EU Council adopts IAS 39 amendments to Directives

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02 Jun 2001

Meeting in Brussels 30-31 May, the Council of the European Union unanimously approved an amendment to Directives 78/660/EEC, 83/349/EEC and 86/635/EEC as regards the valuation rules for the annual and consolidated accounts of certain types of companies as well as of banks and other financial institutions.

The amendments were presented by the Commission in February 2000 with a view to making it possible for companies to apply IAS 39, Financial Instruments: Recognition and Measurement, facilitating the valuation of certain financial instruments at fair value instead of historical cost. The European Parliament had approved the amendments earlier this month. The EU's announcement said:

The application of the standard will ensure that the financial impacts of the use of financial instruments are reflected in company financial statements appropriately and with full transparency. This standard has been prepared by a private accounting standard setter (IASB) and will become operative in 2001. The Community endeavours by this directive to facilitate the use of the standard by companies right from the beginning, since otherwise serious problems would be created. The directive now also contains amendments to the Banks Accounts Directive, in addition to the 4th and 7th Company Law Directives.

As regards the general legislative environment, the Commission has also presented, last February, a proposal for a regulation for a mandatory application of International Accounting Standards for listed companies by 2005.

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