HTML PUBLIC "-//W3C//DTD HTML 4.01 Transitional//EN"L 346/42
EN
Official Journal of the European Union
20.12.2013
COMMISSION REGULATION (EU) No 1375/2013
of 19 December 2013
amending Regulation (EC) No 1126/2008 adopting certain international accounting standards in
accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council
as regards International Accounting Standard 39
(Text with EEA relevance)
THE EUROPEAN COMMISSION,
consequence, counterparties of certain hedging
instruments should agree to replace their original
counterparty of the hedging transaction by a central
counterparty that is compliant with the requirements of
that Regulation.
Having regard to the Treaty on the Functioning of the European
Union,
(4) In
order
to
avoid
a
financial
reporting
burden
arising
from the novation of OTC derivatives to a central
Having regard to Regulation (EC) No 1606/2002 of the
counterparty as a consequence of laws or regulations
European Parliament and of the Council of 19 July 2002 on
or the introduction of laws or regulations, it is
the application of international accounting standards ( 1 ), and in
necessary to provide for an exception to the existing
particular Article 3(1) thereof,
requirements for discontinuation of hedge accounting
in IAS 39.
Whereas:
(5) The
consultation
with
the
Technical
Expert
Group
of
the
European Financial Reporting Advisory Group confirms
that the amendments to IAS 39 meet the technical
(1) By
Commission
Regulation
(EC)
No
1126/2008
(
criteria for adoption set out in Article 3(2) of Regulation

2 )
certain international standards and interpretations that
(EC) No 1606/2002.
were in existence at 15 October 2008 were adopted.
(6) Commission
Regulation
(EC)
No
1126/2008
should
(2) On
27
June
2013
the
International
Accounting
therefore be amended accordingly.
Standards Board published amendments to International
Accounting Standard (IAS) 39 Financial Instruments:
Recognition and Measurement entitled Novation of
Derivatives and Continuation of Hedge Accounting. The
objective of the amendments is to provide relief in situ
ations where a derivative, which has been designated as a
(7) The
measures
provided
for
in
this
Regulation
are
in
hedging instrument, is novated from one counterparty to
accordance with the opinion of the Accounting Regu
a central counterparty as a consequence of laws or regu
latory Committee,
lations. Such a relief means that hedge accounting can
continue irrespective of the novation which, without the
amendment, would not be permitted.
HAS ADOPTED THIS REGULATION:
(3) Regulation
(EU)
No
648/2012
of
the
European
Parliament and of the Council
( 3 ) requires central
clearing of certain classes of OTC derivatives. As a
Article 1
( 1 ) OJ L 243, 11.9.2002, p. 1.
In the Annex to Regulation (EC) No 1126/2008, International
( 2 ) OJ L 320, 29.11.2008, p. 1.
Accounting Standard (IAS) 39 Financial Instruments: Recognition
( 3 ) Regulation (EU) No 648/2012 of the European Parliament and of
the Council of 4 July 2012 on OTC derivatives, central counter
and Measurement is amended as set out in the Annex to this
parties and trade repositories (OJ L 201, 27.7.2012, p. 1).
Regulation.

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EN
20.12.2013 Official
Journal
of
the
European
Union L
346/43
Article 2
Article 3
Each company shall apply the amendments referred to in
This Regulation shall enter into force on the third day following
Article 1, at the latest, as from the commencement date of its
that of its publication in the Official Journal of the European
first financial year starting on or after 1 January 2014.
Union.
This Regulation shall be binding in its entirety and directly applicable in all Member States.
Done at Brussels, 19 December 2013.
For the Commission
The President
José Manuel BARROSO

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L 346/44
EN
Official Journal of the European Union
20.12.2013
ANNEX
INTERNATIONAL ACCOUNTING STANDARDS
IAS 39 IAS
39 Financial Instruments: Recognition and Measurement
‘Reproduction allowed within the European Economic Area. All existing rights reserved outside the EEA, 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’

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EN
20.12.2013 Official
Journal
of
the
European
Union L
346/45
Amendments to IAS 39 Financial Instruments: Recognition and Measurement
Novation of Derivatives and Continuation of Hedge Accounting
Paragraphs 91 and 101 are amended.
Fair value hedges
…
91 An
entity
shall
discontinue
prospectively
the
hedge
accounting
specified
in
paragraph
89
if:
(a) the hedging instrument expires or is sold, terminated or exercised. For this purpose, the
replacement or rollover of a hedging instrument into another hedging instrument is not an
expiration or termination if such replacement or rollover is part of the entity’s documented
hedging strategy. Additionally, for this purpose there is not an expiration or termination of the
hedging instrument if:
(i) as a consequence of laws or regulations or the introduction of laws or regulations, the parties
to the hedging instrument agree that one or more clearing counterparties replace their original
counterparty to become the new counterparty to each of the parties. For this purpose, a
clearing counterparty is a central counterparty (sometimes called a ‘clearing organisation’ or
‘clearing agency’) or an entity or entities, for example, a clearing member of a clearing organi
sation or a client of a clearing member of a clearing organisation, that are acting as counterparty
in order to effect clearing by a central counterparty. However, when the parties to the hedging
instrument replace their original counterparties with different counterparties this paragraph
shall apply only if each of those parties effects clearing with the same central counterparty.
(ii) other changes, if any, to the hedging instrument are limited to those that are necessary to effect
such a replacement of the counterparty. Such changes are limited to those that are consistent
with the terms that would be expected if the hedging instrument were originally cleared with
the clearing counterparty. These changes include changes in the collateral requirements, rights
to offset receivables and payables balances, and charges levied.
(b) …
…
Cash flow hedges
…
101
In any of the following circumstances an entity shall discontinue prospectively the hedge accounting
specified in paragraphs 95–100:
(a) The hedging instrument expires or is sold, terminated or exercised. In this case, the cumulative gain
or loss on the hedging instrument that has been recognised in other comprehensive income from
the period when the hedge was effective (see paragraph 95(a)) shall remain separately in equity
until the forecast transaction occurs. When the transaction occurs, paragraph 97, 98 or 100 applies.
For the purpose of this subparagraph, the replacement or rollover of a hedging instrument into
another hedging instrument is not an expiration or termination if such replacement or rollover is
part of the entity’s documented hedging strategy. Additionally, for the purpose of this
subparagraph there is not an expiration or termination of the hedging instrument if:

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L 346/46
EN
Official Journal of the European Union
20.12.2013
(i) as a consequence of laws or regulations or the introduction of laws or regulations, the parties
to the hedging instrument agree that one or more clearing counterparties replace their original
counterparty to become the new counterparty to each of the parties. For this purpose, a
clearing counterparty is a central counterparty (sometimes called a ‘clearing organisation’ or
‘clearing agency’) or an entity or entities, for example, a clearing member of a clearing organi
sation or a client of a clearing member of a clearing organisation, that are acting as counterparty
in order to effect clearing by a central counterparty. However, when the parties to the hedging
instrument replace their original counterparties with different counterparties this paragraph
shall apply only if each of those parties effects clearing with the same central counterparty.
(ii) other changes, if any, to the hedging instrument are limited to those that are necessary to effect
such a replacement of the counterparty. Such changes are limited to those that are consistent
with the terms that would be expected if the hedging instrument were originally cleared with
the clearing counterparty. These changes include changes in the collateral requirements, rights
to offset receivables and payables balances, and charges levied.
(b) …
Paragraph 108D and, in Appendix A, paragraph AG113A are added.
Effective date and transition
…
108D
Novation of Derivatives and Continuation of Hedge Accounting (Amendments to IAS 39), issued in June 2013,
amended paragraphs 91 and 101 and added paragraph AG113A. An entity shall apply those paragraphs for
annual periods beginning on or after 1 January 2014. An entity shall apply those amendments retrospectively
in accordance with IAS 8 Accounting Policies, Changes in Accounting Estimates and Errors. Earlier application is
permitted. If an entity applies those amendments for an earlier period it shall disclose that fact.
…
Assessing hedge effectiveness
…
AG113A For the avoidance of doubt, the effects of replacing the original counterparty with a clearing counterparty and
making the associated changes as described in paragraphs 91(a)(ii) and 101(a)(ii) shall be reflected in the
measurement of the hedging instrument and therefore in the assessment of hedge effectiveness and the
measurement of hedge effectiveness.

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