Commission Regulation (EC) No 2909/2000 of 29 December 2000 on the accounting management of the European Communities' non-financial fixed assets
Date: 2000-12-29
Institutions: European Commission
Subjects: European Communities, capital goods, financial regulation, hiring, management accounting, property leasing

30.12.2000

EN

Official Journal of the European Communities

L 336/75

COMMISSION REGULATION (EC) No 2909/2000

of 29 December 2000

on the accounting management of the European Communities' non-financial fixed assets

THE COMMISSION OF THE EUROPEAN COMMUNITIES,

TITLE II

Having regard to the Treaty establishing the European
Community,

Having regard to the Financial Regulation of 21 December
1977 applicable to the general budget of
the European
Communities (1), as last amended by Council Regulation (EC,
ECSC, Euratom) No 2673/1999 (2), and in particular Articles
65 to 72 thereof,

Having regard to Commission Regulation (Euratom, ECSC, EC)
No 3418/93 of 9 December 1993 laying down detailed rules
for the implementation of certain provisions of the Financial
Regulation of 21 December 1977 (3), as last amended by
Decision 2000/716/EC (4), and in particular Article 21 thereof,

Having consulted the Accounting Officers of the European
Parliament, the Council, the Court of Justice, the Court of
Auditors, the Economic and Social Committee, the Committee
of the Regions and the European Ombudsman,

HAS ADOPTED THIS REGULATION:

TITLE I

SCOPE

Article 1

Scope in relation to subject matter

This Regulation shall apply to accounting operations
1.
relating to tangible and intangible fixed assets which form part
of the property belonging to the Communities.

All

2.
tangible and intangible fixed assets which, being
intended to serve the activities of the Communities on a lasting
basis within the meaning of Article 65 of the Financial Regula-
tion and Article 130 of Regulation (Euratom, ECSC, EC) No
3418/93, are to be entered in the inventory and shall form part
of the property belonging to the Communities and shall be
entered in the Communities' balance sheet.

Article 2

Institutional scope

This Regulation shall be applied by the Accounting Offi-

1.
cers of all the Institutions.

The Institutions shall be those listed in Article 12 of the

2.
Financial Regulation.

(1) OJ L 356, 31.12.1977, p. 1.
(2) OJ L 326, 18.12.1999, p. 1.
(3) OJ L 315, 16.12.1993, p. 1.
(4) OJ L 290, 17.11.2000, p. 52.

STRUCTURE OF THE BALANCE SHEET

Article 3

Structure of the balance sheet

The fixed assets covered by this Regulation shall be entered on
the assets side of the balance sheet under the heading ‘fixed
assets’ and set out as follows:

— intangible assets,

— tangible assets:

— land and buildings,

— plant, machinery and tools,

— furniture and vehicle fleet,

— computer hardware,

— finance leases and similar entitlements,

— other tangible assets,

— tangible assets in course of construction, advances and
payments on account in respect of tangible assets.

TITLE III

PROVISIONS RELATING TO THE DIFFERENT BALANCE SHEET
ITEMS

C h a p t e r 1

General provisions

Article 4

Finance leases and similar entitlements

The classification of

1.
leases as fixed assets within the
meaning of this Regulation shall be based on the extent to
which the risks and rewards incident to ownership of the
leased asset lie with the lessor or the lessee and shall depend on
the substance of the transaction rather than the form of the
contract.

A lease shall be classified as a finance lease or similar
2.
entitlement within the meaning of this Regulation if it transfers
substantially the risks and rewards incident to ownership of the
asset to the lessee.

Risks shall include the possibilities of losses from under-
3.
utilisation of capacity, obsolescence or changes in cost-effec-
tiveness due to changing economic conditions. Rewards may
be represented by the expectation of profitable operation over
the asset's economic life and of gain from appreciation in value
or realisation of a residual value.

L 336/76

EN

Official Journal of the European Communities

30.12.2000

Assets covered by a finance lease which does not transfer
4.
substantially the risks and rewards incident to their ownership
to the lessee and assets covered by a lease of over five years
shall be entered in the annex to the financial statements in the
chapter for off-balance sheet commitments.

Article 5

Assets ancillary to a main asset

The value or useful life of assets which are inseparable from or
permanently linked to another item of movable or immovable
property shall be added to the value or useful life of the main
asset to which they are attached.

Article 6

Assets forming part of a whole

Separate components of a piece of equipment or technical
installation shall form part of a whole where they can only
operate together. In that case, they shall be treated as a single
asset.

C h a p t e r 2

Special provisions

Article 7

Land and buildings

1.
The heading ‘land and buildings’ shall comprise property
rights and similar entitlements as defined by the national legis-
lation of the country in which the asset is located.

The following shall be regarded as land:

— bare ground,

— developed land,

— built-up land.

2.

The following shall be regarded as buildings:

— freehold buildings of the Institutions,

— buildings in shared ownership with co-proprietors,

— fixtures within the meaning of paragraph 3.

3.
Any item of movable property which is permanently and
inseparably attached to a building (such as defined under the
first and second indents of paragraph 2) shall constitute a
fixture.

Article 8

Plant, machinery and tools

Plant and machinery shall comprise the different plant, objects,
instruments and machinery necessary for the functioning of
technical or administrative activities. Tools shall
scientific,

comprise all the instruments and tools whose use, in conjunc-
tion with an item of equipment, specialises that equipment for
a particular use.

Article 9

Furniture and vehicle fleet

Furniture shall comprise the movable property, such as tables,
chairs, cupboards and desk units.

The vehicle fleet shall mean the fleet of vehicles of all kinds.

Article 10

Computer hardware

Computer hardware shall comprise the specific installations,
machinery and instruments whose use requires software and
which are intended for the processing of information.

Article 11

Tangible fixed assets in course of construction

Uncompleted tangible fixed assets on the date when the
accounts are closed shall be regarded as tangible fixed assets in
course of construction. A fixed asset is considered as completed
from the moment it is put into service.

Article 12

Intangible fixed assets

1.
Identifiable assets that are non-monetary in nature and
without physical substance shall be regarded as intangible fixed
assets.

To be included in the assets on the balance sheet, such assets
must be controlled by the Institution and must generate future
economic benefits for the European Communities.

2.
Computer software covered by a site licence or acquired
under a large account contract shall be regarded as an intan-
gible fixed asset.

Computer software developed within the Institutions does not
constitute intangible fixed assets.

Article 13

Other tangible or intangible fixed assets

Tangible fixed assets within the meaning of Articles 7 to 11
which do not belong to the preceding categories, such as
removable shelving units, partitions, false floors and ceilings,
and wiring, shall be regarded as other tangible fixed assets.
Intangible fixed assets within the meaning of Article 12 which
do not belong to the preceding category (computer software)
shall be regarded as other intangible fixed assets.

30.12.2000

EN

Official Journal of the European Communities

L 336/77

Article 14

Advances and payments on account in respect of acquisi-
tions of fixed assets

Sums paid before a supplier begins to perform an order or
following proof of partial performance of a contract or order
shall be regarded as advances and payments on account.

The date of acquisition or date of entry shall correspond
3.
to the date on which the risks of ownership of the asset are
transferred to the European Communities, which in general
corresponds to the accepted delivery of the asset and receipt of
the invoice; at
the balance sheet date, any discrepancies
between invoicing, delivery and transfer of ownership shall be
regularised.

TITLE IV

VALUATION RULES

C h a p t e r 1

General provisions

Article 15

Valuation

1.
Fixed assets shall be valued at their acquisition price, with
the exception of assets produced by the European Communi-
ties, which shall be valued at their production cost, without
prejudice to the following paragraphs.

2.
The acquisition price or production cost of fixed assets
whose use is limited in time shall be reduced by means of
valuation adjustments calculated in such a way as to depreciate
those assets systematically over their useful

life.

3.
Valuation adjustments shall be made to fixed assets,
whether or not their use is limited in time, so as to give them
the lower value to be assigned to them at the balance sheet
date where their decline in value is expected to be permanent.

Valuation at the lower value shall not be maintained where the
reasons for the valuation adjustments no longer apply.

4.
Fixed assets must be revalued where, following an inde-
pendent expertise, it is shown that their real value exceeds their
book value. Such appreciation must be permanent.

Article 16

Book value

The book value of a fixed asset shall be equal to its acquisition
price or production cost, plus or minus revaluations, deprecia-
tion and other amounts written off.

Article 17

Use of the euro

1.

Fixed assets shall be expressed in euro.

Article 18

Acquisition price — assets acquired for consideration

The acquisition price shall be obtained by adding any
1.
incidental expenses and acquisition expenses to the purchase
price.

2.
Incidental expenses shall comprise the cost of transport
for conveying the item to the place of its initial installation and
the cost of installation, assembly and expertise for ensuring
that it functions satisfactorily, unless such costs have been
invoiced separately on a fixed-price basis. Incidental expenses
shall also comprise improvement expenditure which has the
effect of extending the fixed asset's useful life and/or improving
its performance.

3.
Acquisition expenses shall comprise architects' fees for
the construction and fitting-out of buildings or parts of
buildings.

The following items of expenditure shall not be included

4.
in the purchase price:

(a) VAT and taxes that can be recovered from public authori-
ties pursuant to the Protocol on the Privileges and Immuni-
ties of the European Communities or other similar agree-
ments (Vienna Convention, headquarters agreements);

(b) transport costs incurred after the item has been conveyed

to the place of its initial

installation;

(c) maintenance and servicing costs,

transfer taxes, profes-
sional fees other than architects' fees, commissions, legal
costs, guarantee costs, guarantee extension costs;

(d) interest on loans taken out

in order

to finance the

purchase.

Article 19

Assets acquired free of charge

1.
Assets acquired free of charge shall be valued at their
market value. Nevertheless, works of art shall be valued at their
insured value or appraised value or, where they have not been
insured or appraised, at a token amount.

2.
The market value of an asset shall be the price which a
buyer would be prepared to pay for it, having due regard to its
condition and location and on the assumption that it could
continue to be used.

2. Where the purchase price is paid in a currency other than
the euro, it shall be converted into euro at the rate applicable at
the date of acquisition.

If the market value of an asset cannot be determined, the

3.
inventory value of a similar asset shall be taken.

L 336/78

EN

Official Journal of the European Communities

30.12.2000

Article 20

Production cost

The following shall not be included in the acquisition

4.
cost:

(a) data input costs incurred after the software has been put

Assets produced by the European Communities shall be

1.
valued at their production cost.

into service;

(b) maintenance costs.

2.
The production cost shall be obtained by adding to the
acquisition price of the raw materials and consumables used
the costs directly attributable to the production of the asset in
question.

3.
A reasonable proportion of the costs which are only
indirectly attributable to the product in question may be added
into the production costs to the extent that they relate to the
period of production.

C h a p t e r 2

Special provisions

Article 21

Finance leases

Assets covered by finance leases shall be valued at the
the

the lower of

1.
date of entry into force of
following two values:

the lease at

— the market value of the asset,

— the discounted value of the minimum lease payments due.

2.
The minimum lease payments due shall be the total
amount (including rental payments and, where appropriate, the
cost of exercising the purchase option) which the Institution is
required to pay during the term of the lease, excluding manage-
ment fees and taxes.

The interest rate to be used for calculating the discounted
3.
value of
the payments referred to in paragraph 2 is the
discount rate mentioned in the contract. If this is not expressly
mentioned in the contract, the discount rate, implicit in the
lease, must be calculated.

Article 22

Computer software

1.
The purchase price of computer software covered by a
site licence requiring the Institution to pay a flat charge irres-
pective of the number of users shall be the remuneration paid
to obtain that entitlement.

2.
The purchase price of computer software acquired under
a large account contract requiring the Institution to pay a fee
per user shall be the total of the price paid in respect of each
user.

3.
the
In accordance with the provisions of Article 12,
following shall be added to the purchase price in order to
arrive at the acquisition cost:

(a) the incidental expenses, associated directly or indirectly
with acquisition, incurred in making the software fit for
use, before it is put into service;

(b) expenditure incurred in improving existing software shall
be included if it has the effect of extending useful life or
improving performance of the software.

Article 23

Advances and payments on account

Advances and payments on account shall be valued at their
face value.

Article 24

Land and buildings

There shall be no need to value a plot of land or a building
which has been transferred subject to conditions precedent.

C h a p t e r 3

Replacement of one asset by another and improvements

Article 25

Replacement

Where a new asset is acquired in pure exchange for an old one,
or when the new asset is acquired in part in exchange of an old
one and in part by a monetary payment, the old asset shall be
taken off the balance sheet and the new asset entered on the
balance sheet at market value, established in accordance with
Article 19.

Article 26

Improvements

Improvements to assets entered on the balance sheet shall
increase their book value. Improvements shall be valued in
accordance with Chapters 1 and 2 of this Title.

C h a p t e r 4

Depreciation

Article 27

Definition

1.
Depreciation shall be understood as the accounting esti-
mate of the durable and, normally, irreversible decline in value
of a fixed asset resulting for example from its use over time or
from technological evolution. It shall consist in spreading, over
the expected useful life of the fixed asset, the value of the asset
according to a pre-established schedule.

2.
Depreciation shall begin in the year in which the asset is
put into service and shall be calculated in whole years, irrespec-
tive of the point during the year when this takes place.

3. Where the real useful life of an asset exceeds its deprecia-
tion period, the asset shall remain on the balance sheet at the
end of
the depreciation period, with depreciation corre-
sponding to 100 % of its book value.

30.12.2000

EN

Official Journal of the European Communities

L 336/79

Article 28

Depreciable assets

land,

1.
All assets entered on the balance sheet, with the excep-
fixed assets in the course of construction,
tion of
advances and payments on account as defined in Article 14 of
this Regulation and works of art referred to in Article 19, shall
be depreciated. This depreciation is specific for the asset to
which it relates.

Assets with similar technical or juridical characteristics

2.
can be subject to a global depreciation.

C h a p t e r 5

Loss or disposal

Article 33

Loss or disposal

Where an asset no longer forms part of the property belonging
to the Communities as a result of sale, acceptance in part-
exchange by a third party, scrapping, disposal free of charge,
destruction, loss or theft or for any other reason, its value and
the accumulated depreciation shall no longer appear on the
balance sheet.

Article 29

TITLE V

Depreciation rules and method

ENTRY IN THE ACCOUNTS

1.
The Commission's Accounting Officer shall be respon-
sible for stipulating the depreciation rules and rates and estab-
lishing the other criteria or arrangements for applying the
principles
the depreciation of assets assigned to the
Institutions.

for

2.
The depreciation method to be applied shall be the
straight-line method, apart from exceptions stipulated by the
Commission's Accounting Officer.

Article 30

Depreciation rates

1.
The depreciation rates applied shall be those set out in
Annex I, without prejudice to later adjustments to be fixed by
the Accounting Officer of the Commission pursuant to Article
29(1).

2.
For certain categories of assets (including housing) held
by the delegations, situated in non-member countries special
rates may be fixed by the Commission's Accounting Officer.

Article 31

Depreciation of revalued assets

Article 34

Acquisition

Assets acquired for consideration are shown on the assets
1.
side of the balance sheet under the heading ‘fixed assets’ for the
amount corresponding to its acquisition price. The counterpart
shall be a reduction of the amount of cash at bank.

2. Where an asset is acquired free of charge, its market value
shall be debited to the heading ‘fixed assets’ and credited to the
heading ‘own capital’.

3.
The goods produced by the Communities are debited on
the assets side of the balance sheet under the heading ‘fixed
assets’ at production cost. They are credited in the income and
expenditure account ‘adjustment result — production of fixed
assets’.

Article 35

Finance leases

The value of assets covered by finance leases, calculated in
accordance with the rules laid down in Article 21, shall be
shown in the accounts on the assets side under the heading
‘fixed assets’ and on the liabilities side under the heading ‘capi-
tal’
for the paid amount and under the heading ‘amounts
payable after one year’ and ‘amounts payable within one year’
for the amount still to be paid.

Where a fixed asset is revalued within the meaning of Article
15, depreciation of the revalued asset shall continue over its
residual

life, on the basis of the revalued value.

Article 36

Value adjustments

Article 32

Replacement assets and improvements

1. Where an asset is replaced by another, calculation of the
depreciation shall take account of the value of the new asset,
determined in accordance with the rules laid down in Article
25, and the date on which the new asset is put into service.

2. Where a fixed asset has undergone improvements, depre-
ciation of the improved asset shall continue over its residual
life having due regard to the new value.

1.
For the purposes of presentation on the balance sheet,
value adjustments within the meaning of Article 15 made
following depreciation, revaluation or amounts written off shall
be included directly in the fixed assets.

The chart of accounts shall

2.
include accounts in which
depreciation, amounts written off and revaluations are shown
separately.

The amount of depreciation and amounts written off
3.
shall be debited in the profit and loss account ‘adjustment
results — depreciation/amounts written off’.

The amount of the revaluation is credited in the liabilities

4.
account ‘revaluation reserve’.

L 336/80

EN

Official Journal of the European Communities

30.12.2000

Article 37

Loss or disposal

cial Regulation or Regulation (Euratom, ECSC, EC) No 3418/
93.

Where an asset no longer forms part of the property belonging
to the Communities for one of the reasons referred to in
Article 33, the (positive or negative) difference between its
book value and the amount obtained on its loss or disposal
shall be entered in the income and expenditure account ‘adjust-
ment results — withdrawal of fixed assets’.

Article 40

Conformity

The Accounting Officer of each Institution shall ensure that all
internal rules concerning the management of inventories are in
conformity with this Regulation.

TITLE VI

MANAGEMENT SYSTEMS

Article 38

Management systems

The systems for managing assets belonging to the Communi-
ties shall be capable of providing all the data necessary for the
identification of each item. The systems must permit
the
drawing of the periodic inventories to check accounting entries
and the calculation of depreciation.

Article 41

Repeal

All other rules which are in contradiction with the provisions
of this Regulation shall be repealed, and in particular Articles 2,
3, 4, 5, 6, 7, 8, 10, 27, 28, 29, 55, 56 and 57 of the
Regulation on inventories and management of the property of
the European Commission adopted by written procedure on 22
January 1997.

Article 42

Derogations

TITLE VII

FINAL PROVISIONS AND DEROGATIONS

By way of derogation from Article 18, buildings acquired
before 1981 shall be entered in the accounts using the conver-
sion rate for the ecu for the month of January 1981.

Article 39

Adjustment

Article 43

Entry into force

The Commission may make any adjustments to this Regulation
that automatically follow from amendments made to the Finan-

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

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

Done at Brussels, 29 December 2000.

For the Commission

Michaele SCHREYER

Member of the Commission

30.12.2000

EN

Official Journal of the European Communities

L 336/81

ANNEX

Table of depreciation rates

Type of asset

Computer software

Computer hardware

Plant, machinery and tools

Kitchens — Cafeterias — Crèches

Small electrical appliances

Cash registers

Large kitchen appliances

Furniture specifically for kitchens and cafeterias

Furniture specifically for crèches

Telecommunications and audiovisual equipment

Telephone sets and fax machines

Earphones, headsets, microphones

Video cameras

Video recorders

Tape recorders and dictating machines

Projectors (slides and overhead)

Photographic equipment

Projection screens

Television and radio sets, monitors (other than for computers)

Technical equipment

Printing, mail, security, building, tools

Measuring or laboratory apparatus

Other plant, machinery and tools

Removable shelving units, partitions, false floors, false ceilings and wiring

Vehicle fleet

Movables

Immovables

Land

Straight-line
depreciation rates
(%)

25

25

25

25

12,50

12,50

25

25

25

25

25

25

25

25

25

25

12,50

25

12,50

25

25

10

4

Not relevant