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I Acts whose publication is obligatory

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            COMMISSION REGULATION (EC) No 211/2005

of 4 February 2005         

amending Regulation (EC) No 1725/2003 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards International Financial Reporting Standards (IFRS) 1 and 2 and International Accounting Standards (IASs) No 12, 16, 19, 32, 33, 38 and 39

(Text with EEA relevance)

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

Having regard to the Treaty establishing the European Community.

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:

HAS ADOPTED THIS REGULATION:

Article 1

The Annex to Regulation (EC) No 1725/2003 is amended as follows:

Article 2

This Regulation shall enter into force on the third day following 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, 4 February 2005.

For the Commission

Charlie McCREEVY            

Member of the Commission

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

(2)OJ L 261, 13.10.2003, p. 1. Regulation as last amended by Regulation (EC) No 2238/2004 (OJ L 394, 31.12.2004, p. 1).

(3)OJ L 141, 11.6.1993, p. 27. Directive as last amended by Directive 2002/87/EC of the European Parliament and of the Council (OJ L 35, 11.2.2003, p. 1).

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ANNEX

INTERNATIONAL FINANCIAL REPORTING STANDARDS
No
Title

Reproduction allowed within the European Economic Area. All existing rights reserved outside the EEA, with the exception of the right to reproduce for the purposes of personal use or other fair dealing. Further information can be obtained from the IASB at www.iasb.org.uk.

            IFRS 2INTERNATIONAL FINANCIAL REPORTING STANDARD 2

Share-based Payment

SUMMARY

OBJECTIVE

                  IFRS 2SCOPE

RECOGNITION

EQUITY-SETTLED SHARE-BASED PAYMENT TRANSACTIONS

Overview

Transactions in which services are received

Transactions measured by reference to the fair value of the equity instruments granted

Determining the fair value of equity instruments granted

Treatment of vesting conditions

Treatment of a reload feature

After vesting date

If the fair value of the equity instruments cannot be estimated reliably

                     IFRS 2Modifications to the terms and conditions on which equity instruments were granted, including cancellations and settlements

CASH-SETTLED SHARE-BASED PAYMENT TRANSACTIONS

SHARE-BASED PAYMENT TRANSACTIONS WITH CASH ALTERNATIVES

Share-based payment transactions in which the terms of the arrangement provide the counterparty with a choice of settlement

Share-based payment transactions in which the terms of the arrangement provide the entity with a choice of settlement

DISCLOSURES

TRANSITIONAL PROVISIONS

EFFECTIVE DATE

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(*1)  This IFRS uses the phrase «by reference to» rather than «at», because the transaction is ultimately measured by multiplying the fair value of the equity instruments granted, measured at the date specified in paragraph 11 or 13 (whichever is applicable), by the number of equity instruments that vest, as explained in paragraph 19.

(*2)  In the remainder of this IFRS, all references to employees also includes others providing similar services.

(*3)  In paragraphs 35-43, all references to cash also include other assets of the entity.

APPENDIX A

Defined terms

This appendix is an integral part of the IFRS.

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(*1)  The Framework defines a liability as a present obligation of the entity arising from past events, the settlement of which is expected to result in an outflow from the entity of resources embodying economic benefits (ie an outflow of cash or other assets of the entity).

(*2)  In this appendix, monetary amounts are denominated in «currency units» (CU).

            IFRS 2APPENDIX B

Application Guidance

This appendix is an integral part of the IFRS.

Estimating the fair value of equity instruments granted

Shares

Share options

Inputs to option pricing models

                     IFRS 2Expected early exercise

                     IFRS 2Expected volatility

Newly listed entities

Unlisted entities

Expected dividends

Risk-free interest rate

                     IFRS 2Capital structure effects

Modifications to equity-settled share-based payment arrangements

            IFRS 2APPENDIX C

Amendments to other IFRSs

The amendments in this appendix shall be applied for accounting periods beginning on or after 1 January 2005. If an entity applies this IFRS for an earlier period, these amendments shall be applied for that earlier period.

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