# L_2019073EN.01009301.xml

| 15.3.2019 | EN | Official Journal of the European Union | L 73/93 |
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15.3.2019

EN

Official Journal of the European Union

L 73/93

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COMMISSION REGULATION (EU) 2019/412

of 14 March 2019

on amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Accounting Standards 12 and 23 and International Financial Reporting Standards 3 and 11

(Text with EEA relevance)

THE EUROPEAN COMMISSION,

Having regard to the Treaty on the Functioning of the European Union,

Having regard to Regulation (EC) No 1606/2002 of the European Parliament and of the Council of 19 July 2002 on the application of international accounting standards (1), and in particular Article 3(1) thereof,

Whereas:

| (1) | By Commission Regulation (EC) No 1126/2008 (2) certain international standards and interpretations that were in existence at 15 October 2008 were adopted. |
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(1)

By Commission Regulation (EC) No 1126/2008 (2) certain international standards and interpretations that were in existence at 15 October 2008 were adopted.

| (2) | On 12 December 2017, the International Accounting Standards Board (IASB) published Annual Improvements to International Financial Reporting Standards 2015-2017 Cycle (the annual improvements), in the framework of its regular improvement process which aims at streamlining and clarifying the standards. The objective of the annual improvements is to address non-urgent, but necessary issues discussed by the IASB during the project cycle on areas of inconsistency in International Financial Reporting Standards or where clarification of wording is required. |
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(2)

On 12 December 2017, the International Accounting Standards Board (IASB) published Annual Improvements to International Financial Reporting Standards 2015-2017 Cycle (the annual improvements), in the framework of its regular improvement process which aims at streamlining and clarifying the standards. The objective of the annual improvements is to address non-urgent, but necessary issues discussed by the IASB during the project cycle on areas of inconsistency in International Financial Reporting Standards or where clarification of wording is required.

| (3) | Following the consultations with the European Financial Advisory Group, the Commission concludes that the amendments to International Accounting Standard (IAS) 12 Income Taxes, IAS 23 Borrowing Costs, International Financial Reporting Standard (IFRS) 3 Business Combinations and IFRS 11 Joint Arrangements meet the criteria for adoption set out in Article 3(2) of Regulation (EC) No 1606/2002. |
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(3)

Following the consultations with the European Financial Advisory Group, the Commission concludes that the amendments to International Accounting Standard (IAS) 12 Income Taxes, IAS 23 Borrowing Costs, International Financial Reporting Standard (IFRS) 3 Business Combinations and IFRS 11 Joint Arrangements meet the criteria for adoption set out in Article 3(2) of Regulation (EC) No 1606/2002.

| (4) | Regulation (EC) No 1126/2008 should therefore be amended accordingly. |
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(4)

Regulation (EC) No 1126/2008 should therefore be amended accordingly.

| (5) | The measures provided for in this Regulation are in accordance with the opinion of the Accounting Regulatory Committee, |
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(5)

The measures provided for in this Regulation are in accordance with the opinion of the Accounting Regulatory Committee,

HAS ADOPTED THIS REGULATION:

Article 1

| (a) | International Accounting Standard (IAS) 12 Income Taxes is amended as set out in the Annex to this Regulation; |
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(a)

International Accounting Standard (IAS) 12 Income Taxes is amended as set out in the Annex to this Regulation;

| (b) | IAS 23 Borrowing Costs is amended as set out in the Annex to this Regulation; |
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(b)

IAS 23 Borrowing Costs is amended as set out in the Annex to this Regulation;

| (c) | International Financial Reporting Standard (IFRS) 3 Business Combinations is amended as set out in the Annex to this Regulation; |
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(c)

International Financial Reporting Standard (IFRS) 3 Business Combinations is amended as set out in the Annex to this Regulation;

| (d) | IFRS 11 Joint Arrangements is amended as set out in the Annex to this Regulation. |
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(d)

IFRS 11 Joint Arrangements is amended as set out in the Annex to this Regulation.

Article 2

Each company shall apply the amendments referred to in Article 1, at the latest, as from the commencement date of its first financial year starting on or after 1 January 2019.

Article 3

This Regulation shall enter into force on the twentieth day following that of its publication in the Official Journal of the European Union.

This Regulation shall be binding in its entirety and directly applicable in all Member States.

Done at Brussels, 14 March 2019.

For the Commission

The President

Jean-Claude JUNCKER

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(1)  
  OJ L 243, 11.9.2002, p. 1.

1

(2)  Commission Regulation (EC) No 1126/2008 of 3 November 2008 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council (OJ L 320, 29.11.2008, p. 1).

2

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ANNEX

Annual Improvements to IFRS® Standards 2015–2017 Cycle

Amendments to

IFRS 3 Business Combinations

Paragraphs 42A and 64O are added.

Additional guidance for applying the acquisition method to particular types of business combinations

A business combination achieved in stages

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| 42A | When a party to a joint arrangement (as defined in IFRS 11 Joint Arrangements) obtains control of a business that is a joint operation (as defined in IFRS 11), and had rights to the assets and obligations for the liabilities relating to that joint operation immediately before the acquisition date, the transaction is a business combination achieved in stages. The acquirer shall therefore apply the requirements for a business combination achieved in stages, including remeasuring its previously held interest in the joint operation in the manner described in paragraph 42. In doing so, the acquirer shall remeasure its entire previously held interest in the joint operation. |
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42A

EFFECTIVE DATE AND TRANSITION

Effective date

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| 64O | Annual Improvements to IFRS Standards 2015–2017 Cycle, issued in December 2017, added paragraph 42A. An entity shall apply those amendments to business combinations for which the acquisition date is on or after the beginning of the first annual reporting period beginning on or after 1 January 2019. Earlier application is permitted. If an entity applies those amendments earlier, it shall disclose that fact. |
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64O

Amendments to

IFRS 11 Joint Arrangements

Accounting for acquisitions of interests in joint operations

Accounting for acquisitions of interests in joint operations

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| B33CA | A party that participates in, but does not have joint control of, a joint operation might obtain joint control of the joint operation in which the activity of the joint operation constitutes a business as defined in IFRS 3. In such cases, previously held interests in the joint operation are not remeasured.
  ... |
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B33CA

A party that participates in, but does not have joint control of, a joint operation might obtain joint control of the joint operation in which the activity of the joint operation constitutes a business as defined in IFRS 3. In such cases, previously held interests in the joint operation are not remeasured.

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EFFECTIVE DATE

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| C1AB | Annual Improvements to IFRS Standards 2015–2017 Cycle, issued in December 2017, added paragraph B33CA. An entity shall apply those amendments to transactions in which it obtains joint control on or after the beginning of the first annual reporting period beginning on or after 1 January 2019. Earlier application is permitted. If an entity applies those amendments earlier, it shall disclose that fact. |
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C1AB

Annual Improvements to IFRS Standards 2015–2017 Cycle

Amendments to

Amendments to

IAS 12 Income Taxes

IAS 12 Income Taxes

Paragraphs 57A and 98I are added, the heading of the example below paragraph 52B is amended and paragraph 52B is deleted.

MEASUREMENT

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| 52B | [Deleted] |
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52B

[Deleted]

Example illustrating paragraphs 52A and 57A

Example illustrating paragraphs 52A and 57A

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RECOGNITION OF CURRENT AND DEFERRED TAX

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| 57A | An entity shall recognise the income tax consequences of dividends as defined in IFRS 9 when it recognises a liability to pay a dividend. The income tax consequences of dividends are linked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity shall recognise the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events. |
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57A

An entity shall recognise the income tax consequences of dividends as defined in IFRS 9 when it recognises a liability to pay a dividend. The income tax consequences of dividends are linked more directly to past transactions or events that generated distributable profits than to distributions to owners. Therefore, an entity shall recognise the income tax consequences of dividends in profit or loss, other comprehensive income or equity according to where the entity originally recognised those past transactions or events.

EFFECTIVE DATE

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| 98I | Annual Improvements to IFRS Standards 2015–2017 Cycle, issued in December 2017, added paragraph 57A and deleted paragraph 52B. An entity shall apply those amendments for annual reporting periods beginning on or after 1 January 2019. Earlier application is permitted. If an entity applies those amendments earlier, it shall disclose that fact. When an entity first applies those amendments, it shall apply them to the income tax consequences of dividends recognised on or after the beginning of the earliest comparative period. |
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98I

Annual Improvements to IFRS Standards 2015–2017 Cycle

Amendments to

Amendments to

IAS 23 Borrowing Costs

IAS 23 Borrowing Costs

Paragraph 14 is amended, and paragraphs 28A and 29D are added.

RECOGNITION

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Borrowing costs eligible for capitalisation

Borrowing costs eligible for capitalisation

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| 14. | To the extent that an entity borrows funds generally and uses them for the purpose of obtaining a qualifying asset, the entity shall determine the amount of borrowing costs eligible for capitalisation by applying a capitalisation rate to the expenditures on that asset. The capitalisation rate shall be the weighted average of the borrowing costs applicable to all borrowings of the entity that are outstanding during the period. However, an entity shall exclude from this calculation borrowing costs applicable to borrowings made specifically for the purpose of obtaining a qualifying asset until substantially all the activities necessary to prepare that asset for its intended use or sale are complete. The amount of borrowing costs that an entity capitalises during a period shall not exceed the amount of borrowing costs it incurred during that period. |
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14.

14.

To the extent that an entity borrows funds generally and uses them for the purpose of obtaining a qualifying asset, the entity shall determine the amount of borrowing costs eligible for capitalisation by applying a capitalisation rate to the expenditures on that asset. The capitalisation rate shall be the weighted average of the borrowing costs applicable to all borrowings of the entity that are outstanding during the period. However, an entity shall exclude from this calculation borrowing costs applicable to borrowings made specifically for the purpose of obtaining a qualifying asset until substantially all the activities necessary to prepare that asset for its intended use or sale are complete. The amount of borrowing costs that an entity capitalises during a period shall not exceed the amount of borrowing costs it incurred during that period.

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TRANSITIONAL PROVISIONS

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| 28A | Annual Improvements to IFRS Standards 2015–2017 Cycle, issued in December 2017, amended paragraph 14. An entity shall apply those amendments to borrowing costs incurred on or after the beginning of the annual reporting period in which the entity first applies those amendments. |
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28A

Annual Improvements to IFRS Standards 2015–2017 Cycle

EFFECTIVE DATE

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| 29D | Annual Improvements to IFRS Standards 2015–2017 Cycle, issued in December 2017, amended paragraph 14 and added paragraph 28A. An entity shall apply those amendments for annual reporting periods beginning on or after 1 January 2019. Earlier application is permitted. If an entity applies those amendments earlier, it shall disclose that fact. |
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29D

Annual Improvements to IFRS Standards 2015–2017 Cycle

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