European Commission 15 November 2005, Commission Regulation (EC) No 1864/2005 of 15 November 2005 amending Regulation (EC) No 1725/2003 adopting certain international accounting standards in accordance with Regulation (EC) No 1606/2002 of the European Parliament and of the Council, as regards International Financial Reporting Standard No 1 and International Accounting Standards Nos. 32 and 39 (Text with EEA relevance)

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Commission Regulation (EC) No 1864/2005 amends Regulation (EC) No 1725/2003 to incorporate revised international accounting standards, specifically restricting the 'Fair Value Option' within IAS 39 to instances that reduce accounting mismatches or align with documented risk management strategies. The regulation introduces specific criteria for designating financial instruments at fair value through profit or loss and establishes requirements for embedded derivatives and fair value measurement disclosures. These amendments apply retroactively from 1 January 2005 to ensure consistency for first-time adopters and maintain the integrity of financial reporting within the European Community.AI