Regulatory Alerts2014-10-25
CVM Instruction No. 232 of February 10, 1995
The Brazilian Securities and Exchange Commission (CVM) issued Instruction No. 232 to amend Articles 3, 4, and 5 of Instruction No. 207/1994, establishing the specific condensed financial information that publicly-held companies must disclose when publishing abbreviated financial statements. The regulation mandates that these summaries include condensed balance sheets and income statements with full monetary correction, along with detailed explanatory notes covering accounting changes, related-party investments, debt terms, and tax loss carryforwards. Additionally, the instruction requires companies to reconcile consolidated results with those of the controlling entity and to submit both complete and summarized financial reports to the CVM and relevant stock exchanges.
CVM INSTRUCTION NO. 232, OF FEBRUARY 10, 1995.
Provides for additional publications to those ordered by Law No. 6404, of December 15, 1976.
The PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION makes it known that the Collegiate Body, in a meeting held on this date, and based on the provisions of item I of the sole paragraph of Article 22 of Law No. 6385, of December 7, 1976, combined with the provisions of paragraph 1 of Article 289 of Law No. 6404, of December 15, 1976,
RESOLVED:
Art. 1. Articles 3, 4, and 5 of CVM Instruction No. 207, of February 1, 1994, shall enter into force with the following wording:
“Art. 3. The financial statements of publicly-held companies that are required to publish them in the disclosure organs indicated in items “a” and “b” of Article 1 of this instruction, may be published in a summarized form, compared with data from the previous fiscal year, provided that the following information is disclosed at a minimum:
a) condensed balance sheet with full monetary correction, presenting at a minimum the values related to the following account groups: Current Assets, Long-Term Receivables, Permanent Assets subdivided into Investments, Fixed Assets, and Deferred Charges, Current Liabilities, Long-Term Payables, Future Period Results, and Shareholders' Equity divided into Share Capital, Capital Reserves, Revaluation Reserves, Profit Reserves, and Accumulated Profits or Losses;
b) condensed income statement with full correction, including at a minimum the values related to Net Sales, Gross Profit, Total Operating Expenses, Equity Method Results, Operating Profit or Loss, Non-Operating Results (if relevant), Provision for Income Tax, and Net Profit or Loss for the Period;
c) explanatory notes including at a minimum the following information: Changes in accounting practices compared to the previous fiscal year; Investments in other Companies, when relevant, specifying the final amount and the equity method result for each investment, discriminating the values related to goodwill, discounts, and provisions for losses; Interest rates, maturities, and real burdens on long-term debts; Number of shares comprising Share Capital, discriminating types and classes; Reconciliation of the result calculated with full correction with that calculated under corporate law; Amount of fiscal loss eligible for use in subsequent periods.
Art. 4. The information required in Article 3 shall be extracted from the consolidated financial statements for publicly-held companies required to prepare them, adding an explanatory note reconciling the consolidated result with the result of the controlling entity.
Art. 5. The publicly-held company shall forward to the Securities and Exchange Commission and, if applicable, to the Stock Exchanges where it is registered, both the complete financial statements in the format and deadline provided for in Article 16 of CVM Instruction No. 202, of December 6, 1993, as well as the financial statements presented in summarized form according to Article 3 above.”
Art. 2. This Instruction enters into force on the date of its publication.
Signed original by THOMÁS TOSTA DE SÁ President