
Article 1 
Annex to regulation (EC) No 1725/2003 is amended as follows:

1.. The text of the Amendments to International Accounting Standard (IAS) 39 Financial Instruments: Recognition and Measurement — Transition and Initial Recognition of Financial Assets and Financial Liabilities is inserted as set out in the Annex to this Regulation.
2.. The text of the IFRIC Amendment to SIC 12 Scope of SIC 12; Consolidation — Special Purpose Entities is inserted as set out in the Annex to this Regulation.
3.. The adoption of the amendments to IAS 39 implies, by way of consequence, amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards in order to ensure consistency between international accounting standards.
Article 2 
This Regulation shall enter into force on the third day following its publication in the Official Journal of the European Union.
It shall apply to each financial year of a company starting on or after 1 January 2005.
This Regulation shall be binding in its entirety and directly applicable in all Member States.Done at Brussels, 25 October 2005.
For the Commission
Charlie McCREEVY
Member of the Commission
ANNEX
IAS 39 Amendments to International Accounting Standard (IAS) 39 Financial Instruments: Recognition and Measurement — Transition and Initial Recognition of Financial Assets and Financial Liabilities
SIC 12 IFRIC Amendment to SIC 12 Scope of SIC 12; Consolidation — Special Purpose EntitiesReproduction allowed within the European Economic Area. All existing rights reserved outside the EEE, with the exception of the right to reproduce for the purposes of personal use or other fair dealing. Further information can be obtained from the IASB at www.iasb.org.ukIn the Standard, paragraph 107A is added. 107A. 

((a)) prospectively to transactions entered into after 25 October 2002; or
((b)) prospectively to transactions entered into after 1 January 2004.
In Appendix A, Application Guidance, paragraph AG76A is added. Application Guidance 
…
 AG76A. The subsequent measurement of the financial asset or financial liability and the subsequent recognition of gains and losses shall be consistent with the requirements of this Standard. The application of paragraph AG76 may result in no gain or loss being recognised on the initial recognition of a financial asset or financial liability. In such a case, IAS 39 requires that a gain or loss shall be recognised after initial recognition only to the extent that it arises from a change in a factor (including time) that market participants would consider in setting a price.
 Appendix 
The amendments in this appendix shall be applied for annual periods beginning on or after 1 January 2005. If an entity applies IFRS 1 for an earlier period, these amendments shall be applied for that earlier period.
 A1. IFRS 1 First-time Adoption of International Financial Reporting Standards is amended as described below.
In paragraph 13, subparagraphs (j) and (k) are amended, and subparagraph (l) inserted, as follows:

((j)) decommissioning liabilities included in the cost of property, plant and equipment (paragraph 25E);
((k)) leases (paragraph 25F); and
((l)) fair value measurement of financial assets or financial liabilities at initial recognition (paragraph 25G).
After paragraph 25F a new heading and paragraph 25G are inserted as follows:
 25G 

((a)) prospectively to transactions entered into after 25 October 2002; or
((b)) prospectively to transactions entered into after 1 January 2004.

International Financial Reporting Interpretations Committee 

 IAS 19 Employee Benefits
 IAS 32 Financial Instruments: Disclosure and Presentation
 IFRS 2 Share-based Payment
 SIC-12 Consolidation — Special Purpose Entities
 1. Until this Amendment becomes effective, SIC-12 excludes from its scope post-employment benefit plans and equity compensation plans (SIC-12.6). Until IFRS 2 becomes effective, such plans are within the scope of IAS 19 (as amended in 2002).
 2. 

((a)) removing from its scope employee benefits to which IFRS 2 applies, and
((b)) removing all references to equity compensation benefits and equity compensation plans.
 3. Furthermore, IAS 32 requires treasury shares to be deducted from equity. When IFRS 2 becomes effective, it will amend IAS 32 to state that paragraphs 33 and 34 of IAS 32 (relating to treasury shares) shall be applied to treasury shares purchased, sold, issued or cancelled in connection with employee share option plans, employee share purchase plans, and all other share-based payment arrangements.
 4. The first matter addressed by this Amendment is the inclusion of equity compensation plans within the scope of SIC-12.
 5. The second matter addressed by this Amendment is to exclude from the scope of SIC-12 other long-term employee benefit plans. Until the Amendment becomes effective, SIC-12 does not exclude other long-term employee benefit plans from its scope. However, IAS 19 requires those plans to be accounted for in a manner similar to the accounting for post-employment benefit plans.
 6. 
This Interpretation does not apply to post-employment benefit plans or other long-term employee benefit plans to which IAS 19 applies.
 7. An entity shall apply this Amendment for annual periods beginning on or after 1 January 2005. If an entity applies IFRS 2 for an earlier period, this amendment shall be applied for that earlier period.
