COMMISSION REGULATION (EC) No 1910/2005
of 8 November 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 Standard 1 and 6, IASs 1, 16, 19, 24, 38, and 39, International Financial Reporting Interpretations Committee’s Interpretations 4 and 5
(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:
(1)
By Commission Regulation (EC) No 1725/2003 (2) certain international standards and interpretations that were extant at 14 September 2002 were adopted, including International Accounting Standard (IAS) 19 Employee benefits.
(2)
On 9 December 2004, the International Accounting Standards Board (IASB) published International Financial Reporting Standard (IFRS) 6 Exploration for and evaluation of mineral resources, hereinafter ‘IFRS 6’, as an interim solution to enable entities within this sector to comply with IFRSs without the need for major changes to accounting practice. IFRS 6 permits entities that incur exploration and evaluation expenditure exemptions from some of the requirements of other IFRSs. In specified circumstances, such entities are allowed to continue with their existing accounting treatment for exploration and evaluation expenditure. IFRS 6 includes further guidance on the impairment indicators for exploration and evaluation assets and the impairment testing of such assets.
(3)
On 16 December 2004 the IASB issued an amendment to IAS 19 Employee benefits. It introduces a further option regarding the recognition of actuarial gains and losses for defined benefit pension plans. It now allows actuarial gains and losses to be recognised, in full, in a statement of recognised income and expense outside the income statement, that is, actuarial gains and losses can be recognised directly in equity. The amendment also specifies how group entities should account for defined benefit group plans in their separate financial statements and requires additional disclosures.
(4)
On 2 December 2004 the International Financial Reporting Interpretations Committee (IFRIC) published IFRIC Interpretation 4 Determining whether an arrangement contains a lease, hereinafter ‘IFRIC 4’. IFRIC 4 sets out criteria for determining whether an arrangement is, or contains, a lease, for example some take-or-pay contracts. IFRIC 4 clarifies under which circumstances these arrangements that do not take the legal form of a lease should, nonetheless, be accounted for in accordance with IAS 17 Leases.
(5)
On 16 December 2004 the International Financial Reporting Interpretations Committee (IFRIC) published IFRIC Interpretation 5 Rights to interests arising from decommissioning, restoration and environmental funds, hereinafter ‘IFRIC 5’. IFRIC 5 sets out how a contributor should account for its interest in a fund and how a contributor should account for additional contributions.
(6)
The consultation with technical experts in the field confirm that IFRS 6, IAS 19, and IFRIC 4 and 5 meet the technical criteria for adoption set out in Article 3(2) of Regulation (EC) No 1606/2002.
(7)
The adoption of IFRS 6, IAS 19, IFRIC 4 and 5 implies, by way of consequence, amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards, IAS 1 Presentation of Financial Statements, IAS 16 Property, Plant and Equipment, IAS 24 Related Party Disclosures, IAS 38 Intangible Assets and IAS 39 Financial Instruments: Recognition and Measurement in order to ensure consistency between international accounting standards.
(8)
Regulation (EC) No 1725/2003 should therefore be amended accordingly.
(9)
The measures provided for in this Regulation are in accordance with the opinion of the Accounting Regulatory Committee,
HAS ADOPTED THIS REGULATION:
Article 1
Annex to Regulation (EC) No 1725/2003 is amended as follows:
1.
International Financial Reporting Standard (IFRS) 6 Exploration for and evaluation of mineral resources is inserted as set out in the Annex to this Regulation;
2.
IAS 19 Employee benefits is amended in accordance with Amendment to IAS as set out in the Annex to this Regulation;
3.
International Financial Reporting Interpretations Committee’s Interpretation (IFRIC Interpretation) 4 Determining whether an arrangement contains a lease is inserted as set out in the Annex to this Regulation;
4.
IFRIC Interpretation 5 Rights to interests arising from decommissioning, restoration and environmental funds is inserted as set out in the Annex to this Regulation;
5.
International Financial Reporting Standard (IFRS) 1, IAS 16 and IAS 38 are amended in accordance with Appendix B of IFRS 6 as set out in the Annex to this Regulation;
6.
IFRS 1, IAS 1 and IAS 24 are amended in accordance with Appendix F of Amendment to IAS 19 as set out in the Annex to this Regulation;
7.
IFRS 1 is amended in accordance with the Appendix of IFRIC 4 as set out in the Annex to this Regulation;
8.
IAS 39 is amended in accordance with the Appendix of IFRIC 5 as set out in the Annex to this Regulation.
Article 2
Each company shall apply the standards and interpretations set out in the Annex as from the commencement date of its 2006 financial year, at the latest.
Article 3
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, 8 November 2005.