Commission Regulation (EC) No 2106/2005 of 21 December 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 Accounting Standard (IAS) 39 (Text with EEA relevance)

• Published date: 21 November 2006
• Subject Matter: Free movement of capital,Freedom to provide services,Internal market - Principles

22.12.2005 EN Official Journal of the European Union L 337/16

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COMMISSION REGULATION (EC) No 2106/2005

of 21 December 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 Accounting Standard (IAS) 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:

(1) By Commission Regulation (EC) No 1725/2003 (2), certain international standards and interpretations that were extant at 14 September 2002 were adopted.

(2) The Commission adopted International Accounting Standard (IAS) 39 with the exclusion of certain provisions relating to the full Fair Value Option and hedge accounting, by Commission Regulation (EC) No 2086/2004 of 19 November 2004 amending Regulation (EC) No 1725/2003 on the adoption of certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council as regards the insertion of IAS 39 (3). The Commission adopted improved IAS 39 standard for limited fair value option by Commission Regulation (EC) No 1864/2005 (4).

(3) On 14 April 2005, the International Accounting Standards Board (IASB) published an amendment to IAS 39 allowing entities in particular to designate, in certain circumstances, a forecast intragroup transaction denominated in a foreign currency as the hedged item in consolidated financial statements. It is a common risk management practice to designate the foreign currency risk of a forecast intragroup transaction as the hedged item and the current IAS 39 did not permit hedge accounting for this. Under the current IAS 39 only a transaction external to the entity can be designated as a hedged item.

(4) The consultation with technical experts in the field confirms that the amendments to IAS 39 meet the technical criteria for adoption set out in Article 3 of Regulation (EC) No 1606/2002.

(5) Regulation (EC) No 1725/2003 should therefore be amended accordingly.

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

HAS ADOPTED THIS REGULATION:

Article 1

In the Annex to Regulation (EC) No 1725/2003 International Accounting Standard (IAS) 39 is amended as set out in the Annex to this Regulation.

Article 2

Each company shall apply the amendments to IAS 39 as set out in the Annex to this Regulation 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, 21 December 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 1910/2005 (OJ L 305, 24.11.2005, p. 4).

(3) OJ L 363, 9.12.2004,...