1.the text of Article 29(1) shall be replaced by the following text: "1. Assets and liabilities to be included in consolidated accounts shall be valued according to uniform methods and in accordance with Sections 7 and 7a and Article 60 of Directive 78/660/EEC.";
2.in Article 34: (a) the reference in point 10 to "Articles 31 and 34 to 42" shall be replaced by a reference to "Articles 31 and 34 to Article 42c", and (b) the following points shall be added: "14. Where valuation at fair value of financial instruments has been applied in accordance with Section 7a of Directive 78/660/EEC: (a) the significant assumptions underlying the valuation models and techniques where fair values have been determined in accordance with Article 42b(1)(b) of that Directive; (b) per category of financial instruments, the fair value, the changes in value included directly in the profit and loss account as well as, in accordance with Article 42c of that Directive, changes included in the fair value reserve; (c) for each class of derivative financial instruments, information about the extent and the nature of the instruments, including significant terms and conditions that may affect the amount, timing and certainty of future cash flows; and (d) a table showing movements in the fair value reserve during the financial year. 15. Where valuation at fair value of financial instruments has not been applied in accordance with Section 7a of Directive 78/660/EEC: (a) for each class of derivative instruments: (i) the fair value of the instruments, if such a value can be determined by any of the methods prescribed in Article 42b(1) of that Directive; (ii) information about the extent and the nature of the instruments; and (b) for financial fixed assets covered by Article 42a of that Directive, carried at an amount in excess of their fair value and without use being made of the option to make a value adjustment in accordance with Article 35(1)(c)(aa) of that Directive: (i) the book value and the fair value of either the individual assets or appropriate groupings of those individual assets; (ii) the reasons for not reducing the book value, including the nature of the evidence that provides the basis for the belief that the book value will be recovered.";
3.in Article 36(2) the following point shall be added: "(e) in relation to the use by the undertakings of financial instruments and, where material for the assessment of assets, liabilities, financial position and profit or loss, - the financial risk management objectives and policies of the undertakings, including their policies for hedging each major type of forecasted transaction for which hedge accounting is used, and - the exposure to price risk, credit risk, liquidity risk and cash flow risk.";
4.the following Article shall be inserted: "Article 50a Not later than 1 January 2007, the Commission shall review the provisions in Article 29(1), Article 34(10), (14) and (15) and Article 36(2)(e) in the light of the experience acquired in applying provisions on fair value accounting and taking account of international developments in the field of accounting and, if appropriate, submit a proposal to the European Parliament and the Council with a view to amending the abovementioned Articles."