Commission Regulation (EU) No 1255/2012 of 11 December 2012

The Commission Regulation (EU) No 1255/2012 of 11 December 2012, published in the Official Journal of the European Union L 360 on 29 December 2012, adopts the amendments to IFRS 1 First-time Adoption of International Financial Reporting Standards – Severe Hyperinflation and Removal of Fixed Dates for First- time Adopters and to IAS 12 Income Taxes – Deferred Tax: Recovery of Underlying Assets, the IFRS 13 Fair Value Measurement and the IFRIC 20 Stripping Costs in the Production Phase of a Surface Mine.

The objective of the amendments to IFRS 1 is to introduce a new exemption in the scope of IFRS 1 – namely, entities that have been subject to severe hyperinflation are allowed to use fair value as the deemed cost of their assets and liabilities in their opening IFRS statement of financial position. In addition, those amendments also replace the references to fixed dates in IFRS 1 with references to the date of transition. As to IAS 12, it prescribes the accounting treatment for income taxes. The objective of the amendments to IAS 12 is to introduce an exception to the measurement principle in IAS 12 in the form of a rebuttable presumption that assumes that the carrying amount of an investment property measured at fair value would be recovered through sale and an entity would be required to use the tax rate applicable to the sale of underlying asset.

Each company shall apply the above mentioned amendments at the latest, as from the commencement date of its first financial year starting on or after the date of entry into force of this Regulation.

IFRS 13 sets out a single IFRS framework for measuring fair value and provides comprehensive guidance on how to measure the fair value of both financial and non-financial assets and liabilities. IFRS 13 applies when another IFRS requires or permits fair value measurement or disclosures about fair value measurements.

The objective of IFRIC 20 is to provide guidance on recognition of production stripping costs as an asset and on the initial and subsequent measurement of the stripping activity asset in order to reduce the diversity in practice as to how entities account for stripping costs incurred in the production phase of a surface mine.

Each company shall apply IFRS 13, IFRIC 20, at the latest, as from the commencement date of its first financial year starting on or after 1 January 2013.