CVM Resolution No. 102 of May 20, 2022

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/ SP – ZIP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4th Floor, Brasília/DF – ZIP: 70712-900 – Brazil -Tel.: (61) 3327-2030/2031 www.cvm.gov.br

CVM RESOLUTION NO. 102, OF MAY 20, 2022
Approves the Consolidation of Technical Pronouncement CPC 21(R1) of the Accounting Pronouncements Committee - CPC, which deals with interim statements.

The PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION - CVM makes it known that the Board, in a meeting held on April 14, 2022, based on §§ 3 and 5 of art. 177 of Law No. 6.404, of December 15, 1976, combined with items II and IV of § 1 of art. 22 of Law No. 6.385, of December 7, 1976, as well as arts. 5 and 14 of Decree No. 10.139, of November 28, 2019,

APPROVED the following Resolution:

Art. 1. It makes mandatory for publicly-held companies the Technical Pronouncement CPC 21(R1), which deals with interim statements, issued by the Accounting Pronouncements Committee - CPC, as consolidated in Annex “A” to this Resolution.

Art. 2. Deliberation 673, of October 20, 2011, is revoked, from the effective date of this Resolution.

Art. 3. This Resolution enters into force on July 1, 2022.

Electronically signed by
Marcelo Barbosa
President

CVM RESOLUTION NO. 102, OF MAY 20, 2022
ANNEX “A”
ACCOUNTING PRONOUNCEMENTS COMMITTEE
TECHNICAL PRONOUNCEMENT CPC 21 (R1)
INTERIM FINANCIAL STATEMENTS
Correlation to International Accounting Standards – IAS 34 (IASB – BV 2011)

Summary Item
OBJECTIVE
SCOPE 1 – 3
DEFINITIONS 4
CONTENT OF INTERIM FINANCIAL STATEMENTS 5 – 25 Minimum components of the interim financial statement 8 – 8A Form and content of the interim financial statement 9 – 14 Significant events and transactions 15 – 16 Other disclosures 16A – 18 Disclosure in accordance with CPC Technical Pronouncements 19 Periods for which interim financial statements must be presented 20 – 22 Materiality 23 – 25 DISCLOSURE IN ANNUAL FINANCIAL STATEMENTS 26 – 27 RECOGNITION AND MEASUREMENT 28 – 42 Same accounting policies as annual 28 – 36 Revenue received seasonally, cyclically or occasionally 37 – 38 Cost incurred not homogeneously during the fiscal year 39 Applying the principles of recognition and measurement 40 Use of estimate 41 – 42 REPRESENTATION OF INTERIM PERIODS PREVIOUS INTERMEDIATE PERIODS 43 – 45 TRANSITIONAL PROVISIONS 46 – 49
APPENDIX A – Illustration of periods required to be presented
APPENDIX B – Examples of application of recognition and
measurement principles

CVM RESOLUTION NO. 102, OF MAY 20, 2022
APPENDIX C – Examples of the use of estimate
APPENDIX D – Interim financial statement and impairment loss
(IFRIC 10)

Objective
The objective of this Pronouncement is to establish the minimum content of an interim financial statement and the principles for recognition and measurement for complete or condensed interim period statements. Timely and reliable interim statements increase the ability of investors, creditors and other users to understand the entity's ability to generate profits and cash flows and its financial condition and liquidity.

Scope

This Pronouncement does not determine which entities must disclose or publish their interim financial statements, or with what frequency or deadline from the end of the interim period. However, governments, market regulators, stock exchanges and accounting bodies frequently require that entities, whose debt or equity securities are publicly traded, disclose or publish their interim financial statements. This Pronouncement is applicable if the entity is required to disclose or publish interim financial statements in accordance with the CPC Technical Pronouncements, Interpretations and Guidelines. Publicly-held companies, when not otherwise required by law, are encouraged to disclose interim financial statements in accordance with the recognition, measurement and disclosure principles contained in this Pronouncement. Specifically, publicly-held companies are encouraged to:
(a) make interim financial statements available at least semi-annually; and (b) provide them within 60 days after the end of the interim period.
Each financial statement, annual or interim, must be evaluated individually with respect to compliance with the CPC Pronouncements. The fact that the entity may not provide interim financial statements during a particular fiscal year or that it may provide interim financial statements that are not in accordance with this Pronouncement does not imply that the annual financial statements are not in accordance with the CPC Pronouncements.
If an entity's interim financial statement is described as being in compliance with the CPC Pronouncements, it must meet all the requirements of item 19 of this Pronouncement. Item 19 requires certain disclosures on this subject.

Definitions
4. The following terms are used in this Pronouncement with the specified meanings:
Interim period is a period less than that of the complete fiscal year.
Interim financial statement means a financial statement containing a complete

CVM RESOLUTION NO. 102, OF MAY 20, 2022 set of financial statements (as described in Technical Pronouncement CPC 26 – Presentation of Financial Statements) or a set of condensed financial statements (as described in this Pronouncement) of an interim period.

Content of the interim financial statement
5. Technical Pronouncement CPC 26 – Presentation of Financial Statements defines a complete set of financial statements as including the following components:
(a) balance sheet at the end of the period;
(b) income statements:
(i) of the period;
(ii) comprehensive for the period;
(c) statement of changes in equity for the period; (d) statement of cash flows for the period; (e) explanatory notes, comprising significant accounting policies and other explanatory information; (ea) comparative information with the previous period, as specified in items 38 and 38A of Technical Pronouncement CPC 26; (f) the opening balance sheet of the oldest comparative period, presented comparatively, when the entity applies an accounting policy retrospectively or proceeds to republication or retrospective restatement of items in the financial statements, or when it reclassifies items from its financial statements; and (g) statement of added value for the period, as per Technical Pronouncement CPC 09, if required by law or by some regulatory body or even if presented voluntarily.

In the interest of timeliness and cost considerations, as well as to avoid repetition of information previously disclosed, the entity may be required to disclose less information in interim periods than in its annual financial statements. This Pronouncement defines the minimum content of the interim financial statement as being the condensed financial statements and selected explanatory notes. The interim financial statement aims to provide an update based on the most recent complete annual financial statements. Therefore, they focus on new activities, events and circumstances and do not duplicate information previously reported.
This Pronouncement does not prohibit or discourage entities from disclosing or publishing the complete set of financial statements (as described in Technical Pronouncement CPC 26 – Presentation of Financial Statements) in their interim reports, instead of the condensed financial statements and selected explanatory notes. This Pronouncement also does not prohibit or discourage entities from including in the condensed financial statements more than the minimum items or selected explanatory notes according to this Pronouncement. The recognition and measurement guidelines of this Pronouncement also apply to complete financial statements that are presented for interim periods, and such statements must include all disclosures required by this Pronouncement (particularly the selected explanatory notes of item 16A), as well as those required by other pronouncements.

Minimum components of the interim financial statement

CVM RESOLUTION NO. 102, OF MAY 20, 2022
8. The interim financial statement must include, at least, the following components:
(a) condensed balance sheet;
(b1) condensed statement of income for the year; (b2) condensed statement of comprehensive income; (c) condensed statement of changes in equity; (d) condensed statement of cash flows; and (e) selected explanatory notes.

8A. The statement of comprehensive income may be presented as part of the statement of changes in equity. See Technical Pronouncement CPC 26 – Presentation of Financial Statements.

Form and content of the interim financial statement
9. If the entity discloses or publishes the complete set of financial statements in its interim report, the form and content of these statements must be in compliance with the requirements of Technical Pronouncement CPC 26 – Presentation of Financial Statements, for the complete set of financial statements.

If the entity discloses or publishes the set of condensed financial statements in its interim reports, such condensed statements must include, at minimum, each of the groups or subgroups of accounts and their totals that were presented in the most recent annual financial statements and the selected explanatory notes as required by this Pronouncement. Additional line items must be included if their omissions make the interim financial statement misleading.
In the statement presenting the components of interim period income, the entity must present basic and diluted earnings per share for this period when the entity is within the scope of Technical Pronouncement CPC 41 – Earnings Per Share.

11A. (Eliminated)

Technical Pronouncement CPC 26 - Presentation of Financial Statements provides guidance on the structure of financial statements. The Implementation Guide for Technical Pronouncement CPC 26 - Presentation of Financial Statements illustrates ways in which the balance sheet, the statement of comprehensive income and the statement of changes in equity should be presented.
(Eliminated)
The interim financial statement must be prepared on a consolidated basis if the entity's most recent annual financial statements are consolidated. The separate or individual financial statements of the parent are not consistent or comparable with the most recent consolidated annual financial statements. If the entity's financial statements include the separate or individual financial statements of the parent in addition to the consolidated financial statements, this Pronouncement does not require or prohibit the inclusion of the separate or individual financial statements of the parent in its interim

CVM RESOLUTION NO. 102, OF MAY 20, 2022 report.

Significant events and transactions
15. The entity must include in its interim financial statements an explanation of events and transactions that are significant for understanding the changes in the entity's equity, economic and financial position and its performance since the end of the last fiscal year. The information disclosed regarding these events and transactions must be used to update relevant information presented in the most recent annual financial statements.

15A. The user of the entity's interim financial statement must also have access to the last annual financial statement. It is therefore unnecessary for the explanatory notes of the interim financial statement to provide insignificant updates to information that has already been disclosed in the explanatory notes of the most recent annual financial statements.

15B. The following list contains a non-exhaustive list of events and transactions for which disclosure is required, if considered significant:
(a) write-down of inventories to net realizable value and reversal of such adjustments; (b) recognition of impairment loss (impairment) of financial assets, fixed assets, intangible assets, assets from contracts with customers or other assets and reversal of such loss; (c) reversal of any provisions for restructuring costs; (d) acquisitions and disposals of fixed asset items; (e) commitments to acquire fixed asset items; (f) settlements of judicial or administrative proceedings; (g) corrections of prior period errors; (h) changes in business or economic circumstances that affect the fair value of the entity's financial assets and financial liabilities, whether these assets and liabilities are recognized at fair value or amortized cost; (i) any failure to meet loan repayment deadlines or breach of loan contract that has not been resolved at the end or before the end of the reporting period; (j) transactions with related parties; (k) transfers between fair value hierarchy levels, used for fair value measurement of financial instruments; (l) changes in the classification of financial assets as a result of a change in the purpose or use of these assets; and (m) changes in contingent liabilities or contingent assets.

15C. The CPC pronouncements, individually, provide guidance on how to proceed with the disclosure required for many of the items listed in item 15B. When an event or transaction is significant for understanding the changes observed in the entity's equity, economic and financial position and its performance since the end of the annual period relative to the last fiscal year, its interim statements must contain explanations regarding the same

CVM RESOLUTION NO. 102, OF MAY 20, 2022 and an update of the relevant information included in the financial statements of the last fiscal year.

(Eliminated)

Other disclosures
16A. In addition to the disclosure of significant events and transactions, in accordance with items 15 to 15C, the entity must include the following information in the explanatory notes of the interim financial statements or anywhere else in these statements. The following disclosures must be made either in the interim financial statements or incorporated by cross-reference from the interim financial statements to other statements (such as management commentary or risk report), which are available to users of the financial statements under the same conditions as the interim financial statements and at the same time. If users of the financial statements do not have access to the information incorporated by cross-reference, under the same conditions and at the same time, the interim financial report is incomplete. They must normally be disclosed on a year-to-date basis:
(a) a statement that accounting policies and calculation methods are the same in the interim financial statements, when compared with the most recent annual financial statement; or, if such policies and methods were changed, a description of the nature and effects of that change; (b) explanatory comments on seasonal or cyclical interim operations; (c) the nature and amounts of unusual items due to their nature, size or incidence that affected assets, liabilities, equity, net income or cash flows; (d) the nature and values of changes in estimates of amounts disclosed in a previous interim period of the current year or changes in estimates of amounts disclosed in previous annual periods; (e) issuance, repurchases and redemptions of debt and equity securities; (f) dividends paid (aggregate or per share) separately for ordinary shares and for other types and classes of shares; (g) the following information by segment (segment information disclosure is required in the entity's interim financial statements only when Technical Pronouncement CPC 22 – Segment Information determines that the entity must disclose segment information in its annual financial statements):
(i) revenues from external customers, if included in the measurement of segment result, reviewed by the entity's principal operating decision maker, or presented regularly to the entity's principal operating decision maker; (ii) intersegment revenues, if included in the measurement of segment result, reviewed by the entity's principal operating decision maker, or presented regularly to the entity's principal operating decision maker; (iii) measurement of segment result; (iv) total assets for which there has been a significant change from the amounts disclosed in the last annual financial statement; (v) description of differences with respect to the last annual financial statement of the segmentation basis or the basis for measuring segment results; (vi) reconciliation of the total results of the reportable segments with the result before the

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL (CVM) Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – CEP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/SP – CEP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4th Floor, Brasília/DF – CEP: 70712-900 – Brazil - Tel.: (61) 3327-2030/2031 www.cvm.gov.br

CVM RESOLUTION NO. 102, OF MAY 20, 2022

taxes of the entity and before discontinued operations. However, if the entity allocates to reportable segments items such as income tax expense, the entity may reconcile the total of the results of the segments with the total result of the entity after these items. Material reconciliation items must be separately identified and described in such reconciliations;

(h) subsequent events to the end of the interim period that have not been reflected in the accounting statements of the interim period;

(i) effect of changes in the composition of the entity during the interim period, including business combinations, acquisition or loss of control of subsidiaries and long-term investments, restructurings and discontinued operations. In the case of business combinations, the entity must disclose the information required by CPC 15 – Business Combinations;

(j) for financial instruments, the fair value disclosures required by items 91 to 93(h), 94 to 96, 98 and 99 of CPC 46 – Fair Value Measurement and by items 25, 26 and 28 to 30 of CPC 40 – Financial Instruments: Disclosure;

(k) for entities that become or cease to be investment entities, as defined in CPC 36 – Consolidated Statements, the disclosures of item 9B of CPC 45;

(l) the disaggregation of revenue from contracts with customers, required by items 114 and 115 of CPC 47 – Revenue from Contracts with Customers.

17 and 18. (Eliminated)

Disclosure in accordance with CPC technical pronouncements

If the entity's interim financial statements are in accordance with this Pronouncement, such fact must be disclosed. The interim financial statement must not be described as being in accordance with the CPC Pronouncements, unless it complies with all requirements of the CPC Technical Pronouncements, Guidelines and Interpretations.

Periods for which interim financial statements must be presented

Interim financial statements must include the financial statements (condensed or complete) for the following periods:

(a) balance sheet at the end of the current interim period and the comparative balance sheet at the end of the immediately preceding fiscal year;

(b) income statement and statement of comprehensive income for the current interim period and year-to-date in the current fiscal year, compared with those of the interim periods of the previous fiscal year (current and year-to-date in the year). As allowed in Technical Pronouncement CPC 26 – Presentation of Financial Statements, the statement of comprehensive income may be presented in a separate statement or included within the changes in equity;

(c) statement of changes in equity accumulated in the year, with comparative statement also accumulated from the previous fiscal year;

(d) statement of cash flows accumulated in the year, with comparative statement also accumulated from the previous fiscal year.

For the entity whose business is highly seasonal, financial information for the last twelve months ended at the end of the interim period and for the comparable twelve months prior may be useful. Therefore, entities whose business is highly seasonal are encouraged to consider disclosing such information in addition to the information referred to in the previous item.
Appendix A illustrates the periods required to be presented by an entity that discloses semi-annually and for the entity that discloses quarterly.

Materiality

When deciding how to recognize, measure, classify or disclose an item in the interim financial statement, materiality must be assessed with respect to the information of the interim period. When making such materiality assessments, it must be recognized that interim measurements may be based on estimates to a greater extent than measurements made in annual financial statements.
Technical Pronouncement CPC 26 – Presentation of Financial Statements and Technical Pronouncement CPC 23 – Accounting Policies, Changes in Estimates and Errors define an item as material if its omission or misstatement could influence the economic decisions of users of the financial statements. Technical Pronouncement CPC 26 requires separate disclosures of material items, including (for example) discontinued operations, and Technical Pronouncement CPC 23 requires disclosure of changes in accounting estimates, errors and changes in accounting policies. The two Pronouncements do not contain quantitative guidelines regarding materiality.
While judgment is always required in assessing materiality, the recognition and disclosure decisions of this Pronouncement are based on the information of the interim period itself for reasons of understandability of the interim numbers. Thus, for example, unusual items, changes in accounting policies or estimates and errors are recognized and disclosed based on materiality with respect to the information of the interim period to avoid misleading inferences that may result from non-disclosure. The main objective is to ensure that the interim financial statement includes all information that is relevant to understanding the equity, economic and financial changes of the entity and its performance during the interim period.

Disclosure in annual financial statements

If the estimate of an amount reported in an interim period is significantly altered during the final interim period of the fiscal year, but a separate financial report has not been disclosed or published for that interim period, the nature and amount of the change in estimate must be disclosed in the explanatory notes of the annual financial statements of that fiscal year.
Technical Pronouncement CPC 23 requires the disclosure of the nature and (if applicable) the amount of a change in estimate that has both a material effect in the current period and has a material expected effect in subsequent periods. Item 16A(d) of this Pronouncement requires similar disclosures for an interim period. Examples include changes in

CVM RESOLUTION NO. 102, OF MAY 20, 2022

estimates of the final interim period regarding inventory losses, restructurings or impairment losses that were disclosed in previous interim periods of the fiscal year. The disclosures required by the previous item of this Pronouncement are consistent with the requirements of Technical Pronouncement CPC 23 and are intended to narrow the scope with respect only to changes in estimates. The entity is not required to include additional interim period information in its annual financial statements.

Recognition and measurement

Same accounting policies as annual

The entity must apply the same accounting policies in its interim financial statements as are applied in its annual financial statements, except for changes in accounting policies made after the date of the most recent annual financial statement, which will be reflected in the next annual financial statements. However, the frequency of the entity's reporting (annual, semi-annual or quarterly) must not affect the measurement of its annual results. To achieve this, measurements of interim periods must be made on a year-to-date basis.
The requirement that entities apply, in their interim financial statements, the same accounting policies as are applied in their annual financial statements, may seem to suggest that measurements of the interim period are made as if each interim period were an independent reporting period. However, by emphasizing that the frequency of the entity's reporting must not affect the measurement of annual results, item 28 recognizes that an interim period is part of a broader financial period. Measurements on a year-to-date basis may involve changes in estimates of amounts disclosed in previous interim periods of the current financial period. But the principles of recognition of assets, liabilities, revenues and expenses for these interim periods must be the same as those of the annual financial statements.
To illustrate:

(a) the principles for recognition and measurement of inventory losses to adjust to net realizable value, restructurings or impairment losses of the interim period must be the same as would be adopted if the entity were to prepare only the annual financial statements. However, if such items are recognized and measured in an interim period and the estimate changes in a subsequent interim period of the same fiscal year, the original estimates must be changed in subsequent interim periods both by accounting for additional loss amount and by reversal of previously recognized amount;

(b) costs that do not meet the definition of an asset at the end of an interim period must not be deferred in the balance sheet, either to await future information regarding their qualification as an asset, or for the purpose of smoothing earnings over the interim periods within the fiscal year; and

(c) income tax and social contribution expense must be recognized in each interim period based on the best estimate of the expected weighted average effective annual tax rate for the complete fiscal year. Amounts accounted for income tax and social contribution expense of an interim period must be adjusted in subsequent periods of that fiscal year if estimates of the annual tax rate change.

By CPC 00 – Conceptual Framework for Financial Reporting, recognition is the process of capturing, for inclusion in the balance sheet or income statement, an item that meets the definition of one of the elements of the financial statements. The definitions of assets, liabilities, revenues and expenses are fundamental for recognition at the end of both annual and interim reporting periods.
For assets, the same tests of future economic benefits are applicable both on interim dates and at the end of annual financial periods. Costs that, by their nature, would not qualify as assets at the end of the fiscal year also do not qualify on interim dates. Similarly, a liability at the end of an interim reporting period must represent an existing obligation on that date, just as it must represent at the end of the fiscal year.
An essential characteristic of revenues and expenses is that the inflows and outflows of corresponding assets and liabilities have already occurred. If such inflows and outflows have already occurred, the corresponding revenues and expenses must be recognized; otherwise, they must not be recognized. CPC 00 does not authorize the recognition of items in the balance sheet that do not satisfy the definition of assets or liabilities.
In measuring assets, liabilities, revenues, expenses and cash flows disclosed in the financial statements, the entity that reports only in annual terms is able to take into account information that becomes available throughout the fiscal year. Its measurements must be made, effectively, on a year-to-date basis.
The entity that discloses semi-annually must use information available in the middle of the year, or shortly after, to make measurements in its financial statements for the six-month period and information available at the end of the year or shortly after to make measurements in its financial statements for the twelve-month period. Twelve-month measurements will reflect possible changes in estimates of amounts disclosed for the first six-month period. The amounts reported in the interim financial statements for the first six-month period must not be adjusted retrospectively. Items 16A(d) and 26 require, however, that the nature and amount of any significant changes in estimates be disclosed.
The entity that discloses more frequently than semi-annually measures its revenues and expenses on a year-to-date basis for each interim period, using information available when each set of statements is being prepared. Amounts of revenues and expenses disclosed in current interim periods will reflect any change in estimates of amounts disclosed in previous interim periods of the fiscal year. Amounts disclosed in a previous interim period must not be adjusted retrospectively. Items 16A(d) and 26 require, however, that the nature and amount of any significant change in estimates be disclosed.

Revenue received seasonally, cyclically or occasionally

Revenues that are received seasonally, cyclically or occasionally within the fiscal year must not be accrued or deferred on interim dates if the accrual or deferral is not appropriate at the end of the entity's fiscal year.
Examples of this situation include revenue from dividends, royalties and government grants. Additionally, some entities consistently earn more revenue in certain interim periods of the fiscal year than in other interim periods, such as, for example, seasonal revenue from retailers. Such revenues must be recognized when they occur.

Cost incurred not homogeneously during the fiscal year

Costs that are incurred in a non-homogeneous manner during the entity's fiscal year must be accrued or deferred if, and only if, it is also appropriate to accrue or defer such types of costs at the end of the fiscal year.

Applying recognition and measurement principles

Appendix B provides examples of how to apply the general principles of recognition and measurement stipulated in items 28 to 39.

Use of estimate

The measurement procedures to be applied in the interim financial statement must be designed in such a way as to ensure that the resulting information is reliable and that all relevant material accounting information for understanding the equity, economic and financial position of the entity and its performance is adequately disclosed. Although measurements in both annual and interim reports are generally based on reasonable estimates, the preparation of interim financial statements generally requires greater use of estimation methods than the preparation of annual financial statements.
Appendix C provides examples of the use of estimates in interim periods.

Restatement of statements of previous interim periods

The change in accounting policy, which is not by specification of a new CPC Technical Pronouncement, must be reflected:

(a) by restating the financial statements of previous interim periods of the current fiscal year and the comparable financial statements of interim periods of any previous fiscal year that will be restated in the annual financial statements in accordance with Technical Pronouncement CPC 23 – Accounting Policies, Changes in Estimates and Errors; or

(b) when it is impracticable to determine the cumulative effects at the beginning of the fiscal year of applying the new accounting policy to all previous periods, by adjusting the financial statements of previous interim periods of the current fiscal year and the comparable interim statements of previous fiscal years, by applying the new accounting policy prospectively from the earliest date that is practicable.

The objective of the preceding principle is to ensure that a single accounting policy is applied to a particular class of transactions throughout the fiscal year. By Technical Pronouncement CPC 23, a change in accounting policy must be reflected by retrospective application, to the maximum extent possible of previous periods, with the restatement of the financial statements of those previous periods. However, if the accumulated amount of the adjustment relating to previous fiscal years is impracticable to determine, then, by Technical Pronouncement CPC 23, the new accounting policy must be applied prospectively from the earliest date that is practicable. The effect of the principle in item 43 is to require that, within the current fiscal year, any change in accounting policy be applied retrospectively or, if this is not practicable, prospectively, from, at most, the beginning of the fiscal year.
Allowing accounting changes to be reflected on an interim date within the fiscal year would be allowing two distinct accounting policies to be applied to a particular class of transactions within a single fiscal year. The result would imply difficulties in interim allocations, obscure operating results and impaired analysis and understandability of the interim period information.

Transitional provisions

This Technical Pronouncement replaces CPC 21 – Interim Statement, approved on 26.06.2009

47 to 53. (Eliminated).

Appendix A – Illustration of periods required to be presented
(This Appendix, which accompanies, but is not part of this Pronouncement, provides examples to illustrate the application of the principle of item 20).

Entity that discloses or publishes semi-annual interim financial statements

A1. The entity's fiscal year ends on December 31 (calendar year). The entity will present the following financial statements (condensed or complete) in its semi-annual interim report of June 30, 20X1:

Balance Sheet:
At June 30, 20X1 December 31, 20X0

Income Statement and Statement of Comprehensive Income:
6 months ending June 30, 20X1 June 30, 20X0

Statement of Cash Flows:
6 months ending June 30, 20X1 June 30, 20X0

Statement of Changes in Equity:
6 months ending June 30, 20X1 June 30, 20X0

Entity that discloses or publishes quarterly interim financial statements

A2. The entity's fiscal year ends on December 31 (calendar year). The entity will present the following financial statements (condensed or complete) in its three quarterly interim reports, of March 31, 20X1 (1st quarter 20X1), June 30, 20X1 (2nd quarter 20X1) and September 30, 20X1 (3rd quarter 20X1):

Balance Sheet at the end of the interim period and comparative balance sheet from the immediately preceding financial year:
31-Mar-20X1 and 31-Dec-20X0
30-Jun-20X1 and 31-Dec-20X0
30-Sep-20X1 and 31-Dec-20X0

Income Statements and Statement of Comprehensive Income for the current interim period and year-to-date, compared with the same periods of the previous year:
1st Quarter 20X1:
(three months) 01-Jan-20X1 to 31-Mar-20X1 and 01-Jan-20X0 to 31-Mar-20X0 2nd Quarter 20X1:
(six months) 01-Jan-20X1 to 30-Jun-20X1 and 01-Jan-20X0 to 30-Jun-20X0 (three months) 01-Apr-20X1 to 30-Jun-20X1 and 01-Apr-20X0 to 30-Jun-20X0 3rd Quarter 20X1:
(nine months) 01-Jan-20X1 to 30-Sep-20X1 and 01-Jan-20X0 to 30-Sep-20X0

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL
Rua Sete de Setembro, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – CEP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/ SP – CEP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4th Floor, Brasília/DF – CEP: 70712-900 – Brazil -Tel.: (61) 3327-2030/2031 www.cvm.gov.br

CVM RESOLUTION NO. 102, OF MAY 20, 2022

(three months) 01-Jul-20X1 to 30-Sep-20X1 and 01-Jul-20X0 to 30-Sep-20X0 Statement of Changes in Equity accumulated during the year up to the date of the interim period, compared with the same period of the previous year:
1st Quarter 20X1:
(three months) 01-Jan-20X1 to 31-Mar-20X1 and 01-Jan-20X0 to 31-Mar-20X0 2nd Quarter 20X1:
(six months) 01-Jan-20X1 to 30-Jun-20X1 and 01-Jan-20X0 to 30-Jun-20X0 3rd Quarter 20X1:
(nine months) 01-Jan-20X1 to 30-Sep-20X1 and 01-Jan-20X0 to 30-Sep-20X0 Statement of Cash Flows accumulated during the year up to the date of the interim period, compared with the same period of the previous year:
1st Quarter 20X1:
(three months) 01-Jan-20X1 to 31-Mar-20X1 and 01-Jan-20X0 to 31-Mar-20X0 2nd Quarter 20X1:
(six months) 01-Jan-20X1 to 30-Jun-20X1 and 01-Jan-20X0 to 30-Jun-20X0 3rd Quarter 20X1:
(nine months) 01-Jan-20X1 to 30-Sep-20X1 and 01-Jan-20X0 to 30-Sep-20X0

CVM RESOLUTION NO. 102, OF MAY 20, 2022

Appendix B – Examples of application of the recognition and measurement principles
(This Appendix, which accompanies, but is not part of this Pronouncement, provides examples of application of the general principles of recognition and measurement established in items 28 to 39).

Employer payroll taxes and social security contributions B1. If taxes levied on payroll or contributions to state-sponsored pension funds are stipulated on an annual basis, the corresponding employer expense must be recognized in the interim period, using the estimate of the average effective annual tax rate on payroll or contribution rate, even if a large part of the payments is made early in the fiscal year. A common example would be a payroll tax or social security contribution that is imposed up to a certain maximum income level per employee. For higher-income employees, the maximum mandatory income would be reached before the end of the fiscal year and the employer would make no further payments until the end of the year.

Major maintenance and periodic renewals
B2. The cost of a major planned periodic maintenance or revision or other seasonal expense that are expected to occur later in the year is not anticipated for interim reporting purposes, unless an event has imposed a legal or constructive obligation on the entity. The mere intention or need to incur expenses related to future events is not sufficient for the emergence of the obligation.

Provision
B3. The provision must be recognized when the entity truly has no realistic alternative other than the transfer of economic benefits, as a result of an event that has created a legal or constructive obligation. The amount of the obligation must be adjusted up or down, with the corresponding gains or losses recognized in the statement of income, if the entity's best estimates of the amount of the obligation change. B4. This Pronouncement requires the entity to apply the same recognition and measurement criteria for the provision, both in interim periods and at the end of the fiscal year. The existence or non-existence of an obligation to transfer economic benefits is not a function of the breadth of the reporting period. It is a matter of fact.

Year-end bonuses
B5. The nature of year-end bonuses varies considerably. Some are earned simply by continued employment over a period of time. Some bonuses are earned based on monthly, quarterly or annual operational performance measures. They can be purely discretionary, contractual or based on years of historical precedent. B6. A bonus must be anticipated for interim reporting purposes if, and only if: (a) the bonus is a past legal or customary obligation that makes the bonus a non-formalized (constructive) obligation for which the entity truly has no other realistic alternative but to make the payments; and (b) a reliable estimate of the obligations can be made. Technical Pronouncement CPC 33 – Employee Benefits provides guidance on this.

Contingent lease payments
B7. Contingent lease payments can be an example of a legal or non-formalized (constructive) obligation that must be recognized as a liability. If the lease contract has provisions for contingent payments, based on the achievement of a certain level of annual sales by the lessee, the obligation may arise in the interim periods of the fiscal year, before the required annual sales level has been reached, if such required sales level is expected to be reached and the entity, thus, has no other realistic alternative but to make the future lease payments.

Intangible asset
B8. The entity must apply the definition and recognition criteria for intangible assets in the same way in the interim period and in the annual report. Costs incurred before the intangible asset recognition criteria are met must be recognized as expense. Costs incurred after the specific point in time when such criteria are met must be recognized as part of the cost of the intangible asset. Cost deferred as an asset in the interim accounting statement in the expectation that the recognition criterion will be met later in the fiscal year is not a justifiable procedure.

Retirement and pension
B9. Retirement and pension costs for the interim period must be calculated on a year-to-date basis, through an actuarial rate determined at the end of the previous fiscal year, adjusted by significant market fluctuations since that time and by decreases, settlements or other significant singular events.

Compensable short-term absences, vacations, holidays and others B10. Accumulated compensable absences are those that carry over from one period to another and that can be used in future periods if the right obtained in the current period is not fully used. Technical Pronouncement CPC 33 – Employee Benefits requires the entity to measure the expected cost of an obligation by accumulating compensable absences in the amount by which the entity expects to pay them as a result of unused rights that have been accumulated at the end of the reporting period. This principle must also be applied at the end of interim reporting periods. Likewise, the entity must not recognize any expense or liability for non-accumulated compensable absences at the end of an interim reporting period, nor should it recognize them at the end of the annual reporting period.

Other planned costs that may be incurred, but irregular B11. The entity's budget may include certain costs expected to be incurred irregularly

CVM RESOLUTION NO. 102, OF MAY 20, 2022

during the fiscal year, such as charity contributions and employee training costs. Such costs are generally discretionary even if they are planned and tend to recur year after year. Recognizing an obligation at the end of an interim reporting period for such costs that have not yet been incurred is generally not consistent with the definition of a liability.

Measuring interim period income taxes
B12. Interim period income taxes are accounted for on an accrual basis using the rate that should be applicable to the expected total annual profit, i.e., the estimated average effective annual rate is applied to the profit before taxes in the interim period.
B13. This is consistent with the basic concept stipulated in item 28 whereby the same accounting recognition and measurement principles must be applied to both interim financial statements and annual financial statements. Income taxes must be computed on an annual basis. They must be calculated by applying, to the interim profit before taxes, the rate that will be applicable to the expected total annual profit, i.e., the average effective annual rate of each tax. This average effective annual rate must reflect a mix of expected progressive rate structures to be applicable to the entire annual profit, including changes promulgated or substantially promulgated in the tax rates scheduled to take effect closer to the end of the fiscal year. Technical Pronouncement CPC 32 – Income Taxes provides guidance on substantial changes promulgated in these rates. The estimated average annual rate of income taxes must be re-estimated on a year-to-date basis, consistent with item 28 of this Technical Pronouncement. Item 16A(d) requires disclosure of significant changes in estimates. B14. As far as possible, effective annual average rates are estimated separately for each tax jurisdiction and applied individually to the interim profit before taxes of each jurisdiction. Similarly, if different tax rates are applicable to different categories of profit (such as capital gains or profit earned in particular sectors), as far as possible, individual rates should be applied to each individual category of interim profit before taxes. While the degree of precision is desirable, this may not be achievable in all cases and the weighted average of the rates between jurisdictions or between profit categories should be used if it is considered a reasonable approximation of the effects that would be obtained when using more specific rates. B15. To illustrate the application of the previous principle, the entity that reports its interim period on a quarterly basis expects to earn $10,000 of profit before taxes in each quarter and operates in a tax jurisdiction with a 20% rate on the first $20,000 of annual profits and 30% on all other additional profits. The observed (realized) profits are equal to the expected ones. The table below shows the amount of tax that must be reported in each quarter:

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Annual Income tax expense $ 2,500 $ 2,500 $ 2,500 $ 2,500 $ 10,000

$10,000 in taxes are expected to be paid for the entire year on $40,000 of pre-tax profits. Therefore, the estimated average effective annual rate is 25%.
B16. As another illustration, the entity that reports quarterly earns $15,000 of pre-tax profits in the first quarter, but expects to incur a loss of $5,000 in each of the three remaining quarters (therefore zero profit for the year) and operates in a tax jurisdiction where the estimated average effective annual rate is 20%. The table below shows the amount of income tax reported in each quarter:

1st
Quarter
2nd
Quarter
3rd
Quarter
4th
Quarter
Annual
Income tax expense
$ 3,000 (-)$ 1,000 (-)$ 1,000 (-)$ 1,000 $ 0

The estimated average effective annual rate is 20% for all cases, regardless of whether there is profit or loss before taxes.

Difference between financial reporting year and fiscal year B17. If the financial reporting year (fiscal year) and the fiscal year are different, the income tax expense for the interim reporting periods of the fiscal year must be measured using estimated effective weighted average rates separately for each of the fiscal years, applied to the portion of pre-tax profits earned in each of these fiscal years. B18. To illustrate the previous item, the entity's fiscal year (financial reporting year) ends on June 30 and it reports its interim information on a quarterly basis. The fiscal year ends on December 31. In the fiscal year starting on July 1 – Fiscal Year 1 - and ending on June 30 – Fiscal Year 2, the entity earns pre-tax income of $10,000 in each quarterly reporting period. The estimated average annual rate is 30% in Fiscal Year 1 and 40% in Fiscal Year 2. The comparison of the total tax due in the fiscal year ($14,000) with the total profit of the fiscal year ($40,000), resulting in an average rate of 35%, is inappropriate. Each fiscal year must have its own estimated average annual rate individually.

Calendar Year 1 Jul to
30 Sep 20X1
1 Oct to
31 Dec 20X1
1 Jan to
31 Mar 20X2
1 Apr to
30 Jun 20X2
Financial Reporting Year
1st quarter fiscal year 1
2nd quarter fiscal year 1
3rd quarter fiscal year 1
4th quarter fiscal year 1
Fiscal Year 3rd quarter fiscal year 1
4th quarter fiscal year 1
1st quarter fiscal year 2
2nd quarter fiscal year 2

CVM RESOLUTION NO. 102, OF MAY 20, 2022

LAIR per quarter $ 10,000 $ 10,000 $ 10,000 $ 10,000 Estimated average annual rates 30% 30% 40% 40%

Quarterly income tax expenses $ 3,000 $ 3,000 $ 4,000 $ 4,000 Total income tax due for the year $ 14,000 Total LAIR for the year $ 40,000

Tax credit
B19. Some tax jurisdictions grant their taxpayers tax credits to cover taxes due based on the amount of investments, exports, research and development expenses or other bases. Anticipations of tax benefits of these types for the whole year are generally reflected in the calculation of the estimated average effective annual tax rate, as such credits are granted and calculated on an annual basis in most tax laws and regulations. On the other hand, tax benefits related to events that occur at a single point in time must be recognized in the calculation of the income tax expense for the interim period, in the same way that special income tax rates applicable to particular categories of profit are not mixed into a single effective annual rate. Additionally, in some tax jurisdictions, tax benefits or tax credits, including those related to investments and export levels, when reported on income tax returns, are more similar to government grants and must be recognized in the interim period in which they occur.

Deductible or usable tax loss and tax credit
B20. The benefits of deductible tax losses must be reflected in the interim period in which the corresponding tax losses occur. Technical Pronouncement CPC 32 – Income Taxes guides that “the benefit related to a tax loss that can be offset to recover current taxes of a previous period must be recognized as an asset”. The corresponding reduction in income tax expense or increase in income tax revenue must also be recognized. B21. Technical Pronouncement CPC 32 mentions that “a deferred tax asset must be recognized for the utilization of unused tax losses and unused tax credits as it is likely that there will be future taxable profits against which the tax losses and tax credits can be utilized”. Technical Pronouncement CPC 32 provides criteria for assessing the likelihood of future taxable profits against which unused tax losses and credits can be utilized. These criteria must be applicable at the end of each interim reporting period and, if met, the effects of usable tax losses must be reflected in the calculation of the estimated average effective annual rate of income tax. B22. To illustrate, the entity that reports its interim periods on a quarterly basis has usable tax losses of $10,000 for tax purposes at the beginning of the current fiscal year, for which a deferred tax asset was not recognized. The entity earns $10,000 in the first quarter of the current year and expects to earn $10,000 in the other three remaining quarters. Excluding the tax benefit, an average annual rate of 40% is expected. The income tax expenses are as follows:

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Pre-tax profit of each quarter $ 10,000 $ 10,000 $ 10,000 $ 10,000 (a) Total expected annual profit $ 40,000 (-) Usable tax credit ($ 10,000) (=) Tax base $ 30,000 (x) Effective rate 40% (=) Estimate of tax due for the whole year $ 12,000 (a) Total expected annual profit $ 40,000 (b) Estimate of tax due for the year $ 12,000 (b/a) Estimated average effective rate 30%

1st Quarter 2nd Quarter 3rd Quarter 4th Quarter Pre-tax profit of each quarter $ 10,000 $ 10,000 $ 10,000 $ 10,000 Quarterly income tax expenses $ 3,000 $ 3,000 $ 3,000 $ 3,000

Contractual change or advance purchase price
B23. Price reductions by volume or discounts and other contractual changes in the prices of raw materials, labor or other goods and services must be anticipated in interim reporting periods, by both the payer and the payee, if it is likely that they will be earned or will become effective. Therefore, price reductions and contractual discounts must be anticipated, but discretionary reductions and discounts must not be anticipated because the resulting asset or liability do not satisfy the conditions of the Conceptual Framework that an asset must be a resource controlled by the entity as a result of a past event and that a liability must be a present obligation whose settlement is expected to result in an outflow of resources.

Depreciation and amortization
B24. Interim period depreciation and amortization must be based only on assets held during the interim period. They must not take into account acquisitions or disposals of assets planned to occur until the end of the fiscal year.

Inventory
B25. Inventories must be measured for interim reporting purposes by the same principles used for annual financial statements. Technical Pronouncement CPC 16 - Inventories establishes standards for recognition and measurement of inventories. Inventories present particular problems at the end of any

CVM RESOLUTION NO. 102, OF MAY 20, 2022

interim period.

SECURITY AND EXCHANGE COMMISSION OF BRAZIL (CVM) Seven of September Street, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Cincinato Braga Street, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/ SP – ZIP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Corporate Financial Center Building, S.404/4th Floor, Brasília/DF – ZIP: 70712-900 – Brazil - Tel.: (61) 3327-2030/2031 www.cvm.gov.br

CVM RESOLUTION NO. 102, OF MAY 20, 2022

period of reporting because it is necessary to determine quantities, costs, and net realizable values. Nevertheless, the same principles must be applied to inventories in interim periods. To save cost and time, entities often use estimates to measure inventories at interim dates to a greater extent than at the end of the fiscal year. The following are some examples of how to apply the net realizable value test at an interim date and how to treat production variations at interim dates.

Net realizable value of inventory

B26. The net realizable value of inventories must be determined with reference to selling prices and costs related to complete and sell them at interim dates. The entity must reverse a write-down to net realizable value in a subsequent reporting period only if it is appropriate to do so at the end of the fiscal year.

B27. (Eliminated)

Variations in production costs in interim periods

B28. Variations in price, efficiency, expenses, and volume of the industrial entity must be recognized in the result of the interim reporting period in the same way that such variations are recognized in the income statement at the end of the fiscal year. Deferring variations that are expected to be absorbed by the end of the fiscal year is not appropriate because it may result in reporting inventories in the interim period at a value higher or lower than their share in current production costs.

Foreign currency translation gains and losses

B29. Gains and losses from foreign currency translation must be measured in interim periods using the same principles used for annual financial statements.

B30. Technical Pronouncement CPC 02 – Effects of Changes in Exchange Rates and Translation of Financial Statements specifies how to convert the financial statements of entities abroad into the presentation currency, including guidance on the use of average or closing exchange rates and guidance on the recognition of resulting adjustments in the income statement or in other comprehensive income. Consistent with Technical Pronouncement CPC 02, effective average or closing rates must be used in interim reporting periods. The entity must not anticipate changes in exchange rates expected for the remaining period to the end of the current fiscal year when converting the statements of entities abroad at an interim date.

B31. If Technical Pronouncement CPC 02 requires that translation adjustments be recognized as revenue or expense in the period in which they occur, this principle must be applied for each interim reporting period. The entity must not defer any translation adjustments in an interim reporting period if there is an expectation that the adjustments will be reversed before the end of the fiscal year.

CVM RESOLUTION NO. 102, OF MAY 20, 2022

Interim financial statements in a hyperinflationary economy

B32. Interim financial statements in hyperinflationary economies must be prepared using the same principles used for annual financial statements.

B33. Technical Pronouncement CPC 42 – Accounting and Disclosure in Highly Inflationary Economies (or, alternatively, the full monetary correction method (CMI) established in Brazil, while this Technical Pronouncement is not issued) requires that the entity's financial statements, whose reporting currency is that of a hyperinflationary economy, be presented in terms of the current unit of measurement at the end of the reporting period and gains and losses on the net monetary position must be included in net income. In addition, comparative financial information reported for prior periods must be restated to the current unit of measurement.

B34. The entity must follow these same principles for interim reporting purposes, thereby presenting all interim information in the unit of measurement of the end of the reporting period, with gains and losses resulting from the net monetary position included in the net income of the interim period. The entity must not annualize the recognition of gains and losses. Nor should it use an estimated annual inflation rate when preparing the interim financial statement in a hyperinflationary economy.

Reduction to recoverable amount of assets (impairment)

B35. Technical Pronouncement CPC 01 – Reduction to Recoverable Amount of Assets requires that impairment losses be recognized if the recoverable amount has fallen below the carrying amount.

B36. This Technical Pronouncement requires the entity to apply, in interim reporting periods, the same tests for reduction to recoverable amount and the same criteria for recognition and reversal of impairment losses that are applied at the end of the fiscal year. This does not mean, however, that the entity must necessarily make detailed calculations of the reduction to recoverable amount of assets at the end of each interim reporting period. Instead, the entity must make reviews of significant evidence indicative of impairment loss, since the end of the most recent fiscal year, to assess whether such calculations are necessary.

CVM RESOLUTION NO. 102, OF MAY 20, 2022

Appendix C – Examples of the use of estimation
(This Appendix, which accompanies but is not part of this Pronouncement, provides examples to illustrate the application of the principle of item 41)

C1. Inventory: complete inventories and valuation procedures may not be required for inventories at interim dates, even if they are made at the end of the fiscal year. It may be sufficient to make estimates at interim dates, based on sales margins.

C2. Classification of assets and liabilities as current and non-current: entities may make more rigorous investigations for the classification of assets and liabilities as current or non-current at annual reporting dates than at interim reporting dates.

C3. Provision: determination of the appropriate amount of provision (such as warranty provisions, environmental costs, and site restoration costs) can be complex and often costly and time-consuming. Entities sometimes hire specialists to assist in annual calculations. To make similar estimates at interim dates, it is often necessary to update annual provisions, and not to hire external specialists to make new calculations.

C4. Pension: Technical Pronouncement CPC 33 – Employee Benefits requires the entity to determine the present value of defined benefit obligations and the market value of plan assets at the end of each reporting period and encourages the entity to involve qualified actuarial professionals in the measurement of such obligations. For interim reporting purposes, reliable measurements are generally obtained by extrapolating the last actuarial valuation.

C5. Income tax: entities may calculate income tax expense and deferred tax liability at annual dates by applying tax rates for each jurisdiction to measure the profit of each jurisdiction. Item B14 of Appendix B recognizes that, while such a level of precision is also desirable at interim dates, it may not be achievable in all cases, and that the weighted average of the rates of the jurisdictions or categories of profit may be used as a reasonable approximation of the effect of using more specific rates.

C6. Contingency: the measurement of contingencies may involve the opinion of legal experts or other consultants. Formal reports from independent experts are sometimes obtained with reference to contingencies. Such opinions on litigation, claims, valuations, and other contingencies and uncertainties may or may not be necessary at interim dates.

C7. Revaluation and fair value accounting: Technical Pronouncement CPC 27 – Property, Plant and Equipment allows entities to choose as their accounting policy the revaluation model, when legally permitted, through which items of property, plant, and equipment are revalued to fair value. Similarly, Technical Pronouncement 28 – Investment Property requires the entity to determine the fair value of investment properties. For such measurements, the entity may rely on valuations by qualified professionals at annual reporting dates, and not at interim reporting dates.

CVM RESOLUTION NO. 102, OF MAY 20, 2022

C8. Intercompany reconciliation: some intercompany balances, which are reconciled at detailed levels in the preparation of consolidated statements at the end of the fiscal year, may be reconciled with lower levels of detail in the preparation of consolidated financial statements at interim dates.

C9. Specialized sectors: for reasons of complexity, cost, and time, interim period measurements of specialized sectors may be less precise than those at the end of the fiscal year. An example may be the calculation of technical provisions for insurance companies.

CVM RESOLUTION NO. 102, OF MAY 20, 2022

Appendix D – Interim financial statement and impairment loss (impairment)
(IFRIC 10)
(This Appendix, which is part of CPC 21, corresponds to Interpretation IFRIC 10 Interim Financial Reporting and Impairment, issued by the IASB – International Accounting Standards Board)

References
CPC 01 – Reduction to Recoverable Amount of Assets; CPC 21 – Interim Statement; CPC 48 – Financial Instruments

Background

D1. The entity is required to perform the asset impairment test for goodwill at the end of each reporting period and, if required, must recognize impairment losses on that date, in accordance with CPC 01 – Reduction to Recoverable Amount of Assets. However, at the end of the subsequent reporting period, there may have been changes in conditions such that impairment losses could have been reduced or avoided if the asset impairment test had been performed only on that date. This appendix provides guidance on whether such impairment losses should or should not be reversed.

D2. This appendix deals with the interaction between the requirements of CPC 21 – Interim Statement and the recognition of impairment losses on goodwill, in CPC 01, and deals with the effects of these interactions on interim and subsequent annual financial statements.

Subject

D3. Item 28 of Technical Pronouncement CPC 21 – Interim Statement requires the entity to apply the same accounting policies in its interim financial statements that are applied in its annual financial statements. It also states that “the frequency of the entity’s reporting (annual, semi-annual, or quarterly) must not affect the measurement of its annual results. To achieve this objective, measurements of interim periods must be made on a year-to-date basis.”

D4. Item 124 of Technical Pronouncement CPC 01 states that “Impairment recognized for goodwill must not be reversed in a subsequent period.”

D5 and D6. (Eliminated)

D7. This Appendix discusses the following subject:
Should the entity reverse impairment losses on goodwill recognized in an interim period if the loss would not have been recognized, or would have been recognized at a lower amount, if the impairment test had occurred only at the end of the subsequent reporting period?

CVM RESOLUTION NO. 102, OF MAY 20, 2022

Consensus

D8. The entity must not reverse an impairment loss recognized in a previous interim period with respect to goodwill.

D9. The entity may not extend this consensus by analogy to other areas of potential conflict between this CPC 21 – Interim Statement and other CPC pronouncements.

D10. (Eliminated)

CVM Resolution No. 102 of May 20, 2022

Lineage: In force

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