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Brazil |
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Update for January 2010
Update for February 2009
Update for January 2009
Update for September 2008
Update for July 2008
Update for July 2007
Update for May 2007
Update for March 2006
Sao Paulo:
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Financial Reporting Framework in Brazil
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Listed Companies
On 13 July 2007, the Securities and Exchange Commission of Brazil – Comissão de Valores Mobiliários, or CVM (www.cvm.gov.br) – issued Rule No. 457 requiring listed companies to publish their consolidated financial statements according to IFRSs, starting with reporting periods ending in 2010. Use of IFRSs will be optional for listed companies from 2007 through 2009.
Banks
In 2006, the Central Bank of Brazil decided that any bank required by law or regulation to publish financial statements in Brazil (including domestic owned and foreign owned, listed and unlisted) will have to prepare and publish consolidated financial statements in full compliance with IFRSs starting with years ending 31 December 2010.
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Update for January 2010
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IASB and Brazil sign Memorandum of Understanding
On 28 January 2010, two accountancy bodies in Brazil signed a Memorandum of Understanding (MOU) with the IASB establishing principles for future cooperation aimed at supporting adoption of IFRSs in Brazil and fostering the engagement of the Brazilian accounting standard-setter in the international accounting standard setting process. The two Brazilian organisations are:
- Conseho Federal de Contabilidade (CFC, the Brazilian Federal Council of Accounting), and
- Comitê de Pronunciamentos Contábieis (CPC, the Brazilian Accounting Pronouncements Committee – the standard-setter).
IASB Chairman Sir David Tweedie was in Brazil for the signing. Full IFRSs take effect in Brazil starting in 2010 for listed companies and financial institutions. CPC will eliminate the remaining differences between Brazilian GAAP and IFRSs by the end of 2010. Regarding small and medium-sized entities, the MOU states:
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The CPC will endeavour efforts in order to have all relevant documents issued by the IASB or the International Accounting Standards Committee Foundation with respect ot SMEs translated into Brazilian Portuguese, including educational material. CPC shall also engage its best efforts in its endorsement process and in its broad dissemination, including support to training, aiming at facilitating adoption of the IFRS for SMEs in Brazil.
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Click to download the IASB-Brazil Memorandum of Understanding (Bilingual) (PDF 2,429k).
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Update for February 2009
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Three New IFRS publications from Deloitte Brazil
Deloitte (Brazil) has published three IFRS publications in Portuguese. Brazil will require IFRS consolidated financial statements for all listed companies and all banks, both domestic and foreign owned, starting with years ending 31 December 2010. The three new Brazilian IFRS publications are:
Matrix of the Impact of Switching from Brazilian GAAP to IFRSs
Deloitte Brazil has developed a matrix highlighting which IFRSs are likely to cause the biggest changes from Brazilian GAAP and suggesting priorities that companies might consider in planning their transition to IFRSs. The priorities are derived by evaluating the impact of an IFRS and its complexity in relation to current Brazilian standards. Click for IFRS – Matriz de Impacto e Prioridades: Áreas de foco na implementação do IFRS.
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Update for January 2009
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2008 Financial Reporting Guide and Checklist from Deloitte Brazil
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Deloitte Brazil has published the 2008 edition of its Annual Guide for Financial Statements. The Portuguese language guide, titled Demonstrações financeiras – Orientações referentes ao exercício de 2008, addresses the principal issues in preparing 2008 financial statements of Brazilian companies. The guide highlights the key changes to Brazilian GAAP in the past year. There are also updates on on-going convergence efforts with IFRSs and new statutory accounting changes brought about by Law 11.638/07. The guide includes discussion about the latest pronouncements issued by the Brazilian Committee on Accounting Pronouncements (Comitê de Pronunciamento Contábil, or CPC) during 2008, making it one of the most up-to-date references in Brazil. Deloitte Brazil has also published a companion 2008 financial statement checklist. Click for: |
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September 2008 Update
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Changes to accounting practices in Brazil
Recent amendments to the Brazilian Corporate Law (Law No. 11,638) have introduced changes to accounting practices generally accepted in Brazil, effective for fiscal years beginning on or after 1 January 2008. The Law designed primarily to update accounting practices under Brazilian Corporate Law 'to enable the convergence of Brazilian accounting practices with accounting standards generally accepted in the international capital markets'. Deloitte (Brazil) has published bulletins in English and Portuguese explaining the changes:
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July 2008 – Comparison of Brazilian GAAP and IFRSs
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Brazil's two professional accountancy bodies – Conselho Federal de Contabilidade (CFC) and Instituto dos Auditores Independentes do Brasil (IBRACON) – have jointly published a comparison of Brazilian accounting standards and IFRSs. Sumário da Comparação das Práticas Contábeis Adotadas no Brasil com as Normas Internacionais de Contabilidade - IFRS presents a side-by-side comparison as of January 2006, in Portuguese. All Brazilian listed companies will be required to switch to IFRSs starting in 2010 (optional from 2007), as will most banks and other financial institutions. The accountancy bodies and government in Brazil are considering whether to extend the IFRS requirement to unlisted companies. We are grateful to the CFC and IBRACON for allowing us to post this comparison on IAS Plus. Click to download the Comparison of Brazilian GAAP and IFRSs (PDF 307k, 73 pages). You will find links to our other GAAP Comparisons here. |
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Update for July 2007
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Listed companies in Brazil will use IFRSs starting 2010
On 13 July 2007, the Securities and Exchange Commission of Brazil – Comissão de Valores Mobiliários, or CVM (www.cvm.gov.br) – issued Rule No. 457 requiring listed companies to publish their consolidated financial statements according to IFRSs, starting with reporting periods ending in 2010. Use of IFRSs will be optional for listed companies from 2007 through 2009. Previously (in 2006), the Central Bank of Brazil decided that any bank required by law or regulation to publish financial statements in Brazil (including domestic owned and foreign owned, listed and unlisted) will have to prepare and publish consolidated financial statements in full compliance with IFRSs starting with years ending 31 December 2010.
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Update for May 2007
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Proposal to Require IFRSs for All BOVESPA Listed Companies
The Brazilian Securities and Exchange Commission has published an Exposure Draft of a proposal to require all companies listed on the BOVESPA (Sao Paulo Stock Exchange) to publish consolidated financial statements fully compliant with IFRSs starting with years ending 31 December 2010. Earlier adoption would be encouraged.
An accounting standards board was formed in Brazil in August 2006, called Comite de Pronunciamentos Contabeis (CPC) – the Committee for Accounting Pronouncements. Its mandate clearly states that its mission is to converge Brazilian accounting requirements towards IFRSs. CPC was formed by agreement of six founding members:
- ABRASCA (the association of the Brazilian listed companies),
- APIMEC (the association for the analysts),
- BOVESPA (the Stock Exchange),
- CFC (the Federal Council of Accounting),
- IBRACON (the Institute of Independent Auditors), and
- FIPECAFI (the accounting research foundation, representing the academics.
In 2006, the Central Bank of Brazil formally decided that any bank required by law or regulation to publish financial statements in Brazil (be they domestic owned or foreign owned) will have to prepare and publish consolidated financial statements in full compliance with IFRSs starting with years ending 31 December 2010. For that purpose, the Central Bank disclosed in March 2006 that its technical departments had until 31 December 2006 to fully list all banking regulations still in force relating to financial reporting, consolidate them in a single document, and come up with recommendations of changes to converge to IFRSs and the legal procedures necessary. Such legal procedures might involve revoking the ruling by the Central Bank, revising it at the level of the National Monetary Council (that sits above Central Bank in certain issues), or eventual changes in law that would then be proposed by the President of the Republic to Congress.
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Update for March 2006
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March 2006 Update) – Brazil will require IFRSs for financial institutions
On 9 March 2006, the Board of Directors of The Central Bank of Brazil decided to require that all Brazilian banks, and all financial institutions licensed by Central Bank to do business in Brazil (including leasing companies and savings and loan institutions), fully comply with IFRSs beginning with the financial statements for the year ending 31 December 2010. That decision was announced in an Official Communication (PDF 93k Portuguese). [Click here for the Unofficial English Translation (PDF 65k).]
The Board has asked each of its departments responsible for bank regulation to identify the changes that will be required to existing Bank regulations to achieve the 2010 target and to report back by 31 December 2006. Thereafter, working groups will be formed to propose solutions so that there will be no impediments to using IFRSs in 2010. The Central Bank also announced that it intends to require auditors of financial statements of banks and all other licensed financial institutions to follow the International Standards of Auditing (ISAs) issued by International Auditing and Assurance Standards Board.
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