructuring is made when the IFRC has a constructive obligation to restructure; that is when a detailed
formal plan identifying the key elements exists, and there is an expectation that the plan will be implemented.
2.15 Reserves
Reserves are classified as either unrestricted or restricted.
a) Unrestricted reserves Unrestricted reserves are not subject to any legal or third party restriction and can be used as the IFRC sees fit.
Unrestricted reserves may be designated by the IFRC for specific purposes, to meet future obligations or mitigate
specific risks. Designated reserves include the following:
Designated reserves
Self-insurance reserve
The IFRC self-insures its vehicles against collision and other damage. Based on an assessment of risk exposure, this
reserve is established to meet approved insurance claims as they fall due.
Statutory meetings reserve
Funds are set aside to meet the anticipated costs of future statutory meetings and Governing Board initiatives as and
when the events take place.
Actuarial valuations
The actuarial valuation of the IFRC’s pension funds results in actuarial gains and losses and their subsequent
amortisation. Movements on these valuations are based on factors outside the IFRC’s control, such as changes in
actuarial assumptions and changes in pension fund profile, and are therefore allocated to a reserve designated to record
such movements.
Specific projects
As explained in note 32, in keeping with the IFRC’s full cost recovery principles, an additional 6.5% programme and
services support recovery is added to the cost of each operation as a contribution to fund the indirect costs of providing
support services essential to the success of operations. In the event that there is an operation with expenditure in excess
of CHF 50,000k and the total amount charged for a given year exceeds the total amount incurred, the excess is allocated
to projects according to a Governing Board decision. Pending the Governing Board decision, the excess is allocated to
a designated reserve.
b) Restricted reserves These represent the cumulative excess of income, from earmarked voluntary contributions, over expenditures on
stipulated field operations. Restricted reserves include the following:
Funds held for field operations
Donor-restricted contributions
Some contributions pledged to, or received by the IFRC, have been earmarked to the extent that donors stipulate that the
funds are to be used on IFRC operations at appeal, programme, project or sub-project level. The cumulative excess, of
earmarked voluntary contributions over stipulated field operation expenditure, is recorded as Funds held for field
operations within restricted reserves. In the event that the funds cannot be spent, the IFRC obtains agreement from the
donor for a reallocation of those funds for a different use, or reimburses them to the donor, in which case they are
recognised as a liability until the effective repayment takes place.
Field operations with temporary deficit financing
Expenditures on individual field projects may exceed the amount of income from voluntary contributions that have been
allocated to projects at reporting dates. The excess of expenditure over income, on individual projects, is separately
reflected within Funds held for field operations as Field operations with temporary deficit financing, so long as
management considers that future funding will be forthcoming. When management considers that future funding is
unlikely to be forthcoming, the deficit is reclassified as unrestricted expenditure, and reflected as a reduction in
unrestricted reserves, through the provision for project deficits.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 12
2.16 Income
Income comprises statutory contributions from member national societies, contributions in cash or in-kind from donors,
income from services and sundry income from the sale of goods.
a) Statutory contributions
Statutory contributions are fixed by the General Assembly, the supreme governing body of the IFRC, and are
recognised in the year they fall due, unless there is significant uncertainty over the collection of the amounts, or they are
subject to extended payment terms, in which case the income is not recognised until payment is received.
As explained in note 2.12, the carrying amounts of the IFRC’s assets are reviewed at each period end date, in order to
determine whether there is any indication of impairment. Statutory contributions recognised that have not been paid by
the year end are considered as fully impaired, and are accordingly fully provided for at the period end date. This does
not invalidate the obligation of member national societies to pay the amounts due.
Statutory contributions receivable may be subject to appeal and subsequent adjustments.
b) Voluntary contributions
Cash contributions are recognised when a written pledge has been received from the donor.
Government grants and contributions that are based on contracts for specific projects, akin to government grants, are
recognised as expenditure is incurred and contractual obligations are fulfilled. Contributions received, but not yet
recognised, are included in deferred income. The IFRC typically receives such contributions from diplomatic missions,
UN agencies, ECHO and other government agencies such as USAID. Government grants that are not for specific
projects, and are both earmarked and managed at appeal level (see note 2.16 (c)), are recognised when a confirmed
written pledge has been received from the donor.
Legacies and bequests in cash are recorded at the earlier of receipt, or where the amount to be received is known, at the
date legal title has passed.
In-kind contributions of goods (comprising relief supplies) and services (in the form of staff or transport) are recognised
on the date of receipt of the goods or services, and are recognised equally as both income and expenditure in the Consolidated Statement of Comprehensive Income. In-kind goods and services received in response to appeals are
measured at fair value.
The fair value of in-kind goods is taken as the value indicated by the donor. This value is tested for reasonableness by
comparing it to the cost that the IFRC would incur if it were to buy in the open market similar goods for the same
intended use. If the market value is found to be significantly different to the value indicated by the donor, the value is
revised to the market value.
The fair value of in-kind staff is taken as the average cost that would be incurred by the IFRC, if it were to directly
employ a person in a similar position.
In-kind contributions of tangible assets are recognised at fair value as voluntary contributions. Depreciation and if
applicable, impairment adjustments of such assets, are included in operational expenditure in the same manner as for
purchased tangible assets.
The IFRC sometimes agrees with a donor, that the value of a confirmed written pledge previously received, shall be
changed – either increased or decreased. Such changes are recognised as additions to, or reductions of income, during
the period in which the change was agreed. The IFRC is not able to evaluate the potential impact of such changes on
voluntary income reported in these consolidated financial statements.
c) Earmarking
Voluntary contributions are identified according to the level of earmarking (see note 2.15 (b)) Donor-restricted
contributions).
Unearmarked contributions
Unearmarked contributions can be used for any purpose to further the objectives of the organisation, and are recognised
in the Consolidated Statement of Comprehensive Income as unrestricted income, when pledged. At the end of the
accounting period, unspent, unearmarked contributions are included in unrestricted reserves.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 13
Earmarked contributions
Earmarked contributions can be stipulated by donors for use on field operations at the appeal, programme, project or
sub-project level. Such earmarked contributions are fully under the control of the IFRC, and, unless they are also
subject to specific contractual obligations or earmarked for use in a future period, are recognised in the Consolidated
Statement of Comprehensive Income as restricted income, when pledged. At the end of the accounting period, unspent
earmarked contributions are included in restricted reserves.
Contributions that are subject to specific contractual obligations or earmarked for use in a future period are not fully
under control of the IFRC. Contributions that are subject to specific contractual obligations, similar to government
grants, are recognised as income as expenditure is incurred and contractual obligations are fulfilled. Amounts received,
but not recognised, are included in deferred income. Contributions that are earmarked for use in a future period are
recognised as deferred income in the current period and subsequently recognised in the Consolidated Statement of
Comprehensive Income in the future period for which they were earmarked.
d) Income from the sale of goods
Income from the sale of goods, principally from publications and promotional goods, is recognised when the risks and
rewards of ownership are passed to the buyer.
e) Income from the provision of services
Income from services is recognised in the period in which the service is rendered. For the provision of services across
accounting periods, income is recognised according to the stage of completion of the service, by reference to services
performed to date as a percentage of total services to be performed.
The majority of income from the provision of services is derived from services provided to national societies, including
vehicles under lease, logistics services and in countries where national societies are working bi-laterally with the local
national society, rather than multi-laterally with the IFRC and the local national society. Income from these types of
services is included under Services income in the Consolidated Statement of Comprehensive Income.
2.17 Finance income and expense
The net finance result is comprised of interest and dividends received on funds invested, realised and unrealised foreign
exchange gains and losses, and realised and unrealised gains and losses on units held in global equity and bond funds.
Interest income is recognised, in the Consolidated Statement of Comprehensive Income, as it accrues, taking into
account the effective yield on the asset.
2.18 Employee benefit costs
a) Retirement benefit obligations
A defined contribution plan is a post-employment benefit plan under which an entity pays fixed contributions into a
separate entity and will have no legal or constructive obligation to pay further amounts. Obligations for contributions to
defined contribution pension plans are recognised under Employee benefits expense in the Consolidated Statement of
Total Comprehensive Income in the periods during which services are rendered by employees.
A defined benefit plan is a post-employment benefit plan other than a defined contribution plan.
The IFRC operates two pension plans for expatriate field staff and all headquarters staff. Pension obligations are
covered by independent funds which are held in a single, separate legal entity that is governed by Swiss law. These
independent funds are fully funded through payments, as determined by periodic actuarial calculations, in accordance
with Swiss law. The assets of the funds are managed as one within the separate legal entity. For the purposes of these
consolidated financial statements, both funds are considered and accounted for as a single defined benefit plan in
accordance with the requirements of IFRS.
The amount recognised in the Consolidated Statement of Financial Position in respect of the defined benefit plans is the
present value of the defined benefit obligations at the period end date less the fair value of the plans’ assets, together
with adjustments for unrecognised actuarial gains and losses and past service costs. The defined benefit obligation is
calculated by independent actuaries using the projected unit credit method. The present value of the defined benefit
obligation is determined by discounting the estimated future cash outflows, using interest rates on high quality corporate
bonds that have terms to maturity approximating to the terms of the related pension liability, and are denominated in
Swiss Francs, the currency in which the benefits will be paid.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 14
Where the amount determined in accordance with the above is an asset, it is recognised at the lower of the amount so
determined and the total of any cumulative unrecognised net actuarial losses and past service cost and the present value
(using the same discount rate as above) of likely reductions in future contributions to, or refunds from the scheme.
Cumulative actuarial gains and losses arising from experience adjustments, and changes in actuarial assumptions in
excess of the greater of 10% of the value of plan assets or 10% of the defined benefit obligation, are spread to income
over the employees’ expected average remaining working lives.
Staff employed locally by the delegations receive social benefits in accordance with the legislation of the countries
concerned and the local collective staff agreements. The cost of such benefits is recognised on an accruals basis in
these consolidated financial statements.
b) Termination benefits
Termination benefits are payable whenever an employee’s employment is terminated before the normal retirement date,
contract completion date, or whenever an employee accepts voluntary redundancy in exchange for these benefits.
Termination benefits are recognised on the basis of a formal committed plan to terminate the employment of current
employees, or are provided as a result of an offer made to encourage voluntary redundancy.
2.19 Leases
A lease is an agreement whereby the lessor conveys to the lessee, in return for a payment or series of payments, the
right to use an asset for an agreed period of time. A finance lease is a lease that transfers substantially all the risks and
rewards incidental to ownership of an asset. An operating lease is a lease other than a finance lease.
a) Finance leases
The IFRC has no interest in finance leases, as either lessor or lessee.
b) Operating leases as lessee
Payments made under operating leases are recognised in the Consolidated Statement of Comprehensive Income on a
straight-line basis over the period of the lease.
c) Operating leases as lessor
Lease income from operating leases is recognised in the Consolidated Statement of Comprehensive Income on a
straight line basis over the lease term.
3 Financial risk management
3.1 Financial risk factors
The IFRC is exposed to a variety of financial risks namely: market risk (including foreign currency risk and pricing
risk); credit risk; liquidity risk; and interest rate risk. The IFRC seeks to actively minimise potential adverse effects
arising from these exposures as detailed below.
The Secretary General has overall responsibility for the establishment of the IFRC’s risk management framework, and
in this regard, has established, in consultation with the Finance Commission, the IFRC’s Investment Guidelines, which
set out the overall principles and policies for the management of the IFRC’s use of financial instruments. The Finance
Commission has the oversight responsibility for ensuring management in accordance with the Investment Guidelines,
and reports thereon to the Governing Board and the General Assembly.
In addition, in 2007 the Governing Board established an Audit and Risk Committee to provide advice on all risk matters
affecting the IFRC, and in particular, advice on risk identification, evaluation, measurement, monitoring and the overall
risk management processes of the IFRC.
a) Market risk
Foreign currency risk
Foreign currency risk primarily arises on non-Swiss Franc bank deposits and on voluntary contributions receivable in
currencies other than Swiss Francs, for the period between the pledge date and the settlement date. Foreign currency
risk on these assets is mitigated by foreign currency risk on accounts payable that are denominated in currencies other
than Swiss Francs. The main currencies giving rise to foreign currency risk are the Canadian Dollar, Euro, Pound
Sterling, Swedish Kroner and United States (US) Dollar. The IFRC ensures that net exposure is kept to an acceptable
level, by buying or selling foreign currencies at spot rates, where necessary, in order to address short-term needs.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 15
At 31 December 2011, if the Swiss Franc had strengthened by 5% against the aforementioned currencies, with all other
variables held constant, the net deficit result and total comprehensive loss for the year would have decreased by
CHF 4,393k (2010: CHF 2,227k increase in net result and total comprehensive income), as a result primarily of foreign
exchange gains on translation of pledges receivable balances and bank balances held mostly in Euros and US Dollars.
An equal change in the opposite direction would have increased the net deficit result and total comprehensive loss for
the year by CHF 4,393k (2010: CHF 2,227k) decrease in net result and total comprehensive income).
Price risk
The IFRC is exposed to equities and securities price risk because of investments measured at fair value through profit or
loss. In order to manage its price risk arising from investments in equities and securities, the IFRC diversifies its
investment portfolio, which is managed by external investment managers, in accordance with the limits set out in the
IFRC’s Investment Guidelines.
The equity investments are held in a global equity trust fund that is not listed. This equity trust fund invests in actively
traded equity securities to mirror the listed MSCI World Index. For such equity investments classified at fair value
through profit and loss, a 5% increase in the MSCI World Index at the reporting date would have increased the global
equity funds investment and reduced the net deficit result and total comprehensive loss for the year by CHF 1,272k
(2010: CHF 1,035k). An equal change in the opposite direction would have decreased the global equity funds
investment and increased the net deficit result and total comprehensive loss for the year by CHF 1,272k
(2010: CHF 1,035k).
The global bond funds investment classified at fair value through profit or loss is held in a listed fund that is indexed to
the Swiss Bonds Index AAA-BBB Composite. A 5% increase in this Index at the reporting date would have increased
global bond funds investment and reduced the net deficit result and total comprehensive loss for the year by
CHF 3,337k (2010: CHF 3,851k). An equal change in the opposite direction would have decreased the global bond
funds investment and the net deficit result and total comprehensive loss for the year by CHF 3,337k
(2010: CHF 3,851k).
There was no exposure to commodities price risk at either 31 December 2011 or 31 December 2010.
Interest rate risk
There is no significant short-term exposure to changes in interest rates, as cash and cash equivalents are held as cash in
hand, on-demand deposits, or in short-term deposits with maturities of three months or less, and there are no interest-
bearing liabilities. Short-term investments with maturities of more than three months have fixed interest rates for the
terms of the investments.
b) Credit risk
The IFRC’s principal receivables are with its member national societies, donor governments and other international
orgainsations where credit risk is considered to be low. Full provision is made for all unpaid statutory contributions at
each period end date.
IFRC’s Investment Guidelines only allow investment in liquid securities and deposits, and only with counterparties that
have a good credit rating. Following the deterioration in the economic climate, the number of counterparties, with
whom funds are deposited, was increased in 2010, and has been further increased in 2011 in order to achieve better
diversification, and thus minimise counterparty risk. The credit rating of all counterparties is reviewed on a regular
basis.
The IFRC maintains banking relationships with certain unrated financial institutions in countries, primarily in Africa,
where rated financial institutions are not operational. The value of assets held with such institutions at 31 December
2011 was CHF 2,111k (2010: CHF 1,435k) – see also note 5.
Other positions are not material, or are covered by provisions.
c) Liquidity risk
Liquidity risk is minimised by maintaining sufficient funds as cash in hand, on-demand bank deposits or short-term
bank deposits with maturities of three months or less, to meet short-term liabilities. In addition, investments are all in
liquid securities which can easily be sold to meet longer term cash flow needs and no significant contractual payments
are due on financial investments, including financial assets at fair value through profit or loss and short-term
investments.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 16
d) Fair value hierarchy: The IFRC’s financial instruments consist of cash and cash equivalents, short term investments, financial assets at fair
value through profit or loss, accounts receivable, other receivables, accounts payable and accrued liabilities.
The carrying values of cash and cash equivalents, short term investments, accounts receivable, other receivables,
accounts payable and accrued liabilities approximate their respective fair values due to the short-term nature of the
instruments.
All financial instruments measured at fair value are categorised into one of three hierarchy levels. Each level is based
on the transparency of the inputs used to measure the fair values of assets and liabilities. The hierarchy of inputs
disclosed is described below.
Level 1: quoted prices (unadjusted) in active markets for identical assets or liabilities; Level 2: inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either
directly (ie as prices) or indirectly (ie derived from prices); Level 3: inputs for the asset or liability that are not based on observable market data (unobservable inputs).
At 31 December 2011 and 2010, only financial assets at fair value through profit or loss are carried at fair value. The
global bond funds are classified at Level 1. The global equity funds are classified at level 2 as they are not themselves
listed, but are held in a managed investment fund which is directly related to MSCI World Index (listed).
3.2 Capital risk management
By its very nature, the IFRC does not have capital as defined by IFRS. Unrestricted reserves may be considered to have
similar characteristics to those of capital, the intention of which is to maintain a sound financial position to ensure that
the organisation is able to continue its operations and thereby fulfill its mission. Following an analysis of the financial
risks to which the IFRC is exposed, the IFRC has set an unrestricted reserves target of CHF 63,000k to CHF 75,000k
excluding unrestricted designated reserves. This target has been agreed by the Finance Commission.
The IFRC is not subject to any externally imposed capital or reserves requirements.
4 Critical accounting estimates and judgements
Accounting estimates and judgements are continually evaluated, and are based on historical experience and other
factors, including reasonable expectations of future events according to relevant circumstances.
4.1 Critical accounting estimates and assumptions
The IFRC makes estimates and assumptions concerning the future. The resulting accounting estimates will, by
definition, rarely equal the related actual results. The estimates and assumptions that have a significant risk of causing a
material adjustment to the carrying amounts of assets and liabilities, within the next financial year, are outlined below.
Long term expenditure commitments
The IFRC enters into certain long term expenditure commitments, which may not be fully funded by contributions
pledged, or received at the time the commitments are entered into. At each period end, the IFRC estimates expected
future funding to cover future expenditure commitments. Changes in estimates could result in the need to establish a
provision in accordance with the policy in note 2.14 (c) above.
5 Cash and cash equivalents
2011 2010
CHF 000s CHF 000s
Cash and bank accounts 22,057 25,517
Short-term bank deposits 133,955 103,308
156,012 128,825
Cash and bank accounts include CHF 91k (2010: CHF 74k) held on behalf of the Masambo Fund (see note 34 (a) and
(c)).
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 17
Cash and cash equivalents are denominated in the following currencies:
2011 2010
CHF 000s CHF 000s
Currency
Central African Franc 369 272
Chinese Yuan - 868
Euro 5,275 5,121
Japanese Yen 485 -
Swiss Franc 137,650 99,305
United States Dollar 10,418 18,296
Other currencies 1,815 4,963
156,012 128,825
The credit quality of cash at bank and time deposits can be assessed by reference to external credit ratings where
available as follows:
The above figures include CHF 60,000k (2010: CHF 160,000k) of short-term bank deposits disclosed within Short-term
investments in the Consolidated Statement of Financial Position.
The remainder of cash at bank and short-term deposits in the Consolidated Statement of Financial Position is cash in
hand.
6 Short-term investments
2011 2010
CHF 000s CHF 000s
Short-term bank deposits 60,000 160,000
Short-term investments are all denominated in Swiss Francs.
2011 2010
CHF 000s CHF 000s
Cash at bank and short-term bank deposits
AAA 158 125
AA 369 238
AA- 14,142 74,940
A+ 746 75,688
A 166,358 72,775
A- 66 1
BBB+ - 60,335
BBB 356 149
BBB- 30,308 1,703
BB+ 297 -
BB- 41 262
B+ 14 32
B 111 75
B- 223 200
Unrated 2,111 1,435
215,300 287,958
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 18
7 Financial assets at fair value through profit or loss
2011 2010
CHF 000s CHF 000s
Financial assets 92,182 97,733
2011 2010
CHF 000s CHF 000s
Global bond funds 66,746 77,024
Global equity funds 25,436 20,709
92,182 97,733
The global bond funds, accounted for at fair value, were acquired in June 2010 at an original cost of CHF 70,000. An
additional CHF 1,326k (2010: CHF Nil), representing interest income received since inception, has been reinvested in
the bond funds. In November 2011, the IFRC sold 12,461 units in the bond fund that had been acquired at an original
cost of CHF 12,936k.
The global equity funds, accounted for at fair value, were acquired in August 2007 at an original cost of CHF 30,000k.
An additional CHF 6,400k was invested in February 2011 and a further CHF 2,464k (2010: CHF 1,809k), representing
dividend income received since inception, has been reinvested in the equity funds.
Financial assets at fair value through profit or loss are all denominated in Swiss Francs.
8 Accounts receivable, net
2011 2010
CHF 000s CHF 000s
Accounts receivable
Pledges 81,213 89,431
Provision for doubtful pledges receivable ( 218) ( 857)
80,995 88,574
National societies 23,582 24,823
Provision for doubtful national societies accounts receivable ( 1,131) ( 751)
22,451 24,072
Statutory contributions 24,624 26,252
Provision for unpaid statutory contributions ( 24,624) ( 26,252)
- -
Other accounts receivable 2,244 2,370
Total accounts receivable, net 105,690 115,016
Current accounts receivable 97,651 106,632
Non-current accounts receivable - pledges 8,039 8,384
105,690 115,016
As explained in note 2.16 (a), full provision is made for all statutory contributions outstanding at the year end. This
does not invalidate the obligation of member national societies to pay amounts due.
In 2011, CHF 2,365k of arrears of statutory contributions due from national societies in default (2010: CHF 1,168k),
which had not been previously recognised in the Consolidated Statement of Comprehensive Income, were received, and
have therefore been recognised in the 2011 Consolidated Statement of Comprehensive Income.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 19
CHF 21,939k (2010: CHF 23,490k) of the CHF 24,624k (2010: CHF 26,252k) statutory contributions which are
entirely provided for, have not yet been recognised in the Consolidated Statement of Comprehensive Income (see note
2.16 (a)).
The ageing of accounts receivable in respect of pledges, national societies and statutory contributions before provisions
and totalling CHF 131,633k (2010: CHF 142,876k), is as follows:
2011 2010
CHF 000s CHF 000s
Not past due 67,901 81,361
Past due 1-60 days 10,153 9,939
Past due 61-90 days 2,185 2,510
Past due more than 90 days 51,424 49,066
131,663 142,876
Movements of the provisions for impaired receivables are as follows:
Provision for
pledges
receivable
Provision for
national
societies
accounts
receivable
Provision for
unpaid
statutory
contributions TOTAL
CHF 000s CHF 000s CHF 000s CHF 000s
Movements on the provisions for
impairment of accounts receivable:
2011
Balance at 1 January 857 751 26,252 27,860
Receivables written off during the year ( 457) ( 36) ( 576) ( 1,069)
Unused amounts reversed ( 361) ( 15) ( 2,434) ( 2,810)
Additional provisions 179 431 1,382 1,992
Balance at 31 December 218 1,131 24,624 25,973
2010
Balance at 1 January 1,024 762 26,426 28,212
Receivables written off during the year ( 363) - - ( 363)
Unused amounts reversed ( 260) ( 244) ( 1,990) ( 2,494)
Additional provisions 456 233 1,816 2,505
Balance at 31 December 857 751 26,252 27,860
The maximum exposure to credit risk for accounts receivable in respect of pledges and national societies’ receivables at
the reporting date by type of donor was:
2011 2010
CHF 000s CHF 000s
Accounts receivable, net
National Societies 53,418 50,546
Governments 39,247 55,758
International Organisations 2,027 1,807
Others 10,998 6,905
105,690 115,016
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 20
Accounts receivable before provisions in respect of pledges, national societies, statutory contributions and other
receivables are denominated in the following currencies:
2011 2010
CHF 000s CHF 000s
Currency
Canadian Dollar 4,689 1,366
Euro 32,284 38,354
Pound Sterling 11,851 1,764
Swedish Kroner 1,774 2,555
Swiss Franc 36,492 42,705
United States Dollar 28,588 40,628
Other currencies 15,985 15,504
131,663 142,876
9 Other receivables
2011 2010
CHF 000s CHF 000s
Advances to employees 868 878
Taxes refundable 504 497
Sundry receivables 2,708 2,912
4,080 4,287
The ageing of other receivables before provisions is as follows:
2011 2010
CHF 000s CHF 000s
Not past due 4,080 4,287
Other receivables are denominated in the following currencies:
2011 2010
CHF 000s CHF 000s
Currency
Euro 248 -
Swiss Franc 3,832 4,287
4,080 4,287
10 Prepayments and accrued income
2011 2010
CHF 000s CHF 000s
Prepayments 2,005 837
Advance payments to contractors 152 179
Accrued income 901 -
Accrued interest income 17 196
Other assets 8 8
3,083 1,220
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 21
11 Inventories
2011 2010
CHF 000s CHF 000s
Prepositioned relief items 3,158 1,220
Telecommunications equipment 190 167
Administration Stock 146 117
Other equipment 206 307
3,700 1,811
The cost of inventories recognised as expense and included in operating expenditure comprises:
2011 2010
CHF 000s CHF 000s
Telecommunications equipment 591 827
Other equipment 127 36
Prepositioned stock 3,669 6,001
4,387 6,864
12 Property, vehicles, other equipment and intangible assets
12.1 Property
2011 2010
Buildings Buildings
CHF 000s CHF 000s
Cost or valuation
Balance at 1 January 4,549 4,511
Additions - 38
Balance at 31 December 4,549 4,549
Accumulated depreciation and value adjustments
Balance at 1 January ( 1,219) ( 1,130)
Impairment losses ( 1,443) -
Depreciation charge for the year ( 89) ( 89)
Balance at 31 December ( 2,751) ( 1,219)
Net book value at 31 December 1,798 3,330
Net book value at 1 January 3,330 3,381
In 2011, the IFRC decided to relocate its Africa Zone Office from Johannesburg to Nairobi. As a result, the IFRC will
vacate its office building in Johannesburg during 2012, and will either sell the building or rent it to a third party. At
31 December 2011, the IFRC was still using the building, but on a significantly diminished basis. In February 2012, a
valuation by professional valuers using costs and market information gathered during the last quarter of 2011, indicated
that the recoverable amount of the building in a sale was less than the carrying amount. It is IFRC’s view that the
recoverable amount of the building rented to a third party would also be less than the carrying amount. The recoverable
amount represents the fair value less costs to sell determined using the Income Capitalisation Approach. Accordingly,
at 31 December 2011, the carrying amount of CHF 2,516 was reduced to the estimated recoverable amount of
CHF 1,073k. The resultant impairment loss of CHF 1,443k is recognised in the Consolidated Statement of
Comprehensive Income.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 22
12.2 Vehicles
2011 2010
Vehicles Vehicles
CHF 000s CHF 000s
Cost or valuation
Balance at 1 January 32,501 22,010
Additions 10,435 14,692
Disposals and write offs ( 7,451) ( 4,201)
Balance at 31 December 35,485 32,501
Accumulated depreciation and value adjustments
Balance at 1 January ( 8,178) ( 7,507)
Depreciation charge for the year ( 4,605) ( 3,351)
Disposals 3,910 2,680
Balance at 31 December ( 8,873) ( 8,178)
Net book value at 31 December 26,612 24,323
Net book value at 1 January 24,323 14,503
Vehicles additions include CHF 596k of contributed assets (2010: CHF Nil).
See note 30 (b) for details of amounts included in the above which are subject to operating leases as lessor.
12.3 Other equipment
2011 2010
Other
equipment
Other
equipment
CHF 000s CHF 000s
Cost or valuation
Balance at 1 January 5,100 5,020
Additions 1,738 430
Transfers 279 55
Disposals and write offs ( 366) ( 405)
Balance at 31 December 6,751 5,100
Accumulated depreciation and value adjustments
Balance at 1 January ( 3,737) ( 3,273)
Depreciation charge for the year ( 1,105) ( 876)
Disposals 319 412
Balance at 31 December ( 4,523) ( 3,737)
Net book value at 31 December 2,228 1,363
Net book value at 1 January 1,363 1,747
Other equipment primarily includes computer equipment, generators, rubhalls and office equipment.
Other equipment additions in 2011 include CHF Nil (2010: CHF 106k) of contributed assets.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 23
12.4 Intangible assets
Computer
software
Computer
software under
development
2011
Total
Computer
software
2010
Total
Computer
software
CHF 000s CHF 000s CHF 000s CHF 000s
Cost or valuation
Balance at 1 January 6,532 1,330 7,862 7,361
Additions 242 845 1,087 850
Transfers 1,702 ( 1,981) ( 279) ( 56)
Disposal and write offs ( 219) - ( 219) ( 293)
Balance at 31 December 8,257 194 8,451 7,862
Accumulated amortisation and value
adjustments
Balance at 1 January ( 5,044) - ( 5,044) ( 3,583)
Impairment losses - ( 162) ( 162) -
Amortisation charge for the year ( 1,574) - ( 1,574) ( 1,461)
Disposals 219 - 219 -
Balance at 31 December ( 6,399) ( 162) ( 6,561) ( 5,044)
Net book value at 31 December 1,858 32 1,890 2,818
Net book value at 1 January 1,488 1,330 2,818 3,778
In 2010 and 2011, the IFRC invested CHF 162k in developing Integrated Project Management System (IPMS)
computer software. Although the project has not been formally terminated, further investment in developing this
software to completion so that it may be brought into use and generate economic benefits for the IFRC has been
suspended indefinitely. Accordingly, at 31 December 2011, the carrying amount of CHF 162k was reduced to the
estimated recoverable amount of CHF Nil. The resultant impairment loss of CHF 162k is recognised in the
Consolidated Statement of Comprehensive Income. The remaining amortisation period of the impaired asset is three
years.
13 Accounts payable
2011 2010
CHF 000s CHF 000s
Suppliers 8,501 20,194
National societies 1,696 658
Payroll taxes payable 265 118
Other 1,135 1,581
11,597 22,551
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 24
Accounts payable to suppliers and national societies are denominated in the following currencies:
2011 2010
CHF 000s CHF 000s
Currency
Canadian Dollar 491 544
Euro 1,456 1,714
Pakistan Rupee - 965
Pound Sterling 441 1,226
Swiss Franc 4,326 7,583
United States Dollar 2,356 7,561
Other currencies 2,527 2,958
11,597 22,551
14 Accrued expenses
Accrued expenses are all denominated in Swiss Francs.
15 Employee benefit liabilities
2011 2010
CHF 000s CHF 000s
Staff vacation accrual 3,963 3,657
Provision for post employment benefits 28 40
Accruals for other short-term benefits 479 376
4,470 4,073
16 Provisions
2011 2010
CHF 000s CHF 000s
Current provisions
Operations 18,255 19,403
Project deficits 1,019 1,185
Restructuring - 638
19,274 21,226
Project 2011 2010
Operations deficits Restructuring Total Total
CHF 000s CHF 000s CHF 000s CHF 000s CHF 000s
Current provisions
Balance at 1 January 19,403 1,185 638 21,226 21,285
Unused amounts reversed - ( 60) ( 1,262) ( 1,322) ( 1,159)
Used during the year ( 19,403) ( 479) ( 442) ( 20,324) ( 18,941)
Additional provisions 18,255 373 1,066 19,694 20,041
Balance at 31 December 18,255 1,019 - 19,274 21,226
All provisions are current, and the IFRC expects to incur the resultant liabilities within the next year.
The ultimate outflow of economic benefits arising from project deficits will be determined by the IFRC’s ability to
cover the unfunded project expenditure through fund-raising activities.
2011 2010
CHF 000s CHF 000s
Accrued expenses 10,879 13,518
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 25
The operations provision principally includes the estimated costs of cash working advances with national societies that
have not been reported on by the reporting date (see also note 28 (a)), together with the estimated costs of other
operational liabilities that have been entered into at the reporting date, the timing or amount of which is uncertain.
The project deficits provision includes the estimated costs of covering project expenditure on individual field projects
where expenditure exceeds income from voluntary contributions that has been allocated to the projects at the reporting
date (see also note 18).
The restructuring provision at 31 December 2010, includes estimated costs of the reorganisation of the management
structure in Geneva.
17 Deferred income and prepaid contributions
2011 2010
Current liabilities CHF 000s CHF 000s
Deferred income 42,509 44,387
Statutory contributions received in advance 202 96
Service income received in advance 803 -
43,514 44,483
2011 2010
Non-current liabilities CHF 000s CHF 000s
Deferred income 6,798 3,408
The IFRC is not in a position to reliably determine in which future periods contributions deferred under the accounting
policy set out in note 2.16 (b) will be recognised as income in the Consolidated Statement of Comprehensive Income.
Accordingly, all amounts deferred under that accounting policy are included in Current liabilities although some
amounts may ultimately be recognised as income more than one year after the period end date. Non-current liabilities
includes non-government contributions that are earmarked for use in a future period more than one year from the period
end date.
18 Funds held for field operations
Earmarked balances
2011 2010
CHF 000s CHF 000s
Field operations with temporary deficit financing ( 2,770) ( 3,832)
Donor-restricted contributions 295,841 369,632
293,071 365,800
Field operations are considered as having a deficit financing as soon as the contributions pledged do not cover the
expenditure incurred.
In 2011, a total of CHF 24,601k (2010: CHF 5,153k) was reimbursed to donors in respect of voluntary contributions
received in previous years. Out of this total an amount of CHF 18,612k was exceptionally reimbursed to the American
Red Cross Society in respect of voluntary contributions received for the 2010 Haiti Earthquake operation, when the
IFRC agreed to hand over part of the operation to the American Red Cross Society, and an amount of CHF 3,108k was
exceptionally reimbursed to the Canadian Red Cross Society when the IFRC agreed to reimburse the unspent balance
on a voluntary contribution so that the Canadian Red Cross Society could reallocate the funds for a different purpose
within the same IFRC operation.
In 2010, out of the total CHF 5,153k reimbursed, CHF 2,566k were reimbursed to the American Red Cross Society in
respect of voluntary contributions received for the 2004 Bay of Bengal Earthquake and Tsunami housing reconstruction
partnership with the IDA in Sri Lanka (see note 21).
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 26
19 Designated reserves
Self Statutory Actuarial Specific 2011
insurance meetings valuations projects Total
2011 CHF 000s CHF 000s CHF 000s CHF 000s CHF 000s
Balance at 1 January 1,175 1,140 2,762 829 5,906
Used during the year ( 75) ( 2,367) ( 2,762) ( 829) ( 6,033)
Allocations during the year 217 1,227 - - 1,444
Balance at 31 December 1,317 - - - 1,317
Self Statutory Actuarial Specific 2010
insurance meetings valuations projects Total
2010 CHF 000s CHF 000s CHF 000s CHF 000s CHF 000s
Balance at 1 January 1,060 840 4,536 - 6,436
Used during the year ( 128) - ( 1,774) - ( 1,902)
Allocations during the year 243 300 - 829 1,372
Balance at 31 December 1,175 1,140 2,762 829 5,906
20 Voluntary contributions, net
Goods Services 2011 2010
Cash in-kind in-kind Total Total
CHF 000s CHF 000s CHF 000s CHF 000s CHF 000s
National Societies 160,702 11,132 12,922 184,756 395,602
Governments 78,715 - - 78,715 74,245
International Organisations 3,143 - - 3,143 3,274
Others 24,558 - - 24,558 28,180
267,118 11,132 12,922 291,172 501,301
21 Contribution to other organisation reimbursed
In 2006, as part of the 2004 Bay of Bengal Earthquake and Tsunami operation the IFRC entered into a partnership
agreement with the International Development Association (IDA). Under the terms of this agreement, in 2006 and 2008
the IFRC provided a total of CHF 22,800k to the IDA to work in partnership with the Government of Sri Lanka, in
order to help beneficiaries reconstruct their own houses following destruction of their previous dwellings by the
tsunami. Following completion of the housing reconstruction programme, in 2010 the IDA returned CHF 7,036k
(2011: CHF Nil) of unused funds to the IFRC. These funds are recognised as income in the 2010 Consolidated
Statement of Comprehensive Income.
22 Services income
2011 2011 2011 2010
Unrestricted Restricted Total Total
CHF 000s CHF 000s CHF 000s CHF 000s
Service agreements 3 29,151 29,154 45,342
PSSR on in-kind contributions - 1,105 1,105 2,619
Project generated income - 92 92 501
3 30,348 30,351 48,462
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 27
23 Other income
24 Operating expenditure in-kind
The following in-kind contributions are included within total operating expenditure.
2011 2011 2011 2010
Goods Services Total Total
CHF 000s CHF 000s CHF 000s CHF 000s
Employee benefit costs - 11,543 11,543 10,850
Relief supplies 11,132 - 11,132 34,606
Transportation and storage - 1,379 1,379 8,666
11,132 12,922 24,054 54,122
25 Employee benefit costs
2011 2010
CHF 000s CHF 000s
Wages and salaries 122,970 129,962
Contributed services 11,552 10,835
Termination benefits 71 882
Social security costs 5,621 2,850
Pension costs - defined benefit plans 13,272 9,731
153,486 154,260
26 Pension costs – defined benefit plans
The amounts recognised in the Consolidated Statement of Financial Position are determined as follows:
2011 2010
CHF 000s CHF 000s
Present value of funded obligations ( 187,425) ( 175,322)
Fair value of plan assets 137,746 132,164
( 49,679) ( 43,158)
Unrecognised actuarial losses 47,919 45,920
Amount per Consolidated Statement of Financial Position ( 1,760) 2,762
2011 2010
CHF 000s CHF 000s
Hosted programme membership fees 1,292 1,404
Sale of IFRC materials 26 25
Other income 1,364 1,645
Surplus on sale of property, plant and equipment, net 943 462
3,625 3,536
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 28
Change in defined benefit obligation during the year:
2011 2010
CHF 000s CHF 000s
Defined benefit obligation 1 January 175,322 160,462
Current service cost 10,698 8,873
Interest cost 4,594 4,883
Employee contributions 5,096 4,896
Benefits paid ( 9,549) ( 13,885)
Administration expenses ( 543) ( 501)
Liability loss/(gain)due to experience 817 ( 970)
Liability loss due to assumption changes 990 11,564
Defined benefit obligation 31 December 187,425 175,322
Change in plan assets during the year:
2011 2010
CHF 000s CHF 000s
Fair value of plan assets at 1 January 132,164 134,182
Expected return on plan assets 5,664 5,742
Actuarial gains on plan assets ( 3,977) ( 6,227)
Administration expenses ( 543) ( 501)
Employer contributions 8,891 7,957
Employee contributions 5,096 4,896
Benefits paid ( 9,549) ( 13,885)
Fair value of plan assets at 31 December 137,746 132,164
During the year the IFRC made additional contributions amounting CHF 676k (2010: CHF Nil) in order to fund
anticipated additional obligations arising from salary increments that, either as a result of promotion or as a result of
equity adjustments, were outside the ordinary annual salary increment awarded. In previous periods, such obligations
have been directly funded by the pension fund.
The amounts recognised in the Consolidated Statement of Comprehensive Income are as follows:
2011 2010
CHF 000s CHF 000s
Current service cost 10,698 8,873
Interest cost 4,594 4,883
Expected return on plan assets ( 5,664) ( 5,742)
Amortisation of net unrecognised gain 3,785 1,717
Total included in staff costs 13,413 9,731
The actual return on plan assets was CHF 1,687k (2010 loss: CHF 485k). Expected employer contributions for 2012
amount to CHF 8,340k.
The principal actuarial assumptions used were as follows:
2011 2010
Discount rate 2.30% 2.70%
Price inflation 1.25% 1.50%
Expected return on plan assets 3.00% 4.25%
Future salary increases 1.75% 2.00%
Future pension increases 0.80% 1.00%
The expected return on plan assets is calculated as the weighted average by target allocation of estimated returns for
each category of asset.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 29
The percentage of total plan assets invested in each major asset category at 31 December was:
2011 2010
Equity securities 46.8% 39.0%
Debt securities 40.8% 50.9%
Real estate 0.3% 0.6%
Other 12.1% 9.5%
Total 100.0% 100.0%
2011 2010
CHF 000s CHF 000s
Experience loss on plan assets ( 3,977) ( 6,227)
Experience (loss)/gain on plan liabilities ( 817) 970
2011 2010 2009 2008 2007
CHF 000s CHF 000s CHF 000s CHF 000s CHF 000s
Present value of funded obligations ( 187,425) ( 175,322) ( 160,462) ( 146,236) ( 137,766)
Fair value of plan assets 137,746 132,164 134,182 108,492 137,336
Deficit in the plan ( 49,679) ( 43,158) ( 26,280) ( 37,744) ( 430)
Experience (losses)/gains on plan assets ( 3,977) ( 6,227) 18,914 ( 37,688) ( 4,894)
Experience (losses)/gains on plan liabilities ( 817) 970 ( 5,287) - ( 8,875)
As explained in note 2.18 (a), pension obligations are covered by independent funds which are held in a single, separate
legal entity that is governed by Swiss law. These independent funds are fully funded through payments, as determined
by periodic actuarial calculations, in accordance with Swiss law. According to the latest actuarial calculations, in
accordance with Swiss law, the independent pension funds were 102.3% funded at 31 December 2011 and 103.7%
funded at 31 December 2010.
27 Depreciation and amortisation
2011 2010
CHF 000s CHF 000s
Depreciation of property, plant and equipment 5,799 4,316
Amortisation of intangible assets - computer software 1,574 1,461
Impairment loss on building 1,443 -
Impairment loss on intangible assets - computer software 162 -
8,978 5,777
28 Provisions for operations and contributions to national societies
In implementing its activities in the ordinary course of its business, the IFRC advances funds to member Red Cross and
Red Crescent national societies. Two mechanisms are used to advance funds to member national societies for the
implementation of activities – cash working advances and cash contributions.
(a) Provisions for operations
The IFRC provides cash working advances to national societies for them to implement activities on behalf of the IFRC.
Amounts advanced are recognised as receivables until such time as recipient national societies report to the IFRC on
their use of the funds. As indicated in note 2.14 (b), a provision is recognised for the value of working advances which
has not been reported on by the recipient national societies, and the related expense is recorded in Provisions for
operations. When recipient national societies report on their use of the funds, the provision is reversed, and the expense
is reclassified according to its nature.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 30
(b) Contributions to national societies
The IFRC makes cash contributions to fund the activities of member national societies. Such contributions are
recognised as operational expenditure as they are incurred.
29 Net finance income/(expense)
Financial assets at fair value through profit or loss:
Fair value gain on global bond fund 1,359 - 1,359 24
Fair value loss on global equity fund ( 2,328) - ( 2,328) ( 260)
Interest income on global bond 1,912 - 1,912 -
Dividend income global equity 655 - 655 472
1,598 - 1,598 236
30 Leases
a) Operating leases as lessee
Cancellable operating leases
The IFRC leases warehouses, office property and means of transport under cancellable operating leases. The leases
may, typically, run for a period up to five years, with an option to renew the lease at the end of that period. Lease
payments are increased annually to reflect market rentals.
During the current year CHF 13,611k (2010: CHF 17,400k) were recognised as operating lease rental expense in the
Consolidated Statement of Comprehensive Income, as follows:
2011 2010
CHF 000s CHF 000s
Land, buildings and equipment 11,234 12,829
Means of transport 2,377 4,571
13,611 17,400
2011 2011 2011 2010
Unrestricted Restricted Total Total
CHF 000s CHF 000s CHF 000s CHF 000s
Interest income on bank deposits 911 ( 190) 721 1,049
Interest income on global bond fund 1,912 - 1,912 -
Dividend income on global equity fund 655 - 655 472
Finance income 3,478 ( 190) 3,288 1,521
Interest expense on loan to 3rd party - ( 15) ( 15) -
Net foreign exchange losses ( 988) ( 982) ( 1,970) ( 6,640)
Net change in fair value of financial
assets at fair value through profit or loss ( 969) - ( 969) ( 236)
Finance expense ( 1,957) ( 997) ( 2,954) ( 6,876)
Net finance income/(expense) 1,521 ( 1,187) 334 ( 5,355)
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 31
Non-cancellable operating lease
The IFRC leases its Secretariat Headquarters in Geneva under a non-cancellable operating lease with no purchase
option. Future minimum lease payments payable under this lease are as follows:
Non-cancellable operating lease rentals
2011 2010
CHF 000s CHF 000s
Amounts falling due within one year 227 227
Amounts falling due in 2 to 5 years 908 908
Amounts falling due after more than five years 7,041 7,268
8,176 8,403
b) Operating leases as lessor
The IFRC leases vehicles to third parties under operating leases. The leases which run for periods up to five years are
cancellable upon one month’s notice at any time during the lease period. Leases for periods of less than five years may
be renewed, however, the maximum lease period is five years.
In 2011, the following amounts have been recognised as income in the Consolidated Statement of Comprehensive
Income:
2011 2010
CHF 000s CHF 000s
Rental of vehicles to third parties 4,962 2,227
Sub-leases of accommodation to staff 52 278
5,014 2,505
Vehicles (see note 12.2) includes the following amounts which are subject to leases as lessor:
2011 2010
CHF 000s CHF 000s
Gross carrying amount 12,617 8,287
Accumulated depreciation ( 3,040) ( 2,270)
Net book value 9,577 6,017
Depreciation charge for the year 1,284 924
31 Taxes
The IFRC is exempt from taxes in Switzerland and most countries in which its delegations are based.
32 Programme and services support recovery
In keeping with the IFRC’s principle of full cost recovery, an additional 6.5% is added to the cost of each operation as a
contribution to fund the indirect costs of providing support services, such as human resources, finance, and information
technology services, essential to the success of operations. The support for 2011 amounted to CHF 19,876k
(2010: CHF 24,661k) and is added to unrestricted reserves.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 32
33 Other indirect cost recovery, net
2011 2011 2011
CHF 000s CHF 000s CHF 000s
2011 Unrestricted Restricted Total
Fees
Pledge earmarking and reporting fees ( 1,924) 1,924 -
Corporate donation fees ( 307) 307 -
IFRC at the UN Inc. service fees ( 190) 190 -
Hosted programme service fees ( 254) 254 -
Sub-total - Fees ( 2,675) 2,675 -
Finance charges
Vehicle fleet finance charges ( 442) 442 -
Hosted programme finance charges ( 7) 7 -
Specific fund finance charges 71 ( 71) -
Sub-total - Finance charges ( 378) 378 -
Other
Voluntary contributions to hosted programmes 102 ( 102) -
Vehicle fleet rental charges 250 ( 250) -
Sub-total - Other 352 ( 352) -
Total ( 2,701) 2,701 -
2010 2010 2010
CHF 000s CHF 000s CHF 000s
2010 Unrestricted Restricted Total
Fees
Pledge earmarking and reporting fees ( 1,468) 1,468 -
Corporate donation fees ( 474) 474 -
IFRC at the UN Inc. service fees ( 274) 274 -
Hosted programme service fees ( 242) 242 -
Sub-total - Fees ( 2,458) 2,458 -
Finance charges
Vehicle fleet finance charges ( 336) 336 -
Specific fund finance charges 12 ( 12) -
Sub-total - Finance charges ( 324) 324 -
Other
Voluntary contributions to hosted programmes 217 ( 217) -
Vehicle fleet rental charges 299 ( 299) -
Sub-total - Other 516 ( 516) -
Total ( 2,266) 2,266 -
In keeping with the IFRC’s principle of full cost recovery, fees and other charges are made to operations for specific
services provided in addition to the essential services funded by programme and service support recovery (see also note
32). Such fees include specific logistics service fees; pledge earmarking and reporting fees; and fees to business units
with specific support requirements such as hosted programmes and the IFRC at UN Inc. For 2011 these fees amounted
to CHF 2,675k (2010: CHF 2,458k) and are added to unrestricted reserves.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 33
The IFRC levies a finance charge on working capital provided to its vehicle fleet operation, and pays finance charges to
specific funds where the IFRC is holding cash on behalf of those funds. The net finance expense for 2011 amounted to
CHF 378k (2010: CHF 324k) and is added to unrestricted reserves.
The IFRC sometimes makes voluntary contributions to hosted programmes and other specific funds. Such
contributions, which for 2011 amounted to CHF 102k (2010: CHF 217k), are deducted from unrestricted reserves and
added to Funds held for field operations (restricted reserves). The IFRC’s fleet operation rents vehicles to operations,
including to some operations that are funded by unrestricted income. For 2011 these vehicle rentals amounted to
CHF 250k (2010 CHF: 299k) which are deducted from unrestricted reserves and added to Funds held for field
operations (restricted reserves).
34 Related parties
a) Identity of related parties
Parties related to the IFRC include the General Assembly, Governing Board, Finance Commission, the IFRC at the UN
Inc., the Foundation and the IFRC’s jointly controlled operations, all of which are described in notes 1 and 2.3.
Other parties related to the IFRC include the Masambo Fund with the Secretary General and other senior managers
sitting on its governing board; representatives comprising the Standing Commission; individual members of the
Governing Board and Finance Commission together with close members of their families or households; key
management personnel; and both of the IFRC’s retirement plans which are independent funds that constitute separate
legal entities.
The Masambo Fund is a special Foundation established as a separate legal entity. The principal activity of the
Masambo Fund is to raise and provide funding, through national Red Cross and Red Crescent societies or other entities,
for access to life saving drugs (including anti-retroviral therapy) to Red Cross and Red Crescent staff and volunteers to
ensure the survival of humanitarian workers which is essential to maintain the national societies’ continuity and
capacity to deliver humanitarian assistance. The IFRC has no beneficial interest in the net assets of the Fund, except
upon liquidation of the Fund when the net assets of the Fund shall be transferred to the IFRC for use in support of
HIV/AIDS programmes.
The Standing Commission comprises representatives of the IFRC, the ICRC and national Red Cross and Red Crescent
Societies. Its principal activities include organisation of the next International Conference and the next Council of
Delegates. In between International Conferences, the Standing Commission works to encourage and further the
implementation of resolutions of the International Conference.
Key management personnel are persons having authority and responsibility for planning, directing and controlling the
activities of the IFRC. This includes the Secretary General, as noted above, Under Secretaries General and Directors of
Zone. Close members of their families or households are also parties related to the IFRC.
The International Conference of the Red Cross and Red Crescent (the International Conference) is the supreme
deliberative body of the International Red Cross and Red Crescent Movement. The Council of Delegates is the body
where representatives of all components of the Movement meet to discuss matters which concern the Movement as a
whole. Neither the International Conference nor the Council of Delegates are considered parties related to the IFRC.
b) Key management compensation
The salaries and benefits of the Secretary General, Under-Secretaries General and Directors of Zone of the IFRC are set
by the Governing Board. Their total benefits amounted to CHF 2,821k (2010: CHF 4,600k) made up as follows:
2011 2010
CHF 000s CHF 000s
Short-term employee benefits 2,320 4,064
Post-employment benefits 501 536
2,821 4,600 No other salaries or benefits (e.g. fringe benefits or loans) were granted to them.
The IFRC has a Code of Conduct for all Staff, including members of the Governing Board, the Finance Commission,
the Standing Commission of the Red Cross Red Crescent Movement as well as the Secretary General and other key
management. Under the Code of Conduct, staff are required to disclose any potential conflict of interest to the Human
Resources Department or the Risk Management and Audit Department of the IFRC Secretariat.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 34
c) Transactions with related parties
Details of transactions between the IFRC and its pension plans are provided in note 26. Details of transactions between
the IFRC and key management personnel are provided in note 34 (b). Details of transactions with other parties related
to the IFRC are provided below. All transactions were made on an terms equivalent to those that prevail in arm’s length
transactions.
During the year, the IFRC received CHF Nil (2010: CHF Nil) from the Foundation. At 31 December 2011, the IFRC
had an outstanding receivable due from the Foundation, amounting to CHF 186k (2010: CHF 185k).
During the year, the IFRC received CHF 3,755k (2010 CHF: 4,935k) cash voluntary contribution income from the
IFRC at the UN Inc. At 31 December 2011, the IFRC had an outstanding receivable due from the IFRC at the UN Inc.
amounting to CHF 472k (2010: CHF 320k).
During the year, the IFRC made voluntary contributions totalling CHF102k (2010: CHF 217k) to its jointly controlled
operations. At 31 December 2011 and 31 December 2010 there were no balances arising from transactions with jointly
controlled operations.
During the year, the IFRC received voluntary contributions on behalf of the Masambo Fund totalling CHF 79k
(2010: CHF 50k). At 31 December 2011, the IFRC had an outstanding payable due to the Masambo Fund amounting to
CHF 91k (2010: CHF 77k).
During the year, the IFRC transferred CHF 175k (2010: CHF 200k) to the Standing Commission as a contribution
towards the operational costs of the Standing Commission for the year. At 31 December 2011, the IFRC had an
outstanding payable due to the Standing Commission amounting to CHF 52k (2010: CHF 7k).
Other than compensation arising in the ordinary course of business as disclosed above, there were no transactions with
key management personnel. No members of the Governing Board or the Finance Commission, or any other person
related or connected by business to them, have received any remuneration or other compensation from the IFRC during
the year.
35 Capital commitments
Capital expenditure contracted for at the 31 December 2011 but not yet incurred, amounted to CHF 656k
(2010: CHF 3,299k).
36 Contingencies
a) Contingent asset
In June 2011, the IFRC entered into a four year partnership agreement with the United Kingdom Department for
International Development (DFID). Under the terms of the partnership agreement the IFRC is due to receive grant
funding amounting to GBP 28,000k (equivalent to CHF 40,880k at 31 December 2011 exchange rate). The grant is due
in two tranches, a first tranche of GBP 12,000k payable for the period from 1 April 2011 to 31 December 2012 which is
recognised as a pledge receivable in the Consolidated Statement of Financial Position and as a voluntary contribution in
the Consolidated Statement of Total Comprehensive Income, and a second tranche of GBP 16,000k payable for the
period from 1 January 2013 to 31 December 2014. Under the terms of the partnership agreement, IFRC’s performance
will be subject to a mid-term review to be completed prior to the end of 2012. Payment of the second GBP 16,000k
tranche of funding (equivalent to CHF 23,360k at 31 December 2011 exchange rate) is conditional upon satisfactory
performance being confirmed by the mid-term review. Accordingly the second tranche of the grant is considered a
contigent asset and has not been recognised as a receivable or as income in these consolidated financial statements.
The present value of the contingent asset, calculated by applying a five year United Kingdom government bonds
discount rate of 1.75% to the outstanding amount of GBP 16,000k and translating to CHF at the 31 December 2011
foreign exchange rate, amounts to CHF 21,915k.
b) Contingent liabilities
From time to time, usually as part of a restructuring plan, the IFRC terminates staff contracts prior to agreed upon
contract end dates. Terminated staff sometimes bring actions against the IFRC for amounts over and above the amounts
paid by the IFRC upon termination. Whilst liability is not admitted, the IFRC is defending a number of such actions.
Based on legal advice, the IFRC’s management does not expect the outcome of these actions to have a material impact
on the IFRC’s consolidated financial position.
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 35
In the interest of not prejudicing the outcomes of these actions, the IFRC has not disclosed all of the information
required by IAS 37 Provisions, Contingent Liabilities and Contingent Assets.
37 Regional and activity level reporting
For purposes of monitoring and allocating resources, income and expenditure are reported to the Secretary General by
type of Appeal launched by the IFRC and by geographical zone in which the IFRC operates. Amounts reported are
obtained directly from the IFRC’s financial system and are calculated on an accounting basis consistent with the
accounting policies adopted in preparing these consolidated financial statements.
a) Reporting by type of appeal
2011 2010
CHF 000s CHF 000s
Restricted income
Development programmes 133,063 131,792
Disaster Response programmes 136,613 368,430
Tsunami programme ( 3,999) 3,630
Hosted projects 3,411 6,756
Other projects 20,144 2,251
Supplementary Services 27,258 43,514
316,490 556,373
2011 2010
CHF 000s CHF 000s
Restricted expenditure
Development programmes 121,635 136,886
Disaster Response programmes 205,865 240,199
Tsunami programme 10,137 41,254
Hosted projects 6,067 5,737
Other projects 20,535 4,600
Supplementary Services 25,814 43,142
390,053 471,818 b) Reporting by geographical zone
2011 2010
CHF 000s CHF 000s
Restricted income
Africa 85,928 72,649
Americas 38,515 258,407
Asia Pacific 109,833 140,274
Europe & Central Asia 20,500 18,847
MENA 17,161 7,545
Global Programmes 44,553 58,651
316,490 556,373
2011 2010
CHF 000s CHF 000s
Restricted expenditure
Africa 74,091 75,602
Americas 101,729 124,777
Asia Pacific 135,064 185,671
Europe & Central Asia 17,443 19,859
MENA 15,159 8,066
Global Programmes 46,567 57,843
390,053 471,818
INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA
NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS
FOR THE YEAR ENDED 31 DECEMBER 2011
Page 36
38 Subsequent events
No events have occurred since the balance sheet date that would have a material impact on assets, liabilities, income,
expenditure or cash flows reported in these consolidated financial statements.