INTERNATIONAL FEDERATION OF RED CROSS AND RED CRESCENT SOCIETIES, GENEVA NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEAR ENDED 31 DECEMBER 2022 Page 20
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2.5 Designated reserves (continued) Specific projects In keeping with the IFRC’s principle of full cost recovery (see note 3.1), the direct costs of programmes and services are
subject to indirect cost recovery to fund the costs of providing indirect 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.
In 2022, expenditure on both the Covid-19 Pandemic and the Ukraine and impacted countries crisis operations was in
excess of CHF 50,000k. In 2021, expenditure on the Covid-19 Pandemic operation was in excess of CHF 50,000k. At the
end of 2022, the balance on the Specific projects reserve was CHF 15,700k (2021: CHF 14,000k).
Major building works reserve In March 2016, the IFRC signed an agreement with
Fondation des Immeubles pour les Organisations Internationales (FIPOI) for a 50 year interest free loan to be used by the IFRC to construct new office premises. Under this agreement,
the IFRC has an obligation to undertake regular building maintenance and, as required by the agreement, set up a
designated reserve for major building works upon acceptance of the new building. The IFRC makes an annual allocation
corresponding to 0.75% of the building works value. Usage of the reserve is restricted to:
•
planned obsolescence including major renovation and replacement works;
•
emergency repairs.
