This new directive, mandatory for individual and consolidated financial statements for financial periods starting on or after January 1, 2003, deals with the recognition, measurement and disclosures of Environmental Issues.

The criteria to recognise and measure environmental liabilities are in line with IAS 37, Provisions, Contingent Liabilities and Contingent Assets, that is to say, they should be recognised when an entity has a present obligation as a result of a past event, an outflow of resource to settle the obligation is probable and the amount can be reliably estimated. Obligations that meet the criteria of a contingent liability should not be recognised but are to be disclosed.

Offsetting with expected reimbursements is not allowed unless the company has a legal right, and intends to set the liability for the net amount.

Environmental liabilities should be recognised in the income statement in the year they occur. An asset may be recognised in certain exceptional circumstances. Discounting is allowed if its effect is considered relevant in the company's financial statements.

A list of the necessary disclosures including, but not limited to, a description of the liability, the amounts recognised in the year either as an asset or in the income statement, and the methods used to measure the liability is provided. Additional disclosures to be made in the management report (mandatory in accordance with the Portuguese commercial code) including the company's policy to deal with environmental risks are also defined.