Article 19 Discounting of cash flows(Seventh subparagraph of Article 61(3) of Regulation (EU) No 1303/2013)

United Kingdom

Only cash flows to be paid out or received by the operation shall be taken into consideration when calculating costs and revenue. Cash flows shall be established for each year in which they are paid out or received by the operation over the reference period referred to in article 15(2).

Non-cash accounting items such as depreciation, any reserves for future replacement costs and contingency reserves shall be excluded from the calculation.

Cash flows shall be discounted back to the present using a financial discount rate of 4 % in real terms as an indicative benchmark for public investment operations ~~F1co-financed by the ESI Funds~~ funded by support for rural development ~~F2or support under Regulation 508/2014~~.

~~F3Member States~~ The relevant authority may use a financial discount rate other than 4 % if they provide a justification for that benchmark and ensure it is used consistently across similar operations in the same sector.

Values other than 4 % may be justified on the grounds of:

(a)

the ~~F4Member State's~~ constituent nation’s specific macroeconomic conditions and international macroeconomic trends and conjunctures; or

(b)

the nature of the investor or the implementation structure, such as public private partnerships; or

(c)

the nature of the sector concerned.

F56.

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Annotations

Textual amendments

F1: Words in Art. 19(3) substituted in so far as they apply to support for rural development and support under Regulation 508/2014 (31.12.2020) by The European Structural and Investment Funds Common Provisions Rules etc. (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/783), regs. 1, 5(12)(a); 2020 c. 1, Sch. 5 para. 1(1)
F2: Words in Art. 19(3) omitted in so far as they apply to domestic support for rural development (W.) (26.3.2021) by virtue of The Agricultural Support (Miscellaneous Amendments) (Wales) (EU Exit) Regulations 2021 (S.I. 2021/400), regs. 1(2), 8(15)
F3: Words in Art. 19(4) substituted in so far as they apply to support for rural development and support under Regulation 508/2014 (31.12.2020) by The European Structural and Investment Funds Common Provisions Rules etc. (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/783), regs. 1, 5(12)(b); 2020 c. 1, Sch. 5 para. 1(1)
F4: Words in Art. 19(5)(a) substituted in so far as they apply to support for rural development and support under Regulation 508/2014 (31.12.2020) by The European Structural and Investment Funds Common Provisions Rules etc. (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/783), regs. 1, 5(12)(c); 2020 c. 1, Sch. 5 para. 1(1)
F5: Deleted by Commission Delegated Regulation (EU) 2019/886 of 12 February 2019 amending and correcting Delegated Regulation (EU) No 480/2014 as regards the provisions on financial instruments, simplified cost options, audit trail, scope and content of audits of operations and methodology for the selection of the sample of operations and Annex III.

Notes on Chapter II

Textual amendments

F1: Words in Ch. 2 heading substituted in so far as it applies to support for rural development and support under Regulation 508/2014 (31.12.2020) by The European Structural and Investment Funds Common Provisions Rules etc. (Amendment etc.) (EU Exit) Regulations 2019 (S.I. 2019/783), regs. 1, 5(4); 2020 c. 1, Sch. 5 para. 1(1)
F2: Words in Ch. 2 heading omitted in so far as it relates to domestic support for rural development (W.) (26.3.2021) by virtue of The Agricultural Support (Miscellaneous Amendments) (Wales) (EU Exit) Regulations 2021 (S.I. 2021/400), regs. 1(2), 8(4)