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Commission Regulation
(EC) No 2237/2004 of 29 December 2004 amended
by
Regulation (EC) No 2237/2004
and
Regulation (EC) No 1864/2005
Content |
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Objective
1.
[deleted]
2. The objective of
this Standard is to establish principles for presenting
financial instruments as liabilities or equity and for
offsetting financial assets and financial liabilities. It
applies to the classification of financial instruments, from
the perspective of the issuer, into financial assets,
financial liabilities and equity instruments; the
classification of related interest, dividends, losses and
gains; and the circumstances in which financial assets and
financial liabilities should be offset.
3. The principles in
this Standard complement the principles for recognising and
measuring financial assets and financial liabilities in IAS
39 Financial Instruments: Recognition and Measurement,
and for disclosing information about them in IFRS 7
Financial Instruments: Disclosures.
Scope
4. This Standard
shall be applied by all entities to all types of financial
instruments except:
(a) those
interests in subsidiaries, associates and joint ventures
that are accounted for in accordance with IAS 27
Consolidated and Separate Financial Statements, IAS 28
Investments in Associates or IAS 31 Interests in Joint
Ventures. However, in some cases, IAS 27, IAS 28 or IAS 31
permits an entity to account for an interest in a subsidiary,
associate or joint venture using IAS 39; in those cases,
entities shall apply the disclosure requirements in IAS 27,
IAS 28 or IAS 31 in addition to those in this Standard.
Entities shall also apply this Standard to all derivatives
linked to interests in subsidiaries, associates or joint
ventures. to those in this Standard. Entities
shall also apply this Standard to all derivatives
on interests in subsidiaries, associates or joint ventures.
(b) employers’
rights and obligations under employee benefit plans,
to which IAS 19 Employee Benefits applies.
(c) contracts for contingent
consideration in a business combination (see IFRS 3
Business Combinations). This exemption applies only to
the acquirer.
(d) insurance contracts as defined in IFRS 4 Insurance
Contracts. However, this Standard applies to derivatives
that are embedded in insurance contracts if IAS 39
requires the entity to account for them separately.
Moreover, an issuer shall apply this Standard to
financial guarantee contracts if the issuer applies IAS
39 in recognising and measuring the contracts, but shall
apply IFRS 4 if the issuer elects, in accordance with
paragraph 4(d) of IFRS 4, to apply IFRS 4 in recognising
and measuring them.
(e) financial instruments that are
within the scope of IFRS 4 because they contain a
discretionary participation feature. The issuer of these
instruments is exempt from applying to these features
paragraphs 15-32 and AG25-AG35 of this Standard
regarding the distinction between financial liabilities
and equity instruments. However, these instruments are
subject to all other requirements of this Standard.
Furthermore, this Standard applies to derivatives that
are embedded in these instruments (see IAS 39).
(f) financial instruments, contracts and obligations under
share- based payment transactions to which IFRS 2
Share-based Payment applies, except for
(i)
contracts within the scope of paragraphs 8-10 of
this Standard, to which this Standard applies,
(ii)
paragraphs 33 and 34 of this Standard, which 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.
5.
[deleted]
6. [deleted]
7.
[deleted]
8. This Standard
shall be applied to those contracts to buy or sell a non-financial
item that can be settled net in cash or another financial
instrument, or by exchanging financial instruments, as if
the contracts were financial instruments, with the
exception of contracts that were entered into
and continue to be held for the purpose of the
receipt or delivery of a non-financial item in accordance
with the entity’s expected purchase, sale or usage requirements.
9. There are various
ways in which a contract to buy or sell a nonfinancial item
can be settled net in cash or another financial instrument or
by exchanging financial instruments. These include:
(a) when the terms
of the contract permit either party to settle it net in cash
or another financial instrument or by exchanging financial
instruments;
(b) when the ability
to settle net in cash or another financial instrument, or by
exchanging financial instruments, is not explicit in the terms
of the contract, but the entity has a practice of settling
similar contracts net in cash or another financial instrument,
or by exchanging financial instruments (whether with the
counterparty, by entering into offsetting contracts or by
selling the contract before its exercise or lapse);
(c) when, for
similar contracts, the entity has a practice of taking
delivery of the underlying and selling it within a short
period after delivery for the purpose of generating a profit
from short-term fluctuations in price or dealer’s margin;
and
(d) when the
non-financial item that is the subject of the contract is
readily convertible to cash.
A contract to which
(b) or (c) applies is not entered into for the purpose of the
receipt or delivery of the non-financial item in accordance
with the entity’s expected purchase, sale or usage
requirements, and, accordingly, is within the scope of this
Standard. Other contracts to which paragraph 8 applies are
evaluated to determine whether they were entered into and
continue to be held for the purpose of the receipt or delivery
of the non-financial item in accordance with the entity’s
expected purchase, sale or usage requirement, and accordingly,
whether they are within the scope of this Standard.
10. A written option
to buy or sell a non-financial item that can be settled net in
cash or another financial instrument, or by exchanging
financial instruments, in accordance with paragraph 9(a) or
(d) is within the scope of this Standard. Such a contract
cannot be entered into for the purpose of the receipt or
delivery of the non-financial item in accordance with the
entity’s expected purchase, sale or usage requirements.
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