Can Member States either permit or require companies to apply the full fair value option under IAS 39, despite the fact that it has been carved out by the Commission?
No. Since the full fair value option is contrary to Article 42a of the Fourth Company Law Directive, a Member State cannot permit or require its full use. Article 42a, which was introduced into the Fourth Company Law Directive by the Fair Value Directive (Directive 2001/65/EC) and which should have been written into national law by Member States by 1 January 2004 by the latest, restricts the types of liabilities that may be subject to valuation at fair value. It does not allow the fair valuation of all liabilities of a company. The main category of liabilities excluded from fair valuation is that of own debt. A Member State can also permit or require companies to fair value liabilities under Article 31 of the Insurance Accounts Directive (Directive 1991/674/EEC)[5]. Article 31 allows insurance companies, in the case of unit-linked contracts, to value liabilities – where the policyholders bear the investment risk or where benefits are determined by a certain index – according to the val
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