Judgment of the Court of 7 January 2003 in Case C-306/99 (Reference for a preliminary ruling from the Finanzgericht Hamburg): Banque internationale pour l'Afrique occidentale SA (BIAO) v Finanzamt für Großunternehmen in Hamburg (Fourth Directive 78/660/EEC — Annual accounts of certain types of companies — Jurisdiction of the Court to interpret Community law in a context where it is not directly applicable — Provisions for risk under a loan guarantee — Taking into account of the individual situation of the debtor and of its State of establishment — Date on which the risk may or must be evaluated and entered on the balance sheet)
Date: 2003-02-22
Institutions: Court of Justice
Subjects: accounting, credit, interpretation of the law, organisation, project evaluation

22.2.2003

EN

Official Journal of the European Union

C 44/1

I

(Information)

COURT OF JUSTICE

COURT OF JUSTICE

JUDGMENT OF THE COURT

of 7 January 2003

D.A.O. Edward (Rapporteur), A. La Pergola, P. Jann, V. Skouris,
F. Macken, N. Colneric and S. von Bahr, Judges; F.G. Jacobs,
Advocate General; L. Hewlett, Principal Administrator, Regis-
trar, has given a judgment on 7 January 2003, in which it has
ruled:

in Case C-306/99 (Reference for a preliminary ruling from
the Finanzgericht Hamburg): Banque internationale pour
l’Afrique occidentale SA (BIAO) v Finanzamt für Großun-
ternehmen in Hamburg (1)

(Fourth Directive 78/660/EEC — Annual accounts of certain
types of companies — Jurisdiction of the Court to interpret
Community law in a context where it is not directly applicable
— Provisions for risk under a loan guarantee — Taking into
account of the individual situation of the debtor and of its
State of establishment — Date on which the risk may or
must be evaluated and entered on the balance sheet)

(2003/C 44/01)

(Language of the case: German)

(Provisional translation; the definitive translation will be published
in the European Court Reports)

In Case C-306/99: Reference to the Court under Article 234
EC by the Finanzgericht Hamburg (Germany) for a preliminary
ruling in the proceedings pending before that court between
Banque internationale pour l’Afrique occidentale SA (BIAO)
and Finanzamt für Großunternehmen in Hamburg, on the
interpretation of the Fourth Council Directive 78/660/EEC of
25 July 1978 based on Article 54(3)(g) of the Treaty on the
annual accounts of certain types of companies (OJ 1978 L 222,
p. 11), the Court, composed of: G.C. Rodríguez Iglesias,
Chamber),
President,

Puissochet

(President

J.-P.

of

1.

2.

3.

The questions appearing in the second and third parts of the
reference for a preliminary ruling, concerning the interpretation
of the Fourth Council Directive 78/660/EEC of 25 July 1978
based on Article 54(3)(g) of the Treaty on the annual accounts
of certain types of companies, are admissible.

The Fourth Directive 78/660 does not preclude a provision
intended to cover possible losses or debts arising from a
commitment appearing at the foot of the balance sheet pursuant
to Article 14 of that directive from being entered on the
liabilities side of the balance sheet pursuant to Article 20(1),
provided that the loss or debt in question may be characterised
as ‘likely or certain’ at the balance-sheet date. Article 31(1)(e)
of that directive does not exclude the possibility that, in order to
ensure compliance with the principle of prudence and the
principle that a true and fair view of the assets and liabilities be
given, the most appropriate method of valuation might be to
carry out a globalised assessment of all the relevant factors.

In circumstances such as those in point in the main proceedings,
repayment of a loan, which takes place after the balance-sheet
date (that being the relevant date for valuing balance-sheet
items), does not constitute a fact necessitating retrospective
revaluation of a provision relating to that loan entered on the
liabilities side of the balance sheet. However, compliance with
the principle that a true and fair view of the assets and liabilities
be given requires that mention should be made in the annual
accounts of the disappearance of the risk covered by that
provision.

(1) OJ C 333 of 20.11.1999.