In accordance with the ‘deregulation offensive’ of the (former) Federal Government, overarching national regulations implemented on the basis of EU regulations are to be identified and eliminated. The 2019 Anti-Gold Plating Act was the first step in this direction.
Austria: Significant Changes of the UGB
Below we would like to report on the most significant practical changes that concern the Austrian Business Code (Unternehmensgesetzbuch, UGB).
Repealing of materiality with regard to presentation and disclosure
The introduction of the principle of materiality for presentation and disclosure in section 196a of the Austrian Business Code (UGB), introduced within the framework of the 2014 Austrian Law on Changes in Accounting (RÄG), has been repealed. This means that materiality will be applied in accordance with generally accepted accounting principles as was the case before RÄG 2014 Application of this principle is thus no longer restricted by law to presentation and disclosure, which means that it could also be extended to recognition and measurement.
Measurement of personnel provisions
Section 211 para. 1 UGB was amended to the effect that only provisions for pensions or comparable long-term obligations need to be measured in line with actuarial principles. Severance payment obligations, anniversary bonuses or similar long-term obligations may once again (from a legal perspective) be calculated using a financial method, provided there are no material concerns in individual cases. This is unlikely to have any significant impact on accounting practice, as AFRAC Opinion 27 has previously also considered this approach to be permissible. However, it continues to be advisable to undertake a calculation at regular intervals to check the actuarial and financial calculations in order to justify the simpler calculation method.
Measurement of fixed assets
The special provision introduced by RÄG 2014, namely that financial assets that are not investments must be written down to the lower fair value, no longer applies. This means that the relevant benchmark of value in fixed assets is again the fair value. This will, however, continue to be decisive for financial investments with an available market price,
Measurement of current assets
Current assets will in future be written down to the lower stock market price or market price on the balance sheet date, as was the case before RÄG 2014. If these values cannot be determined, the fair value must be used.
Summary: Anti-Gold-Plating Act 2019
The 2019 Anti-Gold Plating Act made several changes to the Austrian Business Code (UGB). These amendments primarily clarify interpretation difficulties and questions, with the legal situation before RÄG 2014 being partially restored in the process; material changes and questions are therefore unlikely to arise in practice here.
When will the Anti Gold Plating Act take effect?
The new regulations have been in force since publication in the Federal Law Gazette on 28 May 2019with the exception of
- section 196a including headline,
- section 211 para. 1 and
- section 278 para. 1 of the Austrian Business Code (UGB).
These will take effect on 1 July 2019 and are to be applied to financial years commencing after 31 December 2018. If you have questions about the Anti Gold Plating Act or the Austrian Business Code do not hesitate to contact our experts!