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3. Summary of significant accounting policies

3.2 New and amended standards adopted by the Group

3.2 New and amended standards adopted by the Group

A number of amendments to standards are mandatory for the first time for the financial year beginning January 1, 2020. However, the Group does not have to change its accounting policies or make retrospective adjustments as a result of adopting these amendments and improvements to the standards. The amendments to IFRS 3 Business combinations – Definition of a business have been applied by UCB in assessing whether the acquisitions done in 2020 (see Note 8 ) are to be considered as acquisitions of a business. The outcome of these assessments has not been different under the amended guidance. UCB has decided not to perform the optional concentration test which is allowed under the amended guidance.

UCB applied reliefs provided by the Amendments to IFRS 9 Financial instruments and IFRS 7 Financial instruments: disclosures – Interest rate benchmark reform on its interest rates swaps (cash flow hedges) with current nominal amount of US$ 1 470 million and interest rate swaps (fair value hedges) with nominal amount of € 725 million. As provided under the Amendments, UCB assumed that the interest rate on which the hedged cash flows are based (US$ LIBOR and/or EURIBOR) does not change because of the reform. Hence, when hedged cash flows may change because of IBOR reform, this will not cause the ‘highly probable’ test to be failed. Moreover, as provided under the Amendments, UCB assumes minimal ineffectiveness due to changes in cash flows because of IBOR reform. Therefore, the economic relationship between hedged item and hedging instrument should not be impacted. For the fair value hedges of fixed-rate debts, UCB applied the relief provided by the Amendment to IFRS 9 relating to the fact that the risk component only needs to be separately identifiable at initial hedge designation. The transition to the new benchmarks reference rates is the scope of a multidisciplinary project, with objective to cover the changes of systems, processes and valuations models while ensuring that the existing hedges and the underlying exposure fallback languages remain aligned. It is expected to be operational by the deadlines of the respective reforms (end 2021).