"NEWS August 4, 2016-The draft of the new OIC equity stakes in 28 on budget"

Posted by on Aug 4, 2016

As a result of the changes introduced into national law by Legislative Decree No. 139/2015, which implemented Directive 2013/34/EC, the Italian accounting Body has published the updated (drafts and in consultation until 31 August) of OIC 28 dedicated to recognition of equity stakes.

The main changes made to the accounting policy OIC 28 focused on deleting those steps not strictly relevant to the preparation of the financial statements and a substantial reorganization and review of accounting for the remaining related mainly to the classification and content of the voices of shareholders ' equity and shareholders ' equity item detection and handling in transactions between companies and partners.

Transactions between the company and shareholders can indeed give rise to claims or debts towards the same. The company signs up a credit to shareholders when members assume an obligation towards society (for example, when the member subscribes to a capital increase); While enrolled in a debt to shareholders when he takes on an obligation in respect of members (for example, when the shareholders ' meeting approves the reduction in share capital for withdrawal of a partner). In the draft of the new OIC is later reported a non-exhaustive list of the main operations between companies and partners, and its accounting effects, such as the capital increase through contributions in cash or as a result of the conversion of a convertible bond, or cases of reduction of the share capital for withdrawal, due to late payment or failure to follow in terms of buying shares of the parent company.

Another innovation contained in the draft of the new OIC 28 concerns the insertion of headings that make up the equity of the "reserve for hedging of expected cash flows" (A.VII) that accommodates changes in fair value of derivative financial instruments which arose in the context of expected cash flow hedges.

In accordance with article 11, paragraph 1, number 2426-bis of the Italian civil code: "the reserves in equity resulting from measurement at fair value of derivatives used for hedging of future cash flows expected from another financial instrument or programmed operation are not considered in the calculation of the equity for the purposes of articles 2412, 2442, 2447, 2446 and 2433 and If positive, are unavailable and cannot be used to cover losses. "

For registration and handling of this reserve is mostly an accounting policy from the OIC called "financial derivatives".

In the draft of the new version of the CIU 28 table is offered, appearing in the notes referring to the information to be provided under the number c-bis, paragraph 1 of article 2427 of the civil code, on reserve for hedging of expected cash flows.


The new version of the CIU also incorporates 28 legislative changes relating to article 2357-ter of the Italian civil code, under which the shares are no longer listed as assets of the company with equity, but unavailable reserve contribution directly to deduction from equity through a negative reserve, the "negative reserve for Treasury shares" (item A).

Therefore, in the new version of the CIU 28, buying (and selling) of Treasury shares is considered to be a decrease (or increase) in equity.

In the event that the General Meeting decides to cancel Treasury shares, the company, following the shareholders ' meeting, shall cancel the entry in. X "negative reserve for Treasury shares" and simultaneously reduce the registered capital for the nominal value of the shares cancelled. Any difference between the carrying amount of the reserve and the nominal value of the shares cancelled is attributed to increment or decrement the equity.

In the event that the General Meeting decides to dispose of Treasury shares, any difference between the carrying amount of the item a. X "negative reserve for Treasury shares" and the salvage value of shares sold must be attributed to increment or decrement of another category of equity.

As with reference to Treasury shares has not been provided for transitional rules, the news of the Decree. 139/2015 should apply also to transactions already in existence as at 1 January 2016, the effects of which are then to be detected retroactively under OIC 29.

by Sudha M