Recently issued IFRS

Accounting standards and interpretations issued by the IASB/IFRIC and approved by the European Commission

Regulation no. 632/2010 issued by the European Commission on 19 July 2010 approved the new version of IAS 24 “Related Party Disclosures”, which: (i) supplements the definition of related parties providing for new cases; (ii) for transactions carried out between companies related to the same government (government-related entities), allows for limiting quantitative disclosures to significant transactions. The provisions of the new version of IAS 24 are effective as of financial years starting on or after 1 January 2011.

Regulation no. 662/2010 issued by the European Commission on 23 July 2010 approved IFRIC 19 “Extinguishing financial liabilities with equity instruments” (hereinafter “IFRIC 19”), which defines the accounting treatment to be adopted where a financial liability is settled through the issue of equity instruments (i.e. debt-for-equity swap). In particular, equity instruments issued to extinguish a liability in whole or in part are measured at fair value or, when not reliably determinable, at the fair value of the liability extinguished. The difference between the book value of the financial liability extinguished and the fair value of the equity instruments issued is recognised on the income statement. The provisions of IFRIC 19 are effective as of financial years beginning on or after 1 July 2010 (2011 financial statements for Snam Rete Gas).

Accounting standards and interpretations issued by the IASB/IFRIC and not yet approved by the European Commission

On 12 November 2009, the IASB issued IFRS 9 “Financial Instruments” which amends the criteria for recognising and measuring financial assets and their respective classification on financial statements. In particular, the new provisions stipulate, among other things, a model for classifying and measuring financial assets based exclusively on the following categories: (i) assets measured at amortised cost; (ii) assets measured at fair value. The new provisions also provide that equity investments other than those in subsidiaries, jointly controlled entities or associates must be measured at fair value and posted to the income statement. In the event that such equity investments are not held for trading purposes, changes in fair value may be recognised on the statement of comprehensive income, maintaining on the income statement solely the effects associated with dividend distributions; the amounts recognised on the statement of comprehensive income are not posted to the income statement upon disposal of the equity investment.

On 28 October 2010, the IASB supplemented the provisions of IFRS 9 by including criteria for recognising and measuring financial liabilities. In particular, the new provisions require, among other things, that if a financial liability is measured at fair value and posted to the income statement, the changes in fair value associated with changes in the issuer’s credit risk (i.e. own credit risk) are to be recognised in the statement of comprehensive income; this component is to be posted on the income statement to ensure symmetrical representation with other financial statement items associated with the liability, avoiding an accounting mismatch.

The provisions of IFRS 9 are effective as of financial years beginning on or after 1 January 2013.

On 7 October 2010, the IASB issued the Amendment to IFRS 7 “Disclosures – Transfers of financial assets”, which provides for the addition of disclosure on financial instruments, with reference to transfers of financial assets, in order to describe the risks to which a company remains exposed in relation to the assets transferred. The new provisions require, among other things, additional disclosure in the event that a company makes significant transfers of financial assets near the end of the financial year. The new provisions are effective as of financial years beginning on or after 1 July 2011 (2012 financial statements for Snam Rete Gas).

On 6 May 2010, the IASB issued the document “Improvements to IFRSs” containing changes of an essentially technical and editorial nature to the existing international accounting standards and interpretations. The provisions of the document are effective as of the 2011 financial year.

At present, Snam Rete Gas is analysing the standards and interpretations mentioned and is assessing whether their adoption will have a significant impact on the financial statements.