Accounting Manual for Deposit-Collecting Institutions and Holding Company — BCR — SV

THE STANDARDS COMMITTEE OF THE CENTRAL RESERVE BANK OF EL SALVADOR,

CONSIDERING:
I. That Article 4, letter c) of the Law on Supervision and Regulation of the Financial System establishes that the Superintendence of the Financial System has among its powers to conduct individual and consolidated supervision of the members of the financial system, as well as the supervision of other regulated subjects.
II. That Article 7 of the Law on Supervision and Regulation of the Financial System establishes who are subject to the provisions of said Law and therefore to the supervision of the Superintendence of the Financial System.
III. That Article 35, letter f) of the Law on Supervision and Regulation of the Financial System establishes that it is the obligation of the supervised to provide adequate accounting disclosure of the economic and financial reality, and to have the backing of their internal and external audits.
IV. That Article 99, letter c) of the Law on Supervision and Regulation of the Financial System establishes that it is the responsibility of the Standards Committee of the Central Reserve Bank to approve the Technical Standards for the preparation, presentation, and dissemination of Financial Statements and supplementary information of the members of the financial system; to determine the accounting obligations and the principles according to which they must keep their accounts; and to establish criteria for the valuation of assets, liabilities, and the creation of provisions and reserves for risks.

THEREFORE,

by virtue of the regulatory powers conferred by Article 99 of the Law on Supervision and Regulation of the Financial System, AGREES to issue the following:

ACCOUNTING MANUAL FOR DEPOSIT-COLLECTING INSTITUTIONS AND HOLDING COMPANY

CONTENTS

CHAPTER I
GENERAL PROVISIONS
Comprises the general application provisions in the recording of operations of supervised financial entities subject to this accounting framework.

CHAPTER II
ACCOUNTING FRAMEWORK
Comprises the accounting principles that entities will apply, which will be composed of sections indicating how to proceed for the accounting of regulated elements.

Sections of the Chapter:
SECTION I. Recognition of interest on active credit risk operations.
SECTION II. Accounting reclassification of loans, contingencies, and suspension of interest recognition.
SECTION III. Write-off of impaired credit risk assets and subsequent recoveries.
SECTION IV. Recognition, measurement, and presentation of extraordinary assets.
SECTION V. Recognition of commissions on loans and contingent operations.
SECTION VI. Creation of reserves for country risk.
SECTION VII. Specific treatments defined for the presentation of financial statements.
SECTION VIII. Preparation and publication of financial statements: presentation and disclosure.
SECTION IX: Financial investments.

CHAPTER III
CHART OF ACCOUNTS
Comprises the list of accounts provided for the accounting of respective operations.

CHAPTER IV
ACCOUNTING APPLICATIONS MANUAL
Comprises the description of account concepts and the main applications by which they will be affected.

CHAPTER V
FINANCIAL STATEMENTS
Includes models of financial statements.

CHAPTER VI
OTHER PROVISIONS AND VALIDITY
Comprises provisions corresponding to sanctions, repeals, transitional aspects, unforeseen aspects, and validity.

CHAPTER I
GENERAL PROVISIONS

INTRODUCTION
This "Accounting Manual for Financial Institutions Collecting Deposits and Holding Company", hereinafter the Manual, aims to present in a uniform and homogeneous manner the accounting recording of the operations performed by these entities. Thus constituting an essential tool for the integration of financial statements, which must faithfully reflect the financial situation, results of operations, and management of the entities, so that they constitute a useful instrument for the analysis of information and decision-making by the administrators and shareholders of the entities, the Superintendence of the Financial System, hereinafter Superintendence; the Central Reserve Bank of El Salvador, hereinafter Central Bank, investors, users of financial services, and the general public. The Manual is mandatory for all entities detailed within the scope of this document. The accounting aspects contained in this Manual, for the recording of different types of operations related to the financial system that require prior authorization, do not constitute express authorization to carry out the operations referred to, and entities subject to the application of this Manual must comply with the legal provisions and technical standards issued for such effect.
OBJECTIVES
2.1. General Objective
To provide a technical instrument for the uniform recognition, measurement, presentation, and disclosure of economic events, based on the financial and regulatory frameworks established by the Central Reserve Bank of El Salvador through its Standards Committee, as well as international best practices for banking operations. (1)

2.2. Specific Objectives
To have useful and timely information about the financial situation of entities that contributes to decision-making by administrators, owners, supervisory and regulatory bodies, depositors, and other users of financial statements. To obtain homogeneous information that reflects the economic and financial situation and management results in an integrated manner, allowing for the monitoring of supervised entities and the financial system as a whole.

SCOPE
The Manual is composed of the General Provisions, Accounting Framework, Chart of Accounts, Accounting Applications Manual, and the formats of the Financial Statements.
The subjects obliged to comply with the provisions established in this Manual are:
a) Banks incorporated in El Salvador; b) Branches of foreign banks established in the country; c) Cooperative Banks; d) Savings and Credit Societies; e) Financial Federations regulated by the corresponding Law; f) Agricultural Development Bank, insofar as it does not contradict its Creation Law; (3) g) Mortgage Bank of El Salvador, S.A.; h) Development Bank of the Republic of El Salvador and the Economic Development Fund, insofar as they do not contradict their Creation Laws; and (2) (3) i) Exclusive-purpose Holding Companies. (2)
PROCESSING OF ACCOUNTING OPERATIONS
Entities subject to this Manual may process their accounting operations by the means they deem convenient, provided it allows for their analysis and supervision. For this purpose, such entities must request authorization from the Superintendence regarding the accounting information processing system they will use, when they commence operations or when there is a change in said system. The documentary or electronic source of each accounting entry must contain sufficient explanations regarding the operation being recorded.
MODIFICATION OF THE MANUAL
The coding and openings established in this Manual must be respected in their entirety; therefore, no new elements, classifications, headings, accounts, and sub-accounts different from those already established may be opened. However, designations may be added starting from digit 11 as necessary, provided they correspond to the nature of the account from which they originate. When an operation or transaction not provided for in this Manual originates, entities must communicate this to the Central Bank, attaching the accounting criteria they intend to use, as well as the accounts to be used, describing the transaction or event and the reasons justifying the proposed treatment. Such communication must be sent physically or by email, duly signed by the responsible persons. The Central Bank will analyze the request, and if the proposed accounting application is appropriate and implies a modification of the Manual, the corresponding regulatory process will be activated for its approval. Prior to the modification of the Manual, the entity must temporarily account for the operation or transaction in sub-accounts corresponding to the designations "others" in the heading identified by the entity, and when the Central Bank approves the aforementioned modification, the entity must reclassify the transaction to the accounts that have been approved for such effects. (2)
RESPONSIBILITIES
6.1. Accounting Records
It is the responsibility of the Administration to record the entity's operations, from the preparation of vouchers, documents, records, and files of transactions, to the formulation of financial statements and other reports for their corresponding analysis, interpretation, and accounting consolidation.

6.2. Timeliness of Accounting Recording
Likewise, it is the responsibility of the administration to timely account for transactions, which will be recorded in accounts whose title corresponds to their nature.

6.3. The Accountant
It is the responsibility of the administration to hire the general accountant, who should preferably be a public accounting professional, with sufficient training, capacity, and experience, and must meet the requirements established in the Law Regulating the Practice of Public Accounting and Auditing, and be authorized by the Council for the Surveillance of the Public Accounting and Auditing Profession.

SUBMISSION OF INFORMATION
7.1. Timeliness
Entities will remit the corresponding financial information within the deadlines defined in this Manual. Lack of timeliness in the submission will be sanctioned in accordance with what is established in the Law on Supervision and Regulation of the Financial System. Entities must designate an official responsible for timely compliance with information requests made by the Superintendence, without prejudice to the responsibility that falls on the legal representative, internal auditor, and general accountant.

7.2. Frequency

7.2.1. Weekly Balances
Weekly financial position statements (cut off on Friday) will be prepared and delivered to the Superintendence within the deadlines established in the Technical Standards for Submission and Collection of Information for the Statistical Accounting System of Financial Entities (NRP-51). (3) The provision established in the previous paragraph regarding the submission of weekly financial position statements will not be applicable to Exclusive-purpose Holding Companies. (2)

7.2.2. Monthly Financial Statements
Entities must obligatorily present monthly financial statements, which must be delivered to the Superintendence within the deadlines established in the Technical Standards for Submission and Collection of Information for the Statistical Accounting System of Financial Entities (NRP-51). (3)

7.3. Mechanisms
The required financial information will be submitted to the Superintendence by entities, via digital network of information systems, modem, or any other data storage medium, according to the technical specifications contained in the Technical Standards for Submission and Collection of Information for the Statistical Accounting System of Financial Entities (NRP-51), without prejudice to paper supports that may be required according to circumstances. (3)

7.4. Procedures
Financial statements must be submitted to the Superintendence according to the provisions established in this Manual. In the case of financial conglomerates, exclusive-purpose societies (shareholders); and controlling banks, they will be responsible for submitting consolidated statements with their subsidiaries, within the deadlines and with the periodicity indicated in this Manual. In order to guarantee that the transmission of financial statements is carried out free of arithmetic errors or in the structure of the file sent, entities must perform validations on their files prior to sending. The Superintendence will confirm the correct receipt of the information transmitted by entities, through automatic validations in accordance with the corresponding regulatory framework.

7.5. Level of Detail
The minimum accounting information to be submitted to the Superintendence will comprise sub-accounts up to 10 digits; without prejudice to norms requiring a greater level of detail.

ECONOMIC PERIOD
The economic and accounting period will comprise from January 1 to December 31 of each year.
ACCOUNTING RECORDS
9.1. Accounting Books
The movement and balance of accounts will be recorded in main books, and the sub-accounts in auxiliary books as deemed necessary.
The main books that must be legalized are those indicated by the Commercial Code.
Accounting records must comply with what is established in Title II, of Book Two, of the Commercial Code, insofar as applicable.
In particular, in the Book of Financial Statements, the Statement of Financial Position, the Statement of Comprehensive Income, the Statement of Cash Flows, the Statement of Changes in Equity, and the corresponding notes must be recorded, in accordance with what is established in Article 442 of the Commercial Code and International Financial Reporting Standards (IFRS). The figures recorded in this book must be presented in thousands of United States dollars.

9.2. Tax Books
Entities must keep the books of legal requirement, in accordance with current tax laws.

INTERNAL CONTROL APPLIED TO ACCOUNTING RECORDS
Accounting records must contain the necessary detail regarding the characteristics of assets, liabilities, equity, income, and expenses so that all information contained in the different financial statements to be rendered can be clearly derived from them, which will maintain the necessary correlation both among themselves, when applicable, and with the accounting basis. The entity must maintain at all times an auxiliary detail of each of the accounting sub-accounts, when the nature of the accounts so requires. Entities will establish internal control systems directed to reasonably ensure the reliability of accounting records, as well as the correct integration of operations, in accordance with the internal accounting policies of each entity. Therefore, regardless of the accounts required to form the financial statements, details will be established as deemed necessary for the preparation of the rest of the complementary informative statements, developing an analytical accounting that provides sufficient information for the calculation of costs and yields of the different centers, products, business lines, or other aspects of interest for adequate management control.
RECORDING AND ARCHIVING OF ACCOUNTING DOCUMENTATION
Additionally, entities are obliged to keep all administrative books required of them. The operations registered in them must be backed by sufficient documentation proving the economic fact and complying with what is established in the Commercial Code. Operations will be recorded as they take place, in such a way as to avoid unnecessary delays. Entities must archive the documentation backing their operations, using the means they consider, provided that such means have all security and control measures. The retention time will be in accordance with what is regulated in the corresponding laws.
CONCEPTUAL FRAMEWORK OF ACCOUNTING
12.1. Generally Accepted Accounting Principles and Standards
Accounting will be governed according to the following precedence:
a) Salvadoran legislation that establishes specific accounting treatments; b) Accounting Standards issued by the Central Bank through its Standards Committee; and c) International Financial Reporting Standards (IFRS), always adopting among the alternatives offered by these Standards the most prudent option and clearly disclosing such situation in the notes to the financial statements, the above always provided that it does not contravene any provision contained in the Accounting Standards issued by the Central Bank's Standards Committee. (3) Financial entities will apply what is established in the IFRS Conceptual Framework for the generation of general purpose financial information. The IFRS that entities must apply are the standards and interpretations in the active Spanish version, which have been issued by the International Accounting Standards Board (IASB) and the International Sustainability Standards Board (ISSB) and which comprise: (3) a) International Financial Reporting Standards (IFRS); b) International Accounting Standards (IAS); c) IFRS Interpretations Committee (IFRIC) Interpretations; d) SIC Interpretations; and e) International Sustainability Reporting Standards. (3) Subsequent to the validity of this Manual, when changes in IFRS are approved or in case of issuance of a new IFRS by the IASB or ISSB, entities may adopt such changes or new standards, provided that they do not contradict what is indicated in Salvadoran legislation that establishes specific accounting treatments or in the Accounting Standards issued by the Central Bank through its Standards Committee, these last two prevailing in case of conflicts. (3)

12.2. Criteria for Accounting Recognition or Recording of Elements
The initial recognition, subsequent measurement, presentation, and accounting disclosure of the elements of financial statements must be carried out following the provisions established in this Accounting Manual, in the regulatory framework or in IFRS, as applicable, attending to the type of transaction carried out. Based on the above, for the estimation of expected credit losses for the investment portfolio, entities will use the expected credit losses methodology established in IFRS for financial instruments in the investment portfolio recorded at amortized cost and at fair value with changes in other comprehensive income. Entities, prior to contracting financial derivatives for purposes other than risk hedging, must request the corresponding authorization from the Central Reserve Bank to carry out this type of operations. Likewise, the entity must enter into a negotiation of financial derivative instruments only if it fully understands how they work; therefore, the entity must demonstrate that it has at least the internal capacity to value the intended instrument, observing at least the valuation frequency, valuation methodology, formulas, parameters, and sources to be used; otherwise, it should not enter into negotiations of this type of instruments.

CHAPTER II
ACCOUNTING FRAMEWORK

SECTION I
RECOGNITION OF INTEREST ON ACTIVE CREDIT RISK OPERATIONS

OBJECTIVE

This Section aims to regulate the recognition of interest originated or incurred in active operations.

SCOPE
This Section applies to all active financial operations related to credit risk assets, which imply the incurrence of interest.
RECOGNITION
Interest receivable shall be recognized daily.
The calculation of interest in active operations shall be carried out from the day the resources are delivered to the user until one day before the repayment date, unless otherwise provided for the benefit of the debtor.

Interest that, while in off-balance sheet accounts, becomes part of interest receivable, is integrated into the capital of a new loan, or is paid with loans granted by the same financial institution, must also be accounted for as a deferred liability. Such liability shall decrease only by cash recoveries.

The creditor and its debtors may freely agree on the form of payment of interest that, while in off-balance sheet accounts, becomes part of the asset.

SECTION II
ACCOUNTING RECLASSIFICATION OF LOANS, CONTINGENCIES, AND SUSPENSION OF INTEREST RECOGNITION

OBJECTIVE
This Section aims to regulate the transfer of loans from performing to non-performing portfolio, the conversion of a contingency into a loan, and the suspension of interest recognition originated on credit operations that are more than ninety days past due.

SCOPE
This Section applies to loans that are transferred to non-performing portfolio, contingencies that convert into loans, and the suspension of interest recognition.
GENERAL RULES
Overdue of more than ninety days on an installment or on the principal and interest balance shall cause the principal to be classified as non-performing portfolio. The overdue status may be on principal, interest, or both.

For the purposes of this Section, extensions granted shall not modify the delinquency status of the loan.
The timeframes for transfers established in this Section are maximums; therefore, institutions may reduce them.
Interest accounting on credit risk assets shall be suspended in the following cases:
a) Credit operations with more than 90 days past due; and b) Performing credit operations with amortization installments overdue for more than 90 days.

In cases of suspension of interest accrual, institutions must maintain control of accrued interest in off-balance sheet accounts. (3)

RECLASSIFICATION OF CREDIT RISK ASSETS
Only the principal shall be transferred to non-performing portfolio. The causes motivating the transfer are the following:
a) There are installments or balances with overdue status exceeding ninety days; b) Financial guarantees honored; c) Commercial letters of credit that fall within the scope of subsection c) of this paragraph; and (3) d) From the moment the Board of Directors of the entity or the relevant party decided to collect it through judicial means.

The principal may be reintegrated into performing portfolio when it has no installments or balances with overdue status exceeding ninety days, and from its transfer, the corresponding interest shall be accrued.

When an entity makes payment for default on a guarantee, bond, or letter of credit by a client, it shall account for it as a non-performing loan until the document converting it into a loan is issued or until its total recovery. If the entity makes the aforementioned payment, it shall proceed to eliminate the corresponding "Rights and Future Commitments".

The payment made by an issuer or confirmer of a commercial letter of credit on behalf of a client, in the case where the payment is made prior to the client's amortization, shall be accounted for in accordance with existing agreements between the entity and the client; as follows:
a) If the letter of credit is at sight or at term; applying the reimbursement in cash received from the client against the receivable account originated from the entity's settlement to the beneficiary at the moment it became due; b) If there are financing agreements for letters of credit between the parties, originating the respective loan operation applying it against the receivable account; and c) In the event that the client does not comply with the payment provided in subsection a) and the indications in subsection b) do not apply, the entity shall proceed as follows:
i. Recognizes an impairment expense against the net receivable account less liquid collateral received on the contract date;
ii. Recognizes a non-performing loan against the estimated loss for impairment (safety reserves), provided there is certainty of recovering the disbursed amount; and
iii. When an entity makes payment for default on a guarantee, bond, or letter of credit by a client, it shall account for it as a non-performing loan until the document converting it into a loan is issued or until its total recovery.
If the entity makes the payment mentioned in subsections three and four of this paragraph, it shall proceed to eliminate the corresponding "Contingent Accounts".

Loans granted to pay at maturity must be considered non-performing for the purposes of this Section. Exceptions are those guaranteed with cash deposits, those granted for production, for the construction of real estate, and all those in which the source of payment of the original loan is linked to the completion of the work or project.

SECTION III
WRITE-OFF OF IMPAIRED CREDIT RISK ASSETS AND SUBSEQUENT RECOVERIES

OBJECTIVE
The objective of this Section is to regulate the write-off of credit risk assets from the Statement of Financial Position when they are considered wholly impaired.
SCOPE
This Section applies to all credit risk assets that are completely impaired.
WRITE-OFF OF CREDIT RISK ASSETS FROM THE STATEMENT OF FINANCIAL POSITION
All loans and receivables that are completely impaired as of the date of the financial statements must be written off from the Statement of Financial Position; that is, assets whose expected contractual cash flows have been determined as unrecoverable.

Specific elements that regulatorily require the write-off of credit risk assets in the absence of an autonomous action by the entity, and which must be recognized as losses, are the following:
a) Loans with real guarantee that have more than twenty-four months, and those without real guarantee that have more than twelve months without reporting principal recoveries and are not in judicial execution process; b) Credits that are in any of the following situations:
i. When there is a lack of executive document to initiate recovery through judicial means;
ii. When after twenty-four months of initiating judicial action, it has not been possible to attach assets;
iii. In cases where a first-instance judgment has been issued in favor of the debtor;
iv. When there is no evidence that the debtor has acknowledged their debt in the last five years; and
v. When the criteria established by the entity in its credit risk asset write-off policies from the Statement of Financial Position are met, which additionally must include the criteria indicated in the preceding roman numerals.

c) Receivables, when they are older than twelve (12) months or have not recorded movement in that period. Receivables subject to write-off under this framework are those derived from operations with third parties not related to the entity or with entities of the same financial group. The timeframes established in this section for the write-off of credit risk assets from the Statement of Financial Position are maximums; consequently, entities may reduce them.

ACCOUNTING APPLICATION OF THE WRITE-OFF OF CREDIT RISK ASSETS
Principal and interest balances of loans shall be written off from the Statement of Financial Position by applying them against the established estimated loss for impairment (safety reserve). Amounts for which no loss estimate has been established shall be written off by debiting the Estimated Loss for Impairment of Financial Assets accounts, on the write-off date. Receivables must be written off entirely against the results accounts, by debiting expenses and crediting the receivable account.
OFF-BALANCE SHEET ACCOUNT REGISTRATION
The amounts of credit risk assets that have been written off from the Statement of Financial Position plus their corresponding interest shall be controlled in the off-balance sheet accounts "Written-Off Assets", until their recovery is achieved or, failing that, maintained for the time established in their policies.

For any recovery of written-off assets, the corresponding accounting applications shall be made.

RECOVERIES OF CREDIT RISK ASSETS
Cash recoveries of credit risk assets that were written off from the Statement of Financial Position in previous or current periods due to impairment shall be recognized as Other Operations Income.
In-kind recoveries of credit risk assets that were written off from the Statement of Financial Position in previous or current periods due to impairment shall be recognized in accordance with what is established in Section IV entitled "Recognition, Measurement, and Presentation of Extraordinary Assets".

SECTION IV
RECOGNITION, MEASUREMENT, AND PRESENTATION OF EXTRAORDINARY ASSETS

OBJECTIVE
This Section aims to establish uniform practices for the recognition, measurement, and presentation of extraordinary assets.
SCOPE
This Section applies to the recognition of extraordinary assets other than financial instruments.
RECOGNITION
Extraordinary assets shall be recognized when the entity acquires ownership rights over movable and immovable property, when such acquisition is carried out in any of the cases indicated in the laws applicable to them and will be evidenced by the relevant legal documentation.
INITIAL MEASUREMENT
On the date of foreclosure, judicial award, purchase, or receipt of assets that have been under financial leases, the asset shall be recognized as follows:
a) In cases of acquisition by foreclosure, the acquisition value shall be that decided by the contracting parties, which must be established in the corresponding notarial instrument. The value thus determined is the one that shall be recorded in the ASSETS RECEIVED IN PAYMENT OR AWARDED item, and the corresponding obligations owed by the debtor shall be credited. When the value recorded in the ASSETS RECEIVED IN PAYMENT OR AWARDED item is greater than the balances that were owed by the debtor, the difference shall be applied in the OTHER OPERATIONS COSTS item, ACCOUNT: OTHER COSTS. This accounting entry shall be made on the same date the acquisition value is recorded. (2) The balances owed by the debtor shall be determined taking into account the reference date of the foreclosure deed. If after the aforementioned accounting application, the book value of the asset is greater than its fair value, it must be adjusted to this latter value, and the resulting difference shall be recorded in the OTHER OPERATIONS COSTS item, Account: OTHER COSTS. This accounting entry shall be made on the same date the acquisition value is recorded. (2) Taxes, duties, and professional fees necessary to acquire ownership of the goods shall be added to the value of the asset, after the aforementioned accounting applications. The acceptance agreement of the foreclosure must refer to all balances owed by the debtor, including interest registered in off-balance sheet accounts. b) In cases of judicial award, the value of the extraordinary asset shall be the total debt registered in asset accounts, understood as the sum of the principal balance, interest registered in asset accounts, legal costs, plus taxes, duties, and professional fees necessary to acquire ownership of the goods. The value thus determined is the one that shall be recorded in the ASSETS RECEIVED IN PAYMENT OR AWARDED item, separating in a sub-account the award value and in another the remaining balance owed by the debtor; and the corresponding obligations owed by the debtor shall be credited. The acquisition value shall be determined taking into account the date of the judicial award issued by the competent judge. Interest that remains registered in off-balance sheet accounts shall not be counted as part of the value of the asset. When the value determined according to the first paragraph of subsection b) of this paragraph is greater than the fair value, the difference shall be applied in the OTHER OPERATIONS COSTS item, Account: OTHER COSTS. This accounting entry shall be made on the same date the acquisition value is recorded. (2) (3) c) In cases of sale and purchase, when the entity, to enforce credits in its favor or to secure its rights as a creditor, purchases movable and immovable property of any kind, the acquisition value shall be determined by the sum of the value paid to the seller, plus taxes, duties, and notarial expenses to acquire ownership of the goods. The value thus determined is the one
that shall be recorded in the ASSETS RECEIVED IN PAYMENT OR AWARDED item. When the fair value results in being less than the value paid for the acquisition, the asset shall be accounted for at the fair value; the resulting difference shall be

recorded in the OTHER OPERATIONS COSTS item, Account: OTHER COSTS. This accounting entry shall be made on the same date the acquisition value is recorded. (2) d) For cancellation of financial lease contracts, in case the financial lessee does not exercise the purchase option or breaches the corresponding contract, the entity shall recognize as extraordinary assets the goods that have been granted under Financial Lease, at the moment they are received by it, which must be documented with the sales deed of the asset (for real estate) or invoice or fiscal credit (for movable goods), the financial lease contract, and the cancellation of this contract. The initial recognition as an extraordinary asset originates from the credit impairment of the Financial Lease contract and the balance owed by the financial lessee shall be credited. When the fair value of the asset acquired by cancellation of financial lease results in being greater than the pending balance owed by the financial lessee, the resulting difference shall be recorded in the OTHER OPERATIONS INCOME item, Account OTHER INCOME. When the pending payment balance owed by the financial lessee results in being greater than the fair value of the asset, the difference shall be applied in the OTHER OPERATIONS COSTS item, Account: OTHER COSTS. This accounting entry shall be made on the same date the balance owed by the lessee is settled. (2) In the different cases of acquisition of extraordinary assets, when a value less than the fair value results, no gain shall be recorded for the acquisition.

CONSTITUTION OF RESERVES FOR HOLDING EXTRAORDINARY ASSETS
The entity must constitute a reserve for holding these assets for an amount equal to their value. The constitution shall be carried out in accordance with the timeframes established in the corresponding legal frameworks. The initial and subsequent constitution of reserves shall affect Equity accounts, with a debit to "Results to Apply – Results of Previous Years" and a credit to "Undistributable Profits - Reserves for Extraordinary Assets". Reserves must be constituted with the gradualness established by the corresponding legal frameworks.

In the case of transfer of reserves, the gradualness referred to in the previous paragraph shall be applied to complete the one hundred percent reserve in the corresponding period.
Reserves that financial institutions have constituted as a result of loans granted that have originated extraordinary assets cannot be reversed, but must be transferred as reserves for these assets.
In no case shall the transferred reserve exceed the value of the extraordinary asset; if this is the case, the difference shall be recognized as release of provisions.

MAINTENANCE EXPENSES
The entity shall not include in the book value of extraordinary assets items comprising expenditures that represent minor repairs and maintenance to keep the asset in acceptable condition for any potential client who shows interest in purchasing them. Such expenditures shall affect the results of the period in which they are incurred.
IMPAIRMENT LOSS OF EXTRAORDINARY ASSETS
When the entity becomes aware of the destruction of a good, it must constitute a provision equal to fifty percent of its value, if the good is insured; otherwise, the total loss must be recognized immediately. (3) Once the insurance is recovered, the entity must eliminate the provision and if such recovery is of a value less than the book value, it must recognize the corresponding loss; otherwise, the gain. (3) Extraordinary assets shall be written off when they are sold, transferred to fixed assets, suffer total loss due to impairment, or for any other valid cause of expropriation for these assets.
SALE OF EXTRAORDINARY ASSETS
The removal of an extraordinary asset due to sale will cause an increase in cash or credit portfolio, as appropriate, and a decrease in the ASSETS RECEIVED IN PAYMENT OR AWARDED account, by the corresponding book value. If the sale is in cash, the difference resulting from comparing the cash amount received with the book value of the asset to be written off will originate a gain or loss that will be recognized in the period's results.

On the date of sale, if the transaction is carried out with financing by the same entity, in the case of a gain, it shall be recognized in the period's results as "Other Operations Income - Gain on Sale of Assets - Assets Received in Payment", simultaneously, the entity shall apply an appropriation of profits by debiting results to apply with credit to "Undistributable Profits - Accrued Income Not Received". The profit appropriation arising from the gain on sale with financing shall be released in proportion to the recovery of the capital financed by the entity. Reserves constituted on the sold assets shall be released on that date; therefore, in the case where the extraordinary asset had a provision constituted, it must be settled as income from reserve release, in the OTHER INCOMES – Reversal of Constituted Provisions account, charged to the corresponding account.

ACQUISITION BY THE ENTITY
When the entity transfers an extraordinary asset to fixed assets, prior authorization of the Superintendence based on what is established in the corresponding legal frameworks, it shall be recorded in the corresponding properties and equipment account at book value. The reserve that has been constituted shall be released as established in the last paragraph of the previous paragraph.
PRESENTATION
Entities must maintain auxiliary records duly updated according to the following model:

ENTITY: __________________________________________ Balances in thousands of United States dollars

Date
(1)
Description of the
Transaction
(2)
Approval
(3)
Location or
Address
(4)
Acquisition
Reserve
Constituted
(7)
Auction
(8)
Commercialization
Management
(9)
Write-off
Form
(5)
Value
(6)
Cause
(10)
Price
(11)

Instructions
(1) Transaction date
(2) Description of the transaction, identifying the references of the former debtor (3) Number and date of the agreement or Committee resolution that approved the acquisition, sale, retention, or withdrawal by destruction (4) Sufficient data to locate it (5) Purchase, foreclosure, adjudication, or cancellation of a Financial Leasing contract (6) Acquisition value plus additions (7) The reserve is recorded in account 321003 (8) Date and base price of the last auction (9) Actions taken to sell it (10) State the reason for withdrawal, which may be sale, retention, or destruction (11) Price of the sale of the extraordinary asset

SECTION V
RECOGNITION OF COMMISSIONS ON LOANS AND CONTINGENT OPERATIONS

OBJECTIVE
This Section aims to regulate the recognition of commissions that entities charge customers in advance for the granting of loans, guarantees, sureties, guarantees, and financial services, regardless of the name by which they are designated.
SCOPE
This Section applies to all active financial operations related to credit risk assets, which imply the accrual of commissions for the entity.

Commissions for services provided that, although related to an active operation, are autonomous from said operation, such as appraisals of assets to be received as collateral and others with similar characteristics, as well as those derived from installment operations of up to thirty days, are not within the scope of this Section. (1)

RECOGNITION
Commissions derived from loan or contingent operations with a term of up to thirty days shall be recognized as income in the corresponding income statement account, on the date they are collected or accrued.

Entities must record in the respective liability accounts all those provisions or cash collections made in the concept of commissions for the granting or other income different from interest, related to loans, net of direct costs for granting the same. For the collection of these commissions, entities must observe compliance with what is established in the Consumer Protection Law and its respective regulation. (1)

The recognition of income from commissions shall be made periodically according to the originally established payment method, using the effective interest method, which consists of determining the effective interest rate or the Internal Rate of Return (IRR), using as a negative flow the amount granted of the loan minus the granting commissions, net of their direct costs for granting, and as positive flows, the same installment calculated under the nominal interest rate, in both cases excluding additional periodic commissions. The value of the commission to be recognized periodically will be the difference between the interest to be paid under the effective interest rate (IRR) and the interest to be paid under the nominal interest rate.

For the recognition of income from these loan commissions, the affected liability accounts will be debited and the respective income accounts credited.

Entities must account with credit to the respective liability accounts, all those provisions or cash collections made in the concept of commissions for the granting of guarantees, sureties, guarantees, and other services, net of the direct costs for granting these. Whenever these are commissions originating from legally authorized operations.

The amortization of provisions will be made monthly, during the term stipulated for the contingent operation with credit to the corresponding income account.

When loans are reclassified to past-due portfolio, the commission charged in the concept of granting may continue to be amortized, recognized as income until the completion of the term of these.

When loans are recognized as losses and withdrawn from the asset accounts in accordance with Section III “WITHDRAWAL OF CREDIT RISK ASSETS AND SUBSEQUENT RECOVERIES”, the commissions charged for granting may be recognized as income.

Deferred commissions from those credits that are canceled before the agreed maturity date will also be recognized as income.

SECTION VI
CONSTITUTION OF RESERVES FOR COUNTRY RISK

OBJECTIVE
This Section aims to establish the criteria for the establishment of policies and procedures for the identification, review, and control of country risk in the activities of placing resources abroad; as well as to establish the calculation bases and the timing of the constitution of accounting reserves to represent the referred risk.
SCOPE
This Section applies to the entity's assets or rights in which the resources granted or committed are used abroad or where the source of payment is located outside of El Salvador.

Reserves for country risk are exempted from:
a) Deposits constituted to comply with the Liquidity Reserve; b) Placements on behalf of third parties that do not result in commitments for the entity; c) Equity investments and resource placements regulated in articles 23 and 144 of the Banks Law; d) Operations that have been guaranteed with money in the same creditor entity, except for the portion of the risk not covered; e) The portion of operations guaranteed by a joint debtor domiciled in the country of the creditor entity; and f) Securities and any other type of investment in instruments issued by Institutions with the quality of Supranationals or International Organizations according to their constitutive agreement; as well as deposits made in said Institutions.

TERMS
For the purposes of this Section, the terms indicated below have the following meaning:
a) “Country Risk”: the risk assumed by maintaining or committing resources in a foreign country, due to potential impediments to obtaining their recovery resulting from adverse effects in the economic, social, political environment, or by natural disasters that occur in the country where the source generating the counterparty's fund flows is located. Country risk comprises sovereign risk, political risk, and transfer risk. b) Sovereign Risk: is represented by the difficulties an entity might face to carry out recovery actions against the debtor, for reasons of sovereignty. c) Political Risk: comprises all those human acts that put difficulty in fulfilling obligations by debtors of a country, for example: wars, civil unrest, terrorism, drug trafficking, legal provisions, and other similar events. d) Transfer Risk: is the situation that prevents debtors of a country from fulfilling obligations due to the scarcity of the currency in which the obligation is denominated or that can be accepted by the creditor.
ATTRIBUTION OF COUNTRY RISK
Country risk is attributable to the country in which the debtor or obligor is domiciled and from which the return of invested resources must be obtained. Nevertheless, the risk of a country different from that of the debtor may be used in the following cases:
a) The country risk of the parent company will be considered in the case of branches and subsidiaries, when the first of the aforementioned has the quality of joint debtor; and b) The country risk of the guarantor will be considered, when the latter has an investment grade classification from one of the internationally recognized risk rating agencies.
POLICIES AND CRITERIA FOR COUNTRY RISK
It corresponds to the highest administrative body of the entity to establish:
a) Policies regarding the use of resources in foreign assets, setting adequate diversification and imposing credit and investment limits by country; as well as policies related to the monitoring and control of country risk; b) An administrative unit responsible for the control and monitoring of country risk, formed by qualified personnel; c) Periodic evaluations, at least monthly, of country risk reserves, according to the methodology mentioned in this Section; and d) Reports that reveal and ensure that the country risk reserve is determined by a proper technical evaluation and that there is permanent monitoring of its coverage.

The guidelines and agreements of the highest administrative body on this matter must be duly expressed in the respective minutes book.

INFORMATION ON COUNTRY RISK
Every obligated entity must keep available to the internal audit unit, external audit, and Superintendence, information related to the country risk evaluation, in accordance with the policies of the previous subsection. For this purpose, it must keep the following information updated:
a) File of each country where the entity maintains placements in assets or commitments; b) Report containing relevant aspects and conclusions that determine the risk category of the country under evaluation; c) Organization manuals of the unit in charge of country risk and procedure manuals as applicable; d) The updated report for each country issued by internationally recognized risk rating agencies; and e) Any other information necessary to evidence the country risk classification.
EVALUATION OF COUNTRY RISK
Entities that place or commit their resources in other countries will use, to determine the degree of country risk, the sovereign risk classifications of countries issued by internationally recognized risk rating agencies, for long-term obligations.

Below, the country risk categories, the equivalences between the nomenclature of long-term obligations used by internationally recognized risk rating agencies, and the minimum reserve percentages that must be constituted for each category are established:

Categories | Standard & Poor | FITCH | MOODY'S | % Reserve --- | --- | --- | --- | ---

Countries with low risk | AAA | AAA | Aaa | 0%
| AA (+ -) | AA (+ -) | AA (+ -) |
| --- | --- | --- |
| Aa (1,2,3) | Aa (1,2,3) | Aa (1,2,3) |
Countries with normal risk | A (+ -) | A (+ -) | A (1, 2, 3) | 0%
Countries with moderate risk | BBB (+ -) | BBB (+ -) | Baa (1, 2, 3) | 1%
| BB (+ -) | BB (+ -) | Ba (1, 2, 3) | 10% |
| --- | --- | --- | --- |
| B+ | B+ | B1 | 20% |
Countries with difficulties | B | B | B2 | 30%
| B - | B - | B 3 | 40% |
| --- | --- | --- | --- |
| CCC+ | CCC+ | Caa1 | 50% |
Countries with doubts | CCC | CCC | Caa2 | 60%
| CCC - | CCC - | Caa 3 | 70%
Countries with serious problems or unclassified. | CC | CC | Ca (2) | 100%
| C | C | C | 100% |
| --- | --- | --- | --- |
| D | D | D | 100% |

The qualifications considered to determine the country risk category must be the latest issued by the risk rating agencies.

USE OF INTERNAL MODELS
Entities may use internal measurement models to assign the risk classification of the countries where they operate; the resulting reserves cannot be lower than those established based on the previous subsection; the methodology must contain the following six categories:
a) Category 1: Countries with low risk
Countries with the lowest expectation of credit risk are located in this category. It is assigned only in case of punctual payment capacity, exceptionally strong for external financial commitments. This capacity is very unlikely to be affected by foreseeable events.

b) Category 2: Countries with normal risk.
Countries showing a low expectation of credit risk are located in this category. It is assigned to cases of strong punctual payment capacity for external financial commitments. This capacity is somewhat more susceptible to adverse conditions and situations than in the case of the immediately superior classification.

c) Category 3: Countries with moderate risk
Countries showing a low expectation of credit risk are located in this category. It is assigned to cases of adequate punctual payment capacity for external financial commitments. This capacity is susceptible to deterioration under adverse conditions and situations.

d) Category 4: Countries with difficulties
Countries showing a possibility of development or significant credit risk are located in this category. It is assigned to cases of moderate or insufficient payment capacity for external financial commitments. This capacity is contingent and sustained by the conditions of the economic environment.

e) Category 5: Countries with doubts
Countries in which the development of credit risk is very probable are located in this category. It is assigned to cases where the default capacity is real and payment depends on the conditions of the economic environment.

f) Category 6: Countries with serious problems Countries that have defaulted on some or all of their obligations and the credit risk has materialized are located in this category. This capacity is totally dependent on the conditions of the economic environment.

MINIMUM ELEMENTS OF INTERNAL COUNTRY RISK EVALUATION MODELS
Internal models will include two analyses, the base analysis and the complementary analysis, in which they must consider the following elements to evaluate and classify country risk:

9.1 Base Analysis:
a) Analysis of the country's macroeconomic behavior regarding the existence or not of significant imbalances, for which the structure and economic performance, economic growth prospects, degree of fiscal flexibility, monetary stability, financial sector situation, macroeconomic policy, trade policy, direct investment policy, external liquidity, external debt, labor market, and dynamism of the private sector must be analyzed; b) Analyze the country's financial commitments regarding whether it complies or not:
i. With the payment of international financial obligations, and
ii. The payment of external debt service;
c) Consider whether the country has financing for foreign trade activities; and d) Any other that is considered convenient to include and that has not been considered in the previous points.

9.2 Complementary Analysis
It will consider all other aspects that are of interest to examine the situation of each evaluated country, among them:
a) Timeliness, reliability, and sufficiency of available economic and financial information; b) Political and social stability; c) Compliance with regulations; d) Conflicts with other countries; e) Natural disaster; and f) Any other that is considered convenient to include and that has not been considered in the previous points.

Countries classified must be downgraded at least to the immediately inferior category resulting from the base analysis, when there are weaknesses or important disturbing factors derived from the complementary analysis.

MOMENT WHEN COUNTRIES MUST BE CLASSIFIED
Countries must be classified before the placement of resources is approved, and the country risk reserve must be constituted when the asset account has a balance under it, for which it must be assigned one of the categories indicated in numeral 7 of this Section.

In the case that there is more than one classification, the one representing the highest level of risk will be considered. In the case that there are two equal classifications, the one that repeats the most will be considered. (4)

If a country lacks a sovereign risk classification, it will be classified in category 6 referring to countries with serious problems, with a reserve requirement of 100%.

When documenting country risk, the entity may change the classification and make the respective adjustments.

CALCULATION OF RESERVES BY RISK CATEGORIES
Reserves for country risk classifications are independent of any other credit risk or banking risk reserve; therefore, they must be constituted on the uncovered risk, for which the gross value of the corresponding asset according to accounting records must be considered, minus the balances backed by guarantees mentioned in the second subsection of this Section; in no case can the total sum of the reserves be greater than the gross value of the affected asset.
VOLUNTARY RESERVES
Entities obligated to comply with this Section may voluntarily constitute additional country risk reserves, with no other limitations than their own will.
ACCOUNTING APPLICATIONS FOR THE CONSTITUTION OF RESERVES
The accounting of increases and release of the country risk reserve will be made at least once a month, as follows:
a) Increases will cause a debit in the income statement account to apply – prior years' results and a credit in the restricted equity account – undistributable profits; and b) Decreases will cause a debit in the restricted equity account – undistributable profits and a credit in the income statement account to apply – prior years' results.

Increases or decreases will occur due to changes in risk categories, due to increases or decreases in the balances of the instruments subject to reserves, or due to corrections determined by the Superintendence or by external auditors.

COVERAGE AND FREQUENCIES OF EVALUATIONS
One hundred percent of placements in deposits, investments, loans, contingent operations, and any other balances representing country risk, must have its corresponding risk classification, for which entities must keep perfectly identified all operations that require reservation according to this Section and must associate each of them with the country to which the risk is attributed and with the other reserves constituted.

Entities obligated to comply with this Section must keep evaluated at all times their assets that are subject to country risk; in the case that they have technological or operational limitations to comply with the foregoing, they must communicate this to the Superintendence and request permission to update once a month while the same limitations are overcome.

SUMMARY OF ASSETS WITH COUNTRY RISK
Obligated entities must prepare at least monthly and have available to the Superintendence, the “Summary of Country Risk Assets” and the determination of adjustments to the reserve due to changes in asset balances or country classifications, according to the following model:

ENTITY:__________________________________________ SUMMARY OF COUNTRY RISK ASSETS, AT _____________ (Balances in thousands of United States Dollars)

A. Country Information | Country “X” | Country “Y” | Country “Z” | Observations --- | --- | --- | --- | --- A.1 Classification | | | | A.2 Risk Rating Agency | | | | A.3 Date of classification | | | | A.4 Source | | | |

B. Balance Sheet Account Balances | Country “X” | Country “Y” | Country “Z” | Total | Observations --- | --- | --- | --- | --- | --- B.1 Entity empty item by item, all assets identified in the balance sheet and contingent items that imply resources granted or committed to be used abroad or where the source of payment is located outside of El Salvador. | | | | | B.2 Sub-Total | | | | | B.3 Excluded balances, according to numeral 2 of this Section. | | | | | B.4 Total affected assets (B.2 - B.3) | | | | |

C. Determination of Reserve	Country “X”	Country “Y”	Country “Z”	Total	Observations
C.1 Required reserve percentage
C.2 Country risk reserve (B.4 X C.1)					C.3 Balance from previous month

Notes: The country columns are established according to the needs of each entity A.3: The most recent classification must be considered, in any case, the date of issuance of the classification must not have a delay greater than six months A.4: The source refers to the evidence supporting the qualification, for example: website, magazine published by the Rating Agency, copy of the rating document, etc. B.3: These balances must be fully identified and duly justified C.1: The percentage of the required reserve is in accordance with the table detailed in subsection seven of the Section.

Name and signature of the responsible executive: _______________

SECTION VII
SPECIFIC TREATMENTS DEFINED FOR PRESENTATION OF FINANCIAL STATEMENTS

OBJECTIVE
This Section aims to establish the method of presentation of financial statements.
SCOPE
The methods that must be applied for the presentation of the Statement of Financial Position, the Statement of Comprehensive Income, and the Statement of Cash Flows.
PRESENTATION OF ELEMENTS OF FINANCIAL STATEMENTS AND ACTIVITIES THAT INTEGRATE THE STATEMENT OF CASH FLOWS

Presentation refers to the way accounting information is incorporated into the basic financial statements in such a manner that such incorporation is uniform period after period, reliable, and relevant for a better reading and interpretation of the different elements of the financial statements. Below, the models or methods defined for the presentation of the elements of the financial statements are detailed.

Financial Statement	Presentation Method	Reasoning
Statement of Financial Position	Assets and liabilities will be presented in the Statement of Financial Position according to their degree of liquidity.	This presentation method takes into consideration the ease of conversion into cash of assets and the exigibility of payment of liabilities. The use of this method is considered appropriate for financial institutions because information on expected dates of realization of assets and exigibility of liabilities is useful to evaluate the liquidity and solvency of entities and is estimated to provide reliable and more relevant information than the current-non-current presentation, because the entity does not supply goods or provide services within a clearly identifiable operating cycle. The adoption of this method does not exempt entities from disclosing the amounts expected to be recovered or settled within a period less than or equal to one year after the date of the reported period and those that will be recovered in a period greater than one year after the date of the reported period.
Statement of Comprehensive Income and Other Comprehensive Income	Expenses will be accounted for applying the Method of Nature of Expenses and disclosing additional items that are considered necessary for the adequate understanding of the financial performance of the entity.	Taking into consideration the nature of financial entities, the presentation method of expenses by nature is considered to provide a reliable and more relevant presentation as it provides useful information on expenses that are materially representative of the entities, while it may be easier to apply; it is complemented with a detail of expenses that contribute to a better understanding of the financial performance of the entity.
Cash Flows	Indirect Method (1)	Of the methods permitted by IFRS for the preparation of the Statement of Cash Flows, the indirect method will be used. (1)

SECTION VIII
PREPARATION AND PUBLICATION OF FINANCIAL STATEMENTS: PRESENTATION AND DISCLOSURE

OBJECTIVE
This Section aims to establish regulations and procedures that allow the preparation, presentation, and disclosure of basic financial statements in accordance with prudential requirements issued by the Standards Committee of the Central Reserve Bank and IFRS, in order to provide users of financial statements with sufficient and timely financial information on the financial, economic, and legal situation of the entities.
SCOPE
This Section establishes the financial statement models and the minimum requirements regarding their content, which entities must use to present their financial information, as well as the minimum note framework that entities must observe when making disclosures of relevant information for each line of the Statement of Financial Position, Statement of Comprehensive Income, and the other basic financial statements as applicable. (3)
REQUIREMENT AND CONTENT OF FINANCIAL STATEMENTS
The most relevant aspects that must be considered in the presentation and disclosure of financial statements are:
a) Technical standards, fundamental assumptions, and qualitative characteristics: Financial statements must be prepared based on accounting standards issued by the Standards Committee of the Central Reserve Bank and International Financial Reporting Standards (IFRS), insofar as applicable. b) Expression of figures: Figures in the financial statements and their notes must be expressed in thousands of dollars with one decimal place; c) Accounting origin of balances: Figures in the financial statements and their notes must originate from ledger balances as of the corresponding reference date, which must contain definitive figures; d) Amounts to be disclosed in financial statements: The amounts presented in the financial statements prepared by management will be those that meet the condition of an asset, liability, equity, income, or expense; and e) Accounts with nature contrary to the main account where they underlie: When it is necessary to disclose valuation and adjustment accounts that have a nature different from the accounts where they underlie, for example: impairment loss estimates, accumulated depreciation, deferred taxes that net against the accounts that generate them within equity, etc., these must be presented in parentheses.
BASIC FINANCIAL STATEMENTS
The basic financial statements that must be prepared with reference to December 31 are: The Statement of Financial Position, the Statement of Comprehensive Income, the Statement of Changes in Equity, the Statement of Cash Flows, according to models in Annexes Nos. 1, 2, 3, and 4, and their respective notes including a summary of the most significant accounting policies and estimates and other explanatory information. Additionally, a Statement of Financial Position at the beginning of the first comparative period must be prepared when an entity applies an accounting policy retrospectively or performs a retrospective restatement of items in its financial statements, or when it reclassifies items in its financial statements. Financial statements must be presented in comparative form for the same previous period.

Notes present information about the bases for the preparation of financial statements and about accounting policies, provide narrative descriptions, and are an integral part of them; they contain additional information in detail that complements the balances reflected in the financial statements. Regarding the preparation of financial statements and their notes, in no case should a note be omitted; in the case of no event, transaction, or balance existing, such situation must be expressed; however, for the purposes of publishing financial statements, notes to the financial statements must be published in cases where the event, transaction, or balance exists. (3)

ADDITIONAL NOTES
The Management of the entity may incorporate additional notes it deems appropriate. Likewise, it must incorporate the notes necessary to disclose matters required by IFRS, as applicable; for this purpose, notes must be interspersed where they correspond. (3) The regulation in the preceding paragraph is also applicable to Consolidated Financial Statements. (3)
RESPONSIBLE FOR PREPARING FINANCIAL STATEMENTS
The preparation of basic financial statements is the responsibility of the entity's management. Financial statements must be signed by the members of the entity's board of directors, the general manager, or whoever holds an equivalent position.
SUBMISSION OF FINANCIAL STATEMENTS
Financial statements to be published referring to March 31, June 30, and September 30, their notes, and the corresponding interim report of the external auditor as of June 30, must be submitted to the Superintendence by the entity's management, no later than five business days before publication. Along with the aforementioned financial statements, the certification of the agenda item of the entity's board of directors meeting session, where the publication and content thereof were agreed upon, must be submitted. The regulation in this paragraph does not apply to the Holding Company. (1) (3)

Financial statements for the month of December, their notes, and the corresponding external auditor's opinion must be submitted to the Superintendence by the entity's management or equivalent administrative body, no later than five business days before the holding of the entity's general shareholders' meeting. Along with the aforementioned financial statements, the certification of the agenda item of the entity's board of directors meeting session, where the publication and content thereof were agreed upon, must be submitted, as well as a report containing the draft distribution of profits for the exercise, agreed upon by the board of directors or competent administrative body; the foregoing applies to entities that, according to their bylaws or creation law, establish the distribution of profits. In case of modification of the profit distribution agreement, it must be submitted five days before the holding of the general shareholders' meeting.

DISCLOSURE OF FINANCIAL STATEMENTS
Financial statements delivered to shareholders, those published in the annual report, and in general any disclosure of these, must include all basic financial statements, their notes in full, and the external auditor's opinion. Once the annual financial statements are approved by the general shareholders' meeting, they must be published once, within the first sixty calendar days of each year, in national circulation print media or another digital publication platform with greater or equal coverage, or on their website, in accordance with what is established in the current legal framework. For the case of holding companies, the publication of annual consolidated financial statements must be carried out within thirty days following the publication of the bank's financial statements that integrate the conglomerate. (1) These statements are: the Statement of Financial Position, the Statement of Comprehensive Income, the Statement of Changes in Equity, and the Statement of Cash Flows, which must be accompanied by their notes and the external auditor's opinion, who must be registered in the Register of External Auditors of the Superintendence. Publications of financial statements referring to March 31, June 30, and September 30 must be carried out once at the latest in the month following the reference date in national circulation print media or another digital publication platform with greater or equal coverage, or on their website, in accordance with what is established in the current legal framework. These statements are the Statement of Financial Position and the Statement of Comprehensive Income, which must be accompanied by their notes, except for Notes regarding Legal Reserve, Distributable Profit, and Income Tax. In the case of Cooperative Banks, the financial statements that must be published are those that legally correspond to them. Financial statements corresponding to June 30 must be accompanied by the interim report of the external auditor.
NOTES TO BASIC FINANCIAL STATEMENTS
Notes to financial statements must be prepared based on legal, regulatory, and structural and disclosure requirements of IFRS applicable to each element of the financial statements, including the information detailed below:

Note 1. Entity Identification

The entity will describe as part of its identification the following information (that which corresponds according to the requirements made):
a) Name of the reporting entity; as well as changes relative to such information since the end of the previous reported period. b) Description of the nature of the financial statements (whether they are of an individual entity or a financial conglomerate). c) Closing date of the period on which information is reported or the period covered by the financial statements. d) Legal form of the entity, country of incorporation, address of its registered office (or principal domicile where it carries out its activities, if this is different from the registered office). e) Description of the nature of the entity's operations and main activities. f) Name of the direct holding entity and the ultimate holding entity of the financial conglomerate. g) Duration of the entity's life if it is of limited life. h) Explanation of the fact that the owners of the entity or others have the power to modify the financial statements after disclosure.

Note 2. Bases of Preparation

a) Declaration of compliance with International Financial Reporting Standards: The entity will make a declaration that these financial statements have been prepared based on the Technical Standards issued by the Standards Committee of the Central Bank and International Financial Reporting Standards (IFRS), the former prevailing when there is a conflict with the latter. When IFRS present different options to record the same event, they will indicate that the most conservative was adopted; b) Measurement bases: The entity will declare the measurement bases it has used to prepare its financial statements; c) Functional and presentation currency: The entity will declare the functional and presentation currency of the financial statements and the degree of rounding applied when presenting figures in said financial statements; d) Use of estimates and criteria: The entity will make a description of the estimates and accounting criteria used for the preparation of financial statements and that affect the application of accounting policies and the amounts of assets, liabilities, income, and expenses reported, as well as what each estimate and criterion applied consists of; and e) Changes in accounting policies:

i. The entity will describe (identify) the areas in which accounting policies have changed; and
ii. The entity will describe what the new accounting policy consists of or what it is based on and the reason for the change, as well as what the previous accounting policy was based on or consisted of.

Note 3. Significant Accounting Policies

The entity will make a summary (description) of the significant accounting policies applied. Accounting policies are defined as the specific principles, bases, agreements, rules, and procedures adopted by the entity in the preparation and presentation of its financial statements.

In addition to the policies that the entity describes autonomously, it must add the following accounting policies:
a) Suspension of interest recognition in income.
The entity must describe the policy it applies to proceed with the suspension of the recognition of interest income. b) Estimation of impairment loss on credit risk assets.
The entity will describe the policy for establishing estimates of impairment loss on the portfolio of credit risk assets defined based on the technical standards issued by the regulatory body for such purposes. c) Reclassification of credit risk assets from performing to non-performing. The entity will disclose the accounting policy it applies for the reclassification of credit risk assets from performing to non-performing. d) Extraordinary assets The entity will disclose the accounting policy established for the initial and subsequent recognition of these assets, based on the legal framework or based on the technical standards established by the regulatory body. e) Derecognition of credit risk assets from the Statement of Financial Position. The entity will disclose the accounting policy established to derecognize credit risk assets from the Statement of Financial Position.

Note 4. Investment Financial Instruments

This item represents securities and other investments in financial instruments acquired for speculative purposes or by disposition of the respective authorities; its disclosure will be carried out in accordance with what is established in this accounting framework and what is established in IFRS.

Note 5. Loans, Contingencies, and Their Provisions

Gross Loan Portfolio US$
Gross Portfolio of Contingent Operations

Total Risk Portfolio US$
Less: Provisions US$

Net Risk Portfolio US$

The movement of provisions in the reported period is as follows:

	Loans	Contingencies	Total
Balances as of December 31, 2,00X	US$	US$	US$
Plus: Establishment of reserves
Less: Release of reserves	_________	__________	_________
Total	US$	US$	US$

The "Contingencies" cleanup reserves are presented in the "Various" liability item.
Coverage Rate ___%
The coverage rate is the quotient expressed as a percentage, resulting from dividing the amount of provisions by the amount of the asset.

Average Yield Rate ___%
The average yield rate is the percentage resulting from dividing the income of the loan portfolio (including interest and commissions) by the average balance of the gross loan portfolio for the reported period.

Loans with adjustable interest rates represent the % of the loan portfolio and loans with fixed interest rates the % Accrued interest on the loan portfolio and not recognized as results in the reported period amounts to US$___

Repealed (1)

Note 6. Pledged Portfolio

Resources have been obtained with the guarantee of the loan portfolio as described below:
a) Loans received from the Central Reserve Bank, for US$, which we have guaranteed with category _______ credits for an amount of US$________; as of the date, the loan balance plus interest is US$ ________ and the guarantee is US$. b) Loans received from the Development Bank of the Republic of El Salvador, for US$, which we have guaranteed with category _______ credits for an amount of US$________; as of the date, the loan balance plus interest is US$ ________ and the guarantee is US$. c) Issuance of investment certificates placed through the Stock Exchange, for US$, and accumulated interest of US$___ which we have guaranteed with category _______ credits for an amount of US$___; such issuance matures on __ of of ___. The aforementioned credits are recorded in registers that allow their full identification, in order to respond to our creditors for the legal responsibilities derived from the respective contracts.

Note 7. Assets and Liabilities for Deferred Taxes

Declaration and detail of tax obligations, provisions, and composition of income tax, withholdings, perceptions, and advance payments, deferred taxes, and temporary differences, etc. Its disclosure must be made attending to the requirements described in IFRS.

Note 8. Effects of Income Tax on Items Integrating Other Comprehensive Income

This disclosure must be made attending to the requirements described in IFRS.

Note 9. Extraordinary Assets
As of December 31, 2,0XX, the institution maintains balances for extraordinary assets valued at US$____________:
The movement of extraordinary assets, recorded during the reported period, is summarized below:

	Value of Assets	Value of Reserves
Balance as of December 31, 2,0XX	US$	US$
Plus: Acquisitions
By Loans
By Financial Leasing Contracts
Less: Withdrawals	___________	___________
Total	US$	US$

Assets that have been acquired for more than four years amount to US$ _______, of which an amount of US$ ______, has been recognized as a loss in the exercise that ended on ____and US$ _______, in the exercise that ended on ______, in accordance with what is established in article 72 of the Banks Law and article 47 of the Cooperative Banks and Savings and Credit Societies Law. (3) The entity will disclose the following information:
a) A general description of extraordinary assets at the end of the period; and b) Summary (table) of extraordinary assets that were derecognized during the current period by sales, transfer to property and equipment, by destruction, in which the selling price, acquisition cost, result obtained, and profit appropriations released upon derecognizing such assets are detailed.

Note 10. Physical and Intangible Assets

The movable and immovable property of the entity are detailed below:
Cost:
Buildings US$
Installations
Furniture and equipment
Remodeling and readjustments ___________
Less:
Accumulated Depreciation (__________)
Plus:
Land
Amortizable
Construction in progress ___________
Revaluations:

Buildings
Furniture and equipment ___________
Less:
Accumulated depreciation
From revaluations (__________)
Land ___________

Total ==========

During the current fiscal year, the following revaluations were carried out: (The revalued asset or assets, their acquisition value, the appraisal conducted, and the respective depreciation adjustment must be described). The movement of fixed assets in the reported fiscal year was as follows:
Balance as of December 31, 20X1 US$
Plus: Acquisitions
Revaluations
Less: Disposals
Depreciation __________
Balance as of December 31, 20X2 US$ ========

The entity's intangibles are detailed below:
Cost:
Franchises US$
Licenses
Concessions
Software programs
Websites
Others ___________
Less:
Accumulated amortization (__________)
Plus:
Acquisitions
Franchises US$
Licenses
Concessions

Note 11. Derivative financial instruments

In the event that the entity acquires derivative financial instruments, it must prepare this note, describing the information as required by International Financial Reporting Standards (IFRS).

Note 12. Management of financial and operational risks

This disclosure must be made in accordance with the requirements described in IFRS.
Note 13. Financial liabilities held for trading

This disclosure must be made in accordance with the requirements described in IFRS.
Note 14. Deposits
The entity will disclose the following information:
Distribution of the entity's deposit portfolio: (3) a) Public deposits US$ b) Deposits from other banks c) Deposits from state entities d) Restricted and inactive deposits ___________ Total US$

=========
The different classes of deposits of the entity are as follows: (3) a) Checking account deposits US$ b) Savings account deposits c) Time deposits ___________ Total US$

==========
Average cost of the deposit portfolio: _____%
The average cost rate of the deposit portfolio is the percentage resulting from dividing the item "Costs of financial liabilities" by the average balance of the deposit portfolio.

The entity will disclose the following information:
a) Amount in the Statement of Financial Position of the issuances made, detailed by amount and date of issuance, agreed terms, and balance of principal plus interest; b) Main terms and conditions under which the issuances have been made (for example, convertible obligations); (5) c) Other information required by IFRS and that the entity considers important and relevant for the better understanding of users of the financial information (for example: contractual rates, average effective interest cost incurred per issuance, guarantee granted, etc.); and (5) d) In the case of other own debt issuances, which are carried out through public issuance debt tokens, it must be disclosed in addition to the content of the aforementioned letters, the authorization date as a digital issuer, the token authorization number, maximum quantity of tokens to be issued, tokens in circulation, underlying asset, the guarantee backing the issuance, trading currency, as well as other relevant information for the investor. (5) Note 16. Trusts

The entity will disclose the financial and economic information in a condensed manner of each trust in which it acts as trustee. Such information must be provided in a comparative manner. Add any other information that it considers relevant for users of the financial statements. Note 17. Subordinated loans

The entity will disclose the following information:
a) The amounts of loans obtained by class, for example: from local financial entities, international financial entities, etc.; b) Interest rates at which the loans are contracted; c) Classification of the aforementioned loans into Current and Non-Current; d) Terms and conditions under which the loans have been received; and e) Other information that the entity considers important and relevant for the better understanding of users of the financial information. Note 18. Legal reserve The entity will describe the legal requirement established for the calculation of this reserve in the corresponding laws, the reserve constituted in the period being reported, the total amount it reaches, the percentage amount reached with respect to share capital, and any other information that management considers relevant for a better understanding of users of the financial statements.

Note 20. Equity instruments measured at fair value with changes in other comprehensive income This disclosure must be made in accordance with the requirements described in IFRS.

The entity will disclose the following information:
The amount of losses (gains) from impairment (from reversal of impairment) for each class of credit risk asset, evidencing:
a) Increases in impairment, b) Amounts removed from the Statement of Financial Position in the period as a result of amounts considered uncollectible (loan or other credit risk asset for which no restructuring reserves or loss estimates had been constituted); c) Recoveries on loans prior to their removal from the Statement of Financial Position d) Reversals of impairment and others that contribute to establishing the total amount of impairment charges during the period.

Note 23. Transferred financial assets that do not meet the conditions for derecognition in full

This disclosure must be made in accordance with the requirements described in IFRS.

Note 25. Pending litigation
In the event of pending judicial and administrative litigation, of significant materiality, whether in favor of or against any of the consolidated entities, as well as the entity itself, they must be mentioned and their effect quantified, as required by International Financial Reporting Standards (IFRS). Litigations are considered to be legal disputes in favor of or against the entity, brought before a judge to hear the case, as well as the proceedings that are being heard by the Superintendence against the entities it supervises.

Note 26. Expense (Income) from income tax
This disclosure must be made in accordance with the requirements described in IFRS.

Note 27. Related parties and relevant shareholders Entities whose legal framework establishes conditions and requirements regarding related parties and transactions will disclose the following additional information:
a) It will describe the requirements established in the legal framework for granting credit to related persons and whether the latter comply with the maximum financing limits permitted by said legal framework. Likewise, in the event that the aforementioned financings exceed the permitted maximums as of the date of the financial statements, it will describe the regularization plan established; b) It will describe the legal requirements established for granting credit to foreign subsidiaries and whether it has complied with the maximum financing limit permitted for such entities; c) It will describe the legal requirements established for granting credit to national subsidiaries and whether it has complied with the maximum financing limit permitted for such entities; d) Additionally, the entity will disclose the differences existing between the relevant legal framework and the disclosure framework required in this note regarding related parties; e) It will mention that during the reported period the entity complied with or failed to comply (indicating the number of times) with the provisions on related credits referred to above; and f) Other legal and IFRS information that is relevant for users of the Financial Statements.

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-11/2022
NCF-01
ACCOUNTING MANUAL FOR DEPOSIT-COLLECTING INSTITUTIONS AND HOLDING COMPANY Approval: 30/12/2022 Validity: 16/01/2023 Note 28. Limits in the granting of credits The corresponding entity will disclose the following information:
a) It will describe the legal requirements established in the applicable laws for the limit of individual financing or of a group of persons with economic links; b) A quantitative description of the compliance with the established legal limits, and c) It will describe whether it has complied with the legal requirements described in the aforementioned letter and in case of non-compliance with these, it will indicate the regularization plans established to correct the excesses. Note 29. Contracts with related parties In accordance with the legal framework applicable to financial entities, these must disclose the following:
a) It will describe the legal requirements established in the applicable laws for the objection to the celebration of contracts with related parties; b) A quantitative description of the amount of contracts celebrated, and c) It will describe whether it has complied with the legal requirements described in the aforementioned letter and in case of non-compliance with these, it will indicate the number and amount of contracts objected to by the supervisory entity. Note 30. Operating segments. The entity must prepare this note describing segment information, considering the business segment as primary, as required by IFRS. Note 31. Contingencies As of the reference date of the financial statements, the so-called contingent operations are the following:
a) Opening of letters of credit US$ b) Sureties, bonds, and guarantees c) Forward contracts _________ Less: Provision for risks US$_________ Total US$ ========

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-11/2022
NCF-01
ACCOUNTING MANUAL FOR DEPOSIT-COLLECTING INSTITUTIONS AND HOLDING COMPANY Approval: 30/12/2022 Validity: 16/01/2023 Note 32. Risk classification The entity will disclose the following information:
It will describe the legal requirements established related to obtaining a risk classification issued by a risk rating entity, indicating what the requirement consists of, the classification obtained, the reference date of the classification, as well as an explanation of what the obtained classification means and other information that the entity considers relevant for a better understanding of users of the financial statements. (3) Note 33. Scope of consolidation (Investments in subsidiary entities in consolidated financial statements) The entity must prepare this note as required by International Financial Reporting Standards. Note 34. Acquisitions (business combinations) and sales (disposal of subsidiaries). The entity must prepare this note as required by International Financial Reporting Standards. Note 35. Relationships between active and passive operations in foreign currency According to what is established in the applicable legal frameworks regarding active and passive operations in foreign currency and in order to ensure that exchange rate risk remains within reasonable ranges, it has been established that the absolute difference between foreign currency assets and liabilities cannot be greater than 20% of the equity fund. At ______ of _____________ of 200X, the entity complies with the cited provision by maintaining a ratio of _______% (or in its case: did not comply by maintaining a ratio of _________%). Note 36. Significant differences between International Financial Reporting Standards (IFRS) and Accounting Standards issued by the Standards Committee of the Central Reserve Bank The entity will disclose the following information:
Material and immaterial differences between International Financial Reporting Standards (IFRS) and Generally Accepted Accounting Principles issued by the Standards Committee of the Central Reserve Bank.

SECTION IX
FINANCIAL INVESTMENTS

OBJECTIVE

This Section aims to regulate the recognition of investments made in government securities, as well as those made in financial derivatives.
2. SCOPE

This Section applies to investment operations carried out in securities of State entities as well as for investments in financial derivatives.

RECOGNITION

3.1 State Investments

Securities issued or guaranteed by the Central Reserve Bank and by other State entities, payable with funds from the National Budget, must be considered without risk for the purposes of this Section; consequently, the book value must be equal to the initial registration value established in the following paragraph.

When financial entities acquire securities issued or guaranteed by the Central Reserve Bank of El Salvador or by other State entities, payable with funds from the National Budget, they must be accounted for at the acquisition cost net of brokerage fees, commissions, and other expenditures related to the purchase. Brokerage fees, commissions, and any expenditure identified with the purchase of said securities must be applied to the corresponding income statement account.

When financial entities contract financial derivatives, they must observe what is established in the guidelines issued by the Central Reserve Bank and request the corresponding authorization to carry out this type of operation. Likewise, the entity must enter into a negotiation of derivative financial instruments only if it fully understands how such instruments work; therefore, the entity must demonstrate that it has at least the internal capacity to value the intended instrument, observing at least the frequency of valuation, valuation methodology, formulas, parameters, and sources to be used; otherwise, it must not enter into negotiations of this type of instrument.

DESCRIPTION OF THE CODIFICATION METHOD
The chart of accounts contains the basic accounts required for the accounting recording of economic events that meet the conditions for their recognition or, failing that, originate contingent rights or obligations, enable the entity to make future claims, evidence ownership or justify the existence of certain rights or obligations, indicating the number and name of the element, the classification, the rubric, account, and subaccount. The chart includes the codes and accounts that by regulation must be reported periodically to the Superintendence; consequently, for its internal records, the entity may disaggregate within each subaccount the detail that best suits its needs. The chart of accounts is structured in elements identified with one digit, classifications identified with 2 digits, rubrics identified with 3 and 4 digits, accounts identified with 6 digits, and subaccounts identified with 10 digits, which include the type of currency as exemplified below:
Element 1 ASSETS
Classification 11 ASSETS
Rubric 111 LIQUIDITY
Rubric (characteristic) 1110 LIQUIDITY
Account 1110.01 Cash
Subaccount 1110.01.01.01 Head Office ML
Subaccount 1101.01.01.02 Head Office ME
Element 2 LIABILITIES
Classification 21 LIABILITIES
Rubric 210 FINANCIAL LIABILITIES AT FAIR VALUE THROUGH PROFIT OR LOSS (FVTPL) Rubric (characteristic) 2100 HELD FOR TRADING Account 2100.01 Held for trading other than derivatives Subaccount 2100.01.01.01 Debt instruments-ML Subaccount 2100.01.01.02 Debt instruments ME Element 3 EQUITY Classification 31 EQUITY Rubric 311 SHARE CAPITAL Rubric (characteristic) 3110 SUBSCRIBED SHARE CAPITAL Account 3110.01 Subscribed capital Subaccount 3110.01.01.01 Common shares Subaccount 3110.01.02.01 Preferred shares

The level corresponds to the position the account occupies within the account structure. To define the account catalog, a six-level structure has been established. The meaning of each of the levels is as follows:

Level	Meaning	Values
First	Account element in the Financial Statement	1. Assets; 2. Liability; 3. Equity; 4. Contingent Rights; 5. Contingent Commitments; 6. Income; 7. Costs; 8. Expenses; 9. Off-balance sheet accounts
Second	Account classification in the financial statement	11. Assets; 12. Other assets; 13. Physical and intangible assets; 14. Balances between companies
Third	Category	Collects a set of accounts associated with the previous level. (2); 111 Liquidity; 112 Operations with repurchase agreement; 113 Investment financial instruments; 114 Loans; 122 Goods received in payment or adjudicated; 123 Inventory; 124 Expenses paid in advance; 125 Accounts receivable; 126 Investments in shares, rights and participations
Fourth	Category (characteristic)	1110 Liquidity; 1121 Operations with repurchase agreement; 1130 At fair value with changes in profit or loss (FVPL); 1131 At fair value with changes in other comprehensive income (FVOCI); 1132 Financial derivatives for hedges; 1134 At amortized cost
Fifth	Account	Identifies the position of each account within each category.; Minimum value: 01; Maximum value: 99; 1110 01 Cash; 1110 02 Deposits at BCR; 1110 03 Documents subject to other banks
Sixth	Sub-account	Identifies the position of each sub-account within the accounts.; Minimum value: 01; Maximum value: 99; 1110.01.01 01 Main Office ML; 1110.01.02 01 Agencies ML; 1110.01.97 01 Other ML

The account catalog is presented in the Annex.

CHAPTER IV
ACCOUNTING APPLICATIONS MANUAL

SECTION I
ACCOUNTING APPLICATIONS MANUAL FOR ASSETS

Element 1 ASSETS
Classification 11 ASSETS
Category 111 LIQUIDITY
Category (characteristic) 1110 LIQUIDITY

The Liquidity category comprises monetary resources in cash, demand bank deposits, and restricted deposits.
Sub-accounts corresponding to transit remittances must not show a balance at the end of each month.

Account 1110 01 CASH
This account must represent assets that, due to their liquidity, are immediately available. This account must represent monetary resources in both national and foreign currency, available in the treasuries and cash registers of the main office and agencies, as well as petty cash and local transit remittances, for the development of business operations. It will be debited for the entry of cash, with credit to the accounts that serve as counterpart, according to the nature of the operation that generates the increase in cash. It will be credited for the exit of cash, with debit to the accounts that serve as counterpart, according to the nature of the operation that generates the decrease.

Account 1110 02 DEPOSITS AT THE BCR
All balances of demand accounts that the institution maintains at the Central Bank, in national and foreign currency, which are owned by the institution, are recorded in this account. Pending compensation checks must not be applied to them. Balances must be reconciled daily with the statements issued by the Central Bank, with no unbalanced items being admitted for more than thirty (30) days in those cases where they must be regularized by the institution.

Deposits at the Central Bank held as collateral for the electronic money provision activity are included in this account.
It will be debited for the establishment of deposits, with credit to the accounts that serve as counterpart, according to the nature of the operation that generates the increase.
It will be credited for the exit of Cash, with debit to the accounts that serve as counterpart, according to the nature of the operation that generates the decrease.

Account 1110 03 DOCUMENTS SUBJECT TO OTHER BANKS This account must represent the value of checks received from other banks, while they are in their collection process or Clearing House.
The sub-account "Pending Compensations" is debited for checks received for collection, an amount that must be credited to sub-account 2130 06 0000 "Clearing House". Credits to this account will be made with the result of the compensation. The account "Rejections due to Compensation" is debited with the result of the compensation and credited for the return of checks to their respective drawers.

Account 1110 04 DEPOSITS AT LOCAL BANKS
This account must represent the amounts of money deposited in domiciled banks. Bank overdrafts, when they occur, must be reclassified to the corresponding liability accounts.
It will be debited for the establishment of deposits, with credit to the accounts that serve as counterpart, according to the nature of the operation that generates the opening, as well as increases in them. It will be credited for the exit of Cash, with debit to the accounts that serve as counterpart, according to the nature of the operation that generates the expenditure.

Account 1110 05 DEPOSITS AT OTHER ENTITIES OF THE FINANCIAL SYSTEM The use of this account is exclusive for Cooperative Banks, Savings and Credit Societies, and Financial Federations regulated by the corresponding Law. (1) This account must represent the amounts of money deposited in other financial intermediaries, both in local and foreign currency.

Bank overdrafts, when they occur, must be reclassified to the corresponding liability accounts.
It will be debited for the establishment of deposits, with credit to the accounts that serve as counterpart, according to the nature of the operation that generates the establishment, as well as increases in them. It will be credited for the exit of Cash, with debit to the accounts that serve as counterpart, according to the nature of the operation that generates the expenditure.

Account 1110 06 DEPOSITS AT FOREIGN BANKS
This account must represent monetary deposits made in banks located outside the national territory.
Bank overdrafts, when they occur, must be reclassified to the corresponding liability accounts.
It will be debited for the establishment of deposits, with credit to the accounts that serve as counterpart, according to the nature of the operation that generates the collection.
It will be credited for the exit of Cash, with debit to the accounts that serve as counterpart, according to the nature of the operation that generates the payment.
The sub-account corresponding to transit remittances (amounts corresponding to values pending confirmation by the entities holding the remitted resources) is credited once the transactions are confirmed by the relevant entities with debit to the corresponding bank accounts abroad. This sub-account must only present remittances pending confirmation for a period not exceeding fifteen (15) calendar days. Sub-accounts 1110 06 0401 and 1110 06 0402 are for exclusive use by Cooperative Banks, Savings and Credit Societies, and Financial Federations regulated by the corresponding Law. (1)

Account 1110 07 RESTRICTED DEPOSITS
This account must represent deposits that, from their origin or during the validity of the account(s), have been restricted by contractual or implicit conditions that obligate the administration, for their compliance, to present them separately. It will be debited with the liquidity originating from its start as restricted and with reclassified ones, and it will be credited when the restrictive conditions disappear, returning them to their original condition, or when they have been used to comply with the conditions that originated their reclassification.

pertinent, returning them to their original condition, or when they have been used to comply with the conditions that originated their reclassification.

Account 1110 08 PAY-BCR (5)
This account must represent the balances that the Pay has, which, due to their liquidity, are immediately available. (5) It will be debited with the transfer of funds received from clients in the entity's financial institution PAY. (5) It will be credited for the transfer made by the financial institution to another PAY account or its accounts at the Central Bank. (5)

Category 112 OPERATIONS WITH REPURCHASE AGREEMENT Category (Characteristic) 1121 OPERATIONS WITH REPURCHASE AGREEMENT

In the accounts of this category, amounts corresponding to the disbursed value of repurchase operations performed (i.e., the financed amount) are recorded, when the entity acts as the repurchaser or financier, committing to the resale of the acquired title as collateral on the maturity date of the contract. They will initially be increased with the amount of the financed value. They will be decreased by crediting them on the date the operation that originated them is amortized. The accounts detail repurchase operations with the different entities that act as counterparties to these operations, i.e., the reported entities, and the sub-accounts detail the entities issuing the reported financial instruments, as well as interest and other receivables generated by these operations.

Account 1121 07 BURSARIL OPERATIONS
This account must represent the value of rights acquired through bursarial transactions commonly known as repurchases.

Category 113 INVESTMENT FINANCIAL INSTRUMENTS
In this category, all investments in securities that are owned by the entity are presented.

Category (Characteristic) 1130 AT FAIR VALUE WITH CHANGES IN PROFIT OR LOSS (FVPL) Financial instruments measured at fair value whose value changes are applied to profit or loss in accordance with the business model that management has established for the management of its portfolio are included in this category.

Account 1130 01 HELD FOR TRADING DEBT OTHER THAN DERIVATIVES This account must represent the value of instruments that are owned by the institution, which have the characteristic of being negotiable; that is, they can be freely transferred and, in addition, the institution has the intention to commercialize them. It will be debited for the amounts corresponding to the fair value of debt instruments acquired by the entity. Transaction costs incurred in these operations will be directly applied to profit or loss by debiting the corresponding expense account. The debits applied will be reconciled with the credits to the liquidity used or liabilities acquired to effect the transaction. The sub-accounts named "Adjustments for fair value fluctuation" identify adjustments for changes in fair value, up or down, of financial assets classified in these business models. The adjustments will be applied with debit or credit to the sub-accounts of the accounts: 6110 02 or 7110 05, as applicable.

Account 1130 02 HELD FOR TRADING DERIVATIVES
This account will be affected by financial derivative instruments acquired and that have not been designated as an effective hedge accounting instrument. The acquisition of these instruments must be coherent with the risk policies and financial asset classification established by the entity's management. The sub-accounts of this account will be debited with the fair value of derivatives that are contracted, when they take the position of an asset, with credit to the sub-account "6110 02 0200 Held for trading derivatives". The sub-accounts of this account will be credited with changes in fair value that imply a decrease in value, with debit to the sub-account "7110 05 0300 Held for trading financial derivatives". They will also be credited on the date of their liquidation or maturity, provided they have a debit balance.

Account 1130 03
DEBT DESIGNATED AT FAIR VALUE WITH CHANGES IN PROFIT OR LOSS It will be debited for financial instruments that are designated, irrevocably, in this category to eliminate or reduce inconsistencies in measurement or recognition (accounting asymmetry) that would arise, otherwise, from the measurement of assets or liabilities or the recognition of gains and losses of the same on different bases. It will be credited when the entity disposes of these financial instruments.

Category (characteristic) 1131 AT FAIR VALUE WITH CHANGES IN OTHER COMPREHENSIVE INCOME (FVOCI) This category includes financial assets managed by the entity within a business model whose objective is achieved by obtaining contractual cash flows and selling financial assets; likewise, the contractual conditions of these financial assets give rise at specific dates to cash flows that are solely payments of principal and interest on the outstanding principal amounts. In each of the accounts that make up this category, sub-accounts are included to present adjustments for fair value fluctuation and interest and other receivables generated by the financial instruments of this classification.

Account 1131 01 DEBT REPRESENTATIVE INSTRUMENTS The sub-accounts of this account will be initially debited with the fair value plus the transaction costs of the acquired debt financial assets.
It is credited when the financial assets are disposed of.

Category (characteristic) 1132 FINANCIAL DERIVATIVES FOR HEDGES This category will include financial instruments designated for the hedge of specifically identified risks, which have the probability of impacting the entity's results as a consequence of variations in the fair value or in the cash flow of one or more concrete elements, or in a net investment in foreign currency, denominated as hedged items. (2)

Account 1132 01 FAIR VALUE HEDGES

Fair value hedge covers the exposure to change in the fair value of a recognized asset or liability or a firm commitment to buy or sell an asset at a set price, or the exposure of a specific portion of such asset, liability, or firm commitment, which is attributable to a particular risk and could affect the entity's results. In fair value hedge, the gain or loss arising from remeasuring the hedging instrument to fair value (in the case of a derivative) or the foreign currency component of a recorded amount (in the case of a non-derivative) is recognized immediately in the statement of other comprehensive income. At the same time, the recorded amount of a hedged item is adjusted by the gain or loss attributable to the hedged risk, if applicable, and will be recognized in the period's profit or loss. Any adjustment made on the hedged items will be amortized through the period's profit or loss if the hedged item is a financial instrument (or a component of it) measured at amortized cost. Amortization will begin as soon as the hedged item ceases to be adjusted by hedge gains or losses or as soon as there is an adjustment to it. Amortization will be based on the effective interest rate, recalculated on the date amortization begins. In the case of a financial asset (or a component of it) that is a hedged item and that is measured at fair value with changes in other comprehensive income, amortization is applied in the same way, but to the amount representing the gain or loss previously recognized and applied in other comprehensive income, instead of the book value. However, when it concerns a fair value hedge of the exposure to interest rate risk of a portfolio of financial assets or financial liabilities (and only for this form of hedge), and amortization using a recalculated effective interest rate is impracticable, the adjustment will be amortized using a linear method. In any case, the adjustments will be fully amortized upon maturity of the financial instrument or, in the case of a portfolio hedged only by interest rate risk, upon expiration of the interest review period. This account will be debited for upward fluctuations in fair value with respect to the initial value or the previously measured value, crediting the income account "6110 02 Investment financial instruments". It will be credited for downward fluctuations in fair value with respect to the initial value or the previously measured value, debiting the cost account "7110 05 Financial liabilities at fair value with changes in profit or loss" in the corresponding sub-account.

It will be credited for the following reasons: discontinuation of hedge accounting when the hedge relationship (or a part of a hedge relationship) ceases to meet the required criteria (after taking into account any rebalancing of the hedge relationship, if applicable), this includes when the hedging instrument expires, is sold, resolved, or exercised, with debit to the corresponding accounts.

Account 1132 02 CASH FLOW HEDGES
Cash flow hedge covers the exposure to variation in cash flows that: i) Is attributable to a particular risk associated with a recognized asset or liability or with a forecasted transaction (future operation but not committed) and ii) Could affect the entity's results. The portion of the gain or loss, on the hedging instrument, determined as an effective hedge will be recognized directly in the equity account of other comprehensive income in the category (characteristic) "3231 Other Comprehensive Income of the current period", in the corresponding sub-account, while the ineffective portion will be recognized in profit or loss, either in the account "6110 02 Investment financial instruments", in the corresponding sub-account, or in the account "7110 05 Financial liabilities at fair value with changes in profit or loss", in the corresponding sub-account, in the applicable account. The accumulated amount in the cash flow reserve will be accounted for as follows:
a) If a covered forecasted transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, or a forecasted transaction covered for a non-financial asset or non-financial liability becomes a firm commitment for which fair value hedge accounting is applied, the entity will eliminate that amount from the cash flow hedge reserve and include it directly in the initial cost or other amount of the asset or liability. b) For cash flow hedges other than those covered by a), this amount will be reclassified from the cash flow hedge reserve to the period's profit or loss as a reclassification adjustment in the same period or periods during which the expected future covered cash flows affect the period's profit or loss (for example, in the periods when interest income or interest expense is recognized or when a planned sale occurs). c) If the hedge reserve is a loss and an entity expects that all or part of it will not be recovered in one or more future periods, the amount that is not expected to be recovered will be immediately reclassified to the period's profit or loss as a reclassification adjustment.

When an entity discontinues this hedge accounting, it will account for the amount that has been accumulated in the cash flow hedge reserve as follows:
a) If it is expected that the future covered cash flows will still occur, that amount will remain in the cash flow hedge reserve until the future cash flows occur or until literal c) of the previous paragraph is applied. When the future cash flows occur, the paragraph established in the previous paragraph will be applied. b) If it is no longer expected that the future covered cash flows will occur, that amount will be reclassified immediately from the cash flow hedge reserve to the period's result as a reclassification adjustment.

Increases in fair value with respect to the initial or previously measured amount will be debited, crediting the difference between the fair value and said previous measurement, in the following items:
“3231 Other comprehensive income of the current period”, in the corresponding account, for the effective portion, and “6110 02 Investment financial instruments”, for the ineffective portion.

Decreases in fair value with respect to the initial or previously measured amount will be credited, debiting the difference between the previous measurement and the current fair value, in the item and account:
“3231 Other comprehensive income of the current period”, in the corresponding account, for the effective portion, and in account “7110 05 Financial liabilities at fair value through profit or loss”, for the ineffective portion.

Credits will be made for the following reasons: discontinuation of hedge accounting when the hedge relationship (or a part of a hedge relationship) ceases to meet the required criteria (after considering any rebalancing of the hedge relationship, if applicable), this includes when the hedging instrument expires, is sold, resolved, or exercised, with debits to the corresponding accounts.

Item
(feature) 1134 AMORTIZED COST
This item must represent the value of financial instruments that the entities intend and have the ability to hold until maturity.

This item includes financial instruments managed by the entity within a business model whose objective is achieved by obtaining contractual cash flows; likewise, the contractual conditions of these financial instruments give rise at specific dates to cash flows that are solely payments of principal and interest on the principal amounts outstanding.

In each of the accounts in this item, subaccounts are included to present interest or similar accrued, established based on the contractual interest rate, and will be calculated using the effective interest method, applying the effective interest rate to the gross book amount of each financial asset, except for:
a) Financial assets acquired with credit impairment. For these financial assets, the entity will apply the effective interest rate adjusted for credit quality to the amortized cost of the financial asset from initial recognition. b) Financial assets that are not financial assets acquired with credit impairment but that have subsequently become financial assets with credit impairment.

For these financial assets, the entity will apply the effective interest rate to the amortized cost of the financial asset in subsequent presentation periods. An entity that, in a presentation period, calculates interest income by applying the effective interest method to the amortized cost of a financial asset in accordance with literal b) of the previous paragraph, will calculate, in subsequent presentation periods, interest income by applying the effective interest rate to the gross book amount if the credit risk on the financial instrument improves, such that the financial asset ceases to have credit impairment and the improvement may be objectively related to an event that occurs after the requirements of literal b) of the previous paragraph were applied. (Such as an improvement in the credit rating of a borrower).

Additionally, each account includes subaccounts for the recording of Impairment Adjustments, to include amounts established as expected credit loss on the portfolio of financial instruments subsequently measured at amortized cost, of financial assets subject to impairment review. These subaccounts will be debited with the amounts established in each evaluation according to the expected loss model and credited for value decreases arising from the same model.

The subaccount containing the impairment will be credited for said value with a debit to subaccount “7112 01 0200 Assets at amortized cost”.

Debits will be made for collection, improvement of risk rating, or derecognition of the asset from the balance sheet, with a credit to subaccount “6110 02 0600 Other Assets at amortized cost”, in case of impairment reversal or to the accounts of item 113 that correspond, in case of derecognition from the balance sheet.

Application of impairment value balances in these subaccounts is exempted for financial instruments issued or guaranteed by the Central Reserve Bank and by other State entities, payable with funds from the National Budget, which must be considered risk-free for the purposes of these valuations; consequently, the book value must be equal to the initial registration value.

Account 1134 00 DEBT INSTRUMENTS WITH QUOTED PRICE This account will be initially debited with the amount corresponding to fair value plus transaction costs incurred. Subsequently, these assets will be measured at amortized cost.

It will be credited for principal amortizations and on the date of their settlement.

Account 1134 01 DEBT INSTRUMENTS WITHOUT QUOTED PRICE This account will be initially debited with the amount corresponding to fair value plus transaction costs incurred. Subsequently, these assets will be measured at amortized cost.

It will be credited for principal amortizations and on the date of their settlement.

Item
(feature) 1138 RESTRICTED FINANCIAL INSTRUMENTS This item will show the balance of financial assets that have restriction conditions. The accounts of this item will separately reveal restricted balances and balances corresponding to financial assets with the indicated conditions.

Item 114 LOANS
Item
(feature) 1141 LOANS AGREED UP TO ONE YEAR TERM Accounts 1141 02/1141 08 LOANS TO STATE ENTITIES/LOANS TO NON-RESIDENT COMPANIES These accounts must present the current balances of capital, interest, and commissions, for loans granted to natural or legal persons whose term does not exceed one year, destined for different economic activities.

Subaccounts 1141 05-0401/0402 will record loans made to local banks through the approved credit line.

When it comes to portfolio purchase, the entity must obtain all source documentation, including magnetic files, which it will keep in its main offices available to the Superintendence of the Financial System, so that it may exercise its oversight powers when it deems appropriate.

Any portfolio sale contract must include a clause establishing the obligation described in the previous paragraph.

Account 1141 99 DISBURSEMENTS AND RECOVERIES TO APPLY This account is of a transitional nature; consequently, its balance in the monthly balance sheet must be equal to zero. It must be used when, for technological or operational reasons, it is not possible to apply the corresponding account directly.

Item
(feature) 1142 LOANS AGREED FOR MORE THAN ONE YEAR TERM Accounts 1142 02/1142 08 LOANS TO STATE ENTITIES/LOANS TO NON-RESIDENT COMPANIES These accounts must represent the current balances of capital, interest, and commissions, both in national currency and foreign currency, for loans granted to natural or legal persons, whose term is more than one year, destined for different economic activities.

Additionally, financial leases of movable and immovable goods granted to natural or legal persons, oriented towards financing assets dedicated to productive activity, are recorded in these accounts.

Subaccounts 1142 05-0401/0402 will record loans agreed for more than one year term for local entities through approved credit line.

In the case of loans with the credit line modality, all disbursements must have the same reference.

For the purposes of this Manual, from the validity of the “Standards for Classifying Credit Risk Assets and Establishing Prudential Reserves” (NCB-022), a refinanced credit is understood as a credit granted that cancels other credits with delinquency or payment capacity problems in whole or in part, and which changes the conditions of the previous credits, and a restructured credit is one that has been extended, rescheduled, or has been subject to any other legal or financial arrangement that modifies the originally agreed conditions.

Item
(feature) 1148 OVERDUE LOANS
Accounts 1148 02/1148 08
LOANS TO STATE ENTITIES/LOANS TO NON-RESIDENT COMPANIES These accounts must represent capital balances with delinquency exceeding 90 calendar days. (1)

The subaccounts of these accounts will be affected by reclassifications made from the subaccounts of the accounts of items 1141 and 1142.

Account 1148 99 LOAN RECOVERIES IN LAWSUIT COLLECTION This account must represent the amounts of loan recoveries that are being collected judicially.

Its balance will be a credit, therefore, it will be presented subtracting from the overdue portfolio.

Item 1149 PROVISION FOR UNCOLLECTABILITY OF LOANS Account 1149 01 PROVISION FOR UNCOLLECTABILITY OF LOANS The accounts of this item must represent provisions for specific risks, calculated based on the Standards for Classifying Credit Risk Assets and Establishing Prudential Reserves. Provisions representing specifically identified risks are: “By risk category”, “Restricted”, “By portfolio management risk”, “By excess of related credits”, “generic”, “by debtor rating risk”, “special”, and “Voluntary Provisions”, the latter when the risk that gave rise to the provision is identified.

Generic accounting applications
The accounting for increases and releases of the different prudential reserves will be made as follows:
a) Increases will cause an increase in the corresponding expense account and a credit in the complementary asset account that records the reserves in question; and

b) Decreases will cause a debit in the complementary account and a credit in the income account designated for recording the release of reserves.

Accounting applications to debtor reserves
Reserves for debtor rating (Private company, housing, and consumption) must be established to cover risks derived from the characteristics of each debtor.

Increases in these reserves may occur due to an increase in risk, by reclassifying the debtor into a higher risk category, or by corrections determined by the Superintendence, external auditors, or internal auditors.

Decreases in these reserves may occur due to modification of the debtor's rating, decrease in risk, or by coverage of the guarantee.

These reserves may suffer decrements when loan balances are withdrawn from assets, according to each entity's policies or by Technical Standards issued by the Central Reserve Bank of El Salvador through its Standards Committee.

Debits to the reserve for asset write-offs will be made up to the reserved value of each loan; if the written-off value is higher than the established reserve, it will be applied to the expense account that records intermediation asset write-offs.

Accounting applications to voluntary reserves
Voluntary prudential reserves will be increased or decreased when and by the amounts determined by each entity.

Accounting applications to restricted voluntary reserves Prudential reserves released by reclassifying debtors attending to guarantee coverage may only be decreased with the authorization of the Superintendent.

Applications to other classes of reserves
The other classes of prudential reserves not described in the above classification will be increased or decreased, according to particular instructions issued by the Superintendence in each case.

Classification 12 OTHER ASSETS
Item (1) 121 (1) BALANCES BETWEEN COMPANIES (1) Item (feature) (1) 1210 (1) BALANCES BETWEEN COMPANIES (1) Account (1) 1210 00 (1) BALANCES BETWEEN COMPANIES (1) The accounts of this item must represent balances pending settlement between the different companies linked to the entity, whether agencies, subsidiaries, national or foreign, and foreign banks; due to their transitional nature, balances with national agencies, at the end of each month, must be equal to zero. (1) (3)

The use of subaccounts 1210 00 0301, 1210 00 0302, 1210 00 0701, and 1210 00 0702 is exclusive for Cooperative Banks, Savings and Credit Societies, and Financial Federations regulated by the corresponding Law. (1)

Item 122 GOODS RECEIVED IN PAYMENT OR ADJUDICATED Item (feature) 1220 GOODS RECEIVED IN PAYMENT OR ADJUDICATED Accounts 1220 01/1220 03 IMMOVABLE PROPERTY/FINANCIAL INSTRUMENTS These accounts must represent the existence of goods whose ownership derives from judicial actions, voluntary transfer, purchase, etc., in substitution of loans, credits, or financial leases granted by the entity.

The accounting for these goods will be made based on “SECTION IV RECOGNITION, MEASUREMENT, AND PRESENTATION OF EXTRAORDINARY ASSETS”. (1)

The reclassification of extraordinary assets proceeds only with the authorization of the Superintendence, provided they meet the requirements contained in the penultimate paragraphs of articles 72 of the Banks Law and 47 of the Cooperative Banks and Savings and Credit Societies Law; extraordinary assets represented by financial instruments will not be subject to reclassification. (3)

The subaccount “Balances owed by debtors” will represent the difference between the judicial adjudication value and the balances owed by the debtor; in the case of financial leases, it will represent the difference between the value of the good and the balance pending payment owed by the financial lessee.

Account 1220 04 CONSTRUCTIONS IN PROGRESS
This account must represent expenditures made during the process of

construction of additions or improvements that prolong the useful life of the good or increase its value.

Item 123 INVENTORY
Item
(feature)
1230 INVENTORY
The accounts of this item must represent the acquisition cost of the different goods used for the development of business management, for example, stationery and supplies used by the business activity, and those sold to the public.

Item 124 PREPAID EXPENSES
Item
(feature) 1240 PREPAID EXPENSES
The accounts of this item collect expenditures incurred on goods and services that will be expensed over the accounting period or in subsequent periods and that meet the definition of an asset. The corresponding amounts will be applied to the corresponding expense by applying the accounting policy that the entity has for such purposes.

The accounts of this item must represent the value of expenditures for the concepts corresponding to each account and subaccount of the item.

The accounts of this item must represent the proportional value of valid insurance premiums, and the other concepts corresponding to each account of the item.

Repealed. (3)

Item 125 ACCOUNTS RECEIVABLE
Item
(feature) 1250 ACCOUNTS RECEIVABLE
The accounts of this item must represent accrued income, which has not yet been paid by debtors, payment on behalf of others, advances, and other concepts that do not correspond to the accounts and subaccounts of the item. Likewise, commissions that have not yet been paid by the Fund Manager for the marketing of participation units of Open Investment Funds, both Local and Foreign, and commissions that have not been paid for the provision of marketing and administration services of Voluntary Previsional Savings Funds, will be recorded.

It will be debited for accrued benefits with credits to the corresponding contra-accounts. It will be credited for the recovery of benefits or when they are withdrawn from the balance sheet due to established uncollectability.

The use of account 1250 01 BALANCES RECEIVABLE is exclusive for Cooperative Banks, Savings and Credit Societies, and Financial Federations regulated by the corresponding Law. (1)

The use of subaccounts from 1250 03 1301 to 1250 03 2001 is exclusive for Cooperative Banks, Savings and Credit Societies, and Financial Federations regulated by the corresponding Law. (1)

Account 1250 08 SALES OF FINANCIAL ASSETS
This account records balances pending receipt in the sales of investment financial instruments on the trade date with credits to the accounts of item “113 Investment financial instruments”.

Its balance will be credited on the settlement date with a debit to the accounts of item “111 Liquidity”.

Account 1250 09 ACQUISITION
It represents accounts receivable from the business affiliated to the acquiring entity for promissory notes sent for collection as part of cardholder purchases. It is credited when the affiliated business receives payment from the acquiring business. The account will always apply whenever an entity obligated to apply this Manual functions as an affiliated entity.

Account 1250 10 EXCHANGE
This account will be increased by debiting it with the amounts corresponding to settlements made to affiliated businesses (when the entity acts as acquirer and is also the card issuer) as part of the cancellation of operations that cardholders from issuers other than the entity (outgoing operations), local or foreign, performed in the affiliated business. The entity settles the net transactions of commissions, which are applied to the subaccount “6210 04 0600 Commissions by acquiring” and sends for collection the disbursed amounts. The account is decreased by crediting it at the moment the entity receives the pertinent net refunds of exchange commissions, which are applied to the subaccount “7110 12 0200 Exchange commissions”. (Tripartite figure).

In the event that the acquiring entity and the issuing entity are different, then this account is debited for the amount of the promissory notes that the acquiring entity has sent to the issuing entity. It is credited when the issuing entity remits payment of the promissory notes net of the interchange commission, which is applied to the sub-account “6210 04 0700 Interchange Commissions”. (Four-party figure)

Account 1250 11 ASSET MANAGEMENT
This account will be affected by debiting it with balances owed by entities that act as asset managers for the entity. The indicated balances originate from claims filed by the entity's clients, for example, for payments made at the asset management entity that have not been applied to the client's statement, which causes payment delays. This situation alerts the client to file a claim, with a credit to the claiming client's account. The account is credited with a debit to the account that receives the refund of the pending application that gave rise to the balance.

Account 1250 12 COLLECTORS
This account will be affected by debiting it with balances owed by entities that act as collectors for the entity's accounts (loans or other similar operations). The indicated balances originate from claims filed by the entity's clients, for example, for payments made at the collecting entity that have not been applied to the client's statement, which causes payment delays. This situation alerts the client to file a claim, with a credit to the claiming client's account. The account is credited with a debit to the account that receives the refund of the pending application that gave rise to the balance.

Account 1250 13 DIVIDENDS
This account will be affected by debiting it with the amounts of dividends decreed by the entity in which the entity holds a participation, with a credit to Account “6310 04 Dividends”, in the corresponding sub-account. It is credited on the date when dividend settlements are received.

Account 1250 99 0301 Tax Credit - VAT
This sub-account is debited for the amounts of the tax on the transfer of movable goods and on the provision of services (VAT) paid on the purchase of movable goods or acquisition of services. It is also debited for the amounts corresponding to the percentage of VAT withheld by large taxpayers for sales made to them. Furthermore, it is debited for the amount received by large taxpayers for purchases made from them. It is credited monthly when the VAT settlement is made with a debit to the sub-sub-accounts of the sub-account “222 0 99 0201 VAT fiscal debit”, for the amount payable to the tax authority.

In any case, the breakdown of the sub-sub-accounts will be used to the extent that they are applicable to the entities using this Manual.

Item
(characteristic) 1251 TAXES

Account 1251 01 CURRENT INCOME TAX
Current tax assets, arising from the current or prior periods, must be measured by the amounts expected to be recovered from the tax authority, using the regulations and tax rates in effect on the balance sheet date.

This account is debited in the following circumstances:

Sub-account 1251 01 0101 Payment on account
For the amounts of payment on account established on the amount of gross income of the monthly fiscal period to be declared, with a credit to the sub-account “2221 01 0101 Payment on account”.

Sub-account 1251 01 0201 Withheld tax
For the amounts of tax withheld by third parties, with a credit to the financial asset affected by the withholding.

Sub-account 1251 01 0301 Remainder of income tax This account is affected by a debit for the amount established as a remainder when settling, with a debit, the sub-account “2221 01 0201 Income tax for the period” and with a credit, the sub-accounts “1251 01 0101 Payment on account” and “1251 01 0201 Withheld tax”.

This account represents a tax credit in favor of the taxpayer (the entity) for the excess of advance payment on account paid, which may be deducted in subsequent fiscal periods. It is the result of the positive difference of a) the sum of the assets “Payment on Account” and “Withheld Tax” minus b) the liability “Income taxes payable”.

Account 1251 02 DEFERRED INCOME TAX
It will be debited, initially, for the amount of deferred tax assets computed, applying the current tax rates, on deductible temporary differences that on the date they are constituted increase fiscal income and whose future reversal will increase fiscal expenses, thereby decreasing future tax payable, with a credit to the sub-account “8150 04 0100 Constitution of deductible temporary differences (Credit Balance)”.

It will be credited when the deductible temporary differences constituted in prior periods or in the current period are reversed, with a debit to the sub-account “8150 03 0100 Reversal of deductible temporary differences (Debit Balance)”.

It will be debited or credited, as appropriate, in subsequent reviews, generally at the end of the accounting period, when management makes the corresponding adjustments based on the temporary differences recorded in prior periods and those established in the current period.

It should be noted that on some occasions, deferred assets or liabilities for temporary differences will affect equity accounts instead of income statement accounts; in such cases, the equity account will be recorded net of the corresponding asset or liability; example: revaluations of property, plant and equipment, fluctuations in the value of financial assets with changes in other comprehensive income, exchange differences established in the consolidation of foreign businesses, etc.

Such deferred tax asset or liability will be reversed gradually as the asset or liability that affected equity is realized or removed from the balance sheet.

The criteria that gave rise to the recording of these assets must be evaluated at least on each annual closing date.

The entity must have a control register that allows for the reliable identification of the assets or liabilities that generate the temporary differences and the values corresponding to such differences, both of the current period and of prior periods, which will facilitate appropriate reconciliations and disclosures regarding income and expenses of income taxes.

The book value of deferred tax assets and liabilities may change, even when the amount of the corresponding temporary differences has not changed. This may happen, for example, as a result of:
a) A change in tax rates or regulations; b) A reassessment of the recoverability of deferred tax assets; or c) A change in the expected manner of recovering the book value of an asset.

The deferred tax corresponding to these changes will be recognized in the income statement except to the extent that it relates to items previously charged or credited directly to equity accounts.

The proposed treatment of income and expenses for both current and deferred taxes is aligned with the financial framework; the effects of the application of the fiscal framework are not treated here.

Item 1259 ESTIMATE OF LOSS FOR IMPAIRMENT
This item must represent the estimate of uncollectibility for the accounts in this item; its balance is a credit, consequently, it is presented decreasing the item to which it belongs.

It will be debited for reductions in impairment, occurring due to the improvement in the credit quality of the asset, due to a reduction in the outstanding balance, or because the impaired asset is removed from the balance sheet.

Item 126 INVESTMENTS IN SHARES, RIGHTS AND PARTICIPATIONS

Item 1260 INVESTMENTS IN SHARES, RIGHTS AND PARTICIPATIONS The accounts in this item must represent the value of investments in companies permitted by the Laws, investments in contributions or shares that each cooperative makes in the federation to which it is affiliated; as well as memberships derived from financial activity.

The recognition process of assets entered into this group is subject to compliance with all measurement principles established in IFRS 3 “Business Combinations”. From this standard, it follows that the amounts to be recognized in this group, when they first appear on the balance sheet, as a result of a business combination where the entity is the acquirer, will be equivalent to the identifiable assets acquired and liabilities assumed at their fair values on the date of acquisition. For each business combination, the acquirer shall measure any non-controlling interest in the acquiree at fair value or by the proportionate share of the non-controlling interest in the identifiable net assets of the acquiree.

The recognition conditions defined by the accounting standard are as follows:
a) To meet the recognition conditions as part of the application of the acquisition method, the identifiable assets acquired and liabilities assumed must satisfy, on the date of acquisition, the definitions of assets and liabilities of the Conceptual Framework for the Preparation and Presentation of Financial Statements; and b) Furthermore, to meet the recognition conditions as part of the application of the acquisition method, the identifiable assets acquired and liabilities assumed must be part of what the acquirer and the acquiree (or their previous owners) exchanged in the business combination transaction and not the result of separate transactions.

The exceptions established for the recognition of assets and liabilities acquired in a business combination will cause some items to be:
a) Accounted for applying additional recognition conditions to those defined in said standard or applying the requirements of other IFRSs, which will give results different from those obtained by applying the conditions and the recognition principle; and b) Measured at amounts different from their fair values on the date of acquisition.

The presentation of investments in shares held in the entity's books will be made as follows:

Separate Financial Statements
Investments in subsidiaries, interests in joint ventures and associates, in the entity's separate financial statements will be presented at cost or the equity method.

Accounting Application
The accounts in this group are debited for the amounts of consideration delivered for the acquisition of the subsidiary or joint venture, with a credit to the accounts supporting the delivery of the consideration.

Consolidated Financial Statements
In the consolidated financial statements, investments in shares will be presented as follows:
a) Subsidiaries, they will be consolidated, using the full consolidation method; and b) Joint ventures, which meet the condition of joint control, using the equity method.

Other aspects to consider

a) From the date on which the jointly controlled entity becomes a subsidiary of the participant in the joint venture, it will account for its participation by the full consolidation method in the consolidated financial statement and by the cost or equity method in the separate financial statement. b) Similarly, from the date on which the jointly controlled entity becomes an associate of the participant in the joint venture, it will account for its participation by the equity method in the consolidated financial statement and by the cost or equity method in the separate financial statement.

The use of sub-account 1260 03 0401 Contributions to federations is exclusive for Cooperative Banks, Savings and Credit Societies, and Financial Federations regulated by the corresponding Law. (1)

Item
(characteristic) 1261 PURCHASED GOODWILL
Goodwill is an asset that represents future economic benefits arising from other assets acquired in a business combination that are not identified individually nor recognized separately.

Item 127 ASSETS HELD FOR SALE

Item
(characteristic) 1270 ASSETS HELD FOR SALE

Account 1270 01 LONG-TERM ASSETS
This account will be composed of long-term assets reclassified from a previous category to this category, because management has decided to recover them through a sale operation rather than through continuous use. These assets will not be depreciated while they are classified in this category.

Assets disposed of to be realized in their current condition, under the usual and customary terms for their sale, and where the sale is highly probable, are reclassified to this item.

For the sale to be highly probable, management must be committed to a plan to sell the asset, and must have actively initiated a program to find a buyer and complete the plan. Furthermore, the sale must be actively negotiated at a reasonable price, in relation to its current fair value. Also, it should be expected that the sale would qualify for full recognition within one year from the date of classification, and additionally, the actions required to complete the plan must indicate that there is no probability of significant changes in the plan or that the same will be withdrawn.

An extension of the period required to complete the sale in a time greater than one year does not prevent the asset from being maintained in this item, if the delay is caused by facts or circumstances beyond the entity's control, and there is sufficient evidence that the entity remains committed to its plan to sell the asset. Consequently, the entity will be exempt from applying the one-year requirement in the following situations: (2) a) On the date the entity commits to a plan to sell a long-term asset, there is a reasonable expectation that third parties other than the buyer will impose conditions on the transfer of the asset that will extend the period necessary to complete the sale; and additionally:
i. The actions necessary to respond to those conditions cannot be initiated until after a firm purchase commitment has been obtained, and
ii. A firm purchase commitment is highly probable within one year.
b) The entity obtains a firm purchase commitment and, as a result, the buyer or other third parties have unexpectedly imposed conditions on the transfer of the long-term asset, which will extend the period required to complete the sale, and additionally:
i. Necessary actions to respond to the imposed conditions have been taken in a timely manner, and
ii. A favorable resolution of the factors causing the delay is expected.
c) During the initial one-year period, circumstances arise that were previously considered unlikely and, as a result, the long-term asset previously classified as held for sale has not been sold by the end of that period, and additionally:
i. During the initial one-year period, the entity undertook the necessary actions to respond to the change in circumstances,
ii. The long-term assets are being actively marketed at a reasonable price, given the change in circumstances, and
iii. The criteria established in paragraphs two and three of this description are met.

Account 1270 02 DISCONTINUED OPERATIONS
Investments in shares brought from item 126 because they are reclassified as discontinued activities, will be recorded as follows:

Sub-account 1270 02 0101 Subsidiaries

In separate financial statements (in the case of reclassifications).
The entity will record such an investment at the lower of cost and net fair value of disposal costs.

In consolidated financial statements (in the case of reclassifications).
At the lower value between the net fair value of sale of the entire subsidiary and the consolidated book value. That is, first, the subsidiary is consolidated, and its full book value is obtained; next, the net fair value of 100% of the ownership is determined, and the impairment loss that results is accounted for (attributing to non-controlling interests their share in the losses attributed to the subsidiary's assets other than goodwill).

Sub-account 1270 02 0201 Joint Ventures
They are presented in the consolidated balance sheet at the lower value resulting from applying the equity method and their net fair value of disposal costs.

Sub-account 1270 02 0301 Group of assets for disposal They will be initially debited for the amount of assets reclassified from other categories to this category, which will be recognized at the lower of their book value and fair value less costs to sell.

In the case of entities under joint control and associated entities, they are recorded, from their acquisition at the net fair value of disposal costs.

It is initially recorded at the net fair value established for the subsidiary; that is, with a debit for the value of the assets and a credit to account “224 1 01 Liabilities associated with assets held for sale”, for the value of the liabilities. (1)

The net of tax income or expenses generated by these investments will be presented separately within the income statement.

In the case of assets other than investments in shares, consider the following:

They will be initially debited for the amount of assets reclassified from other categories to this category or for the amount of assets acquired exclusively with the intention of selling them, on this same date it must be recognized at the lower of their book value and fair value less costs to sell.

Subsequently, it will be debited for gains originating from subsequent increases in fair value less costs to sell up to an amount that does not exceed the impairment recognized with the application of the regulations for these assets or with the previous regulation applicable to it; in the latter case, it could be the entity's internal policies or, in the absence thereof, the direct application of IAS 36, crediting the sub-accounts of account “6310 09 Gains from reversals of asset impairment”, the corresponding one.

They will be credited in the following circumstances:

For impairment losses arising from comparing the book value with its fair value less costs to sell, debiting the accounts of item (characteristic) “7214 Losses from asset impairment”, the corresponding one.

When disposed of, debiting the accounts of item (characteristic) “7215 “Loss on sale of assets”, in case of loss, and in account “6310 02 Gain on sale of assets”, in case of profit.

The entity will measure the non-current asset that ceases to be classified as held for sale (or that ceases to form part of a group of assets for disposal classified as held for sale) at the lower of:
Its book value before the asset (or group of assets for sale) was classified as held for sale, adjusted for any depreciation, amortization or revaluation that would have been recognized if the asset (or group of assets for disposal) had not been classified as held for sale; and The recoverable amount on the date of the subsequent decision not to sell it.

Classification 13 PHYSICAL AND INTANGIBLE ASSETS

Item 131 NON-DEPRECIABLE PROPERTIES

Item 1310 NON-DEPRECIABLE PROPERTIES
The accounts in this item must represent the value of goods that by their nature are not subject to depreciation or because they are not being used temporarily.

Such assets are subject to the recognition of impairment loss whenever the book value of the asset is greater than its recoverable amount.

Item 132 DEPRECIABLE PROPERTIES AND EQUIPMENT

Item
(characteristic) 1320 DEPRECIABLE
The accounts in this item must represent the value of goods that the entity uses for the development of its business. They must be goods that are subject to loss of value due to the

use or by the action of time. (3)
The entity shall initially recognize all items of property and equipment at cost.
With respect to assets included in the accounts of this category that correspond to assets acquired under operating lease contracts, these shall be recognized at the cost established in accordance with the corresponding technical regulations. Subsequent to their recognition as an asset, any item of property and equipment, including financial leases incorporated in this category, shall be accounted for at its acquisition cost less accumulated depreciation and any amount of impairment loss. (2)

Category
(characteristic) 1329 ACCUMULATED DEPRECIATION AND IMPAIRMENT (-) Account 1329 00 ACCUMULATED DEPRECIATION (-) (1) Account 1329 02 ACCUMULATED IMPAIRMENT (-) This category must represent the value of the depreciation of all depreciable assets; its balance is a credit, consequently, it is presented decreasing the category to which it belongs. In the case of renovations carried out on leased assets, they must be amortized over a period not exceeding that of the lease contract or the useful life, whichever is shorter. Account 1329 02 is credited with the amounts of impairment losses established with a debit to the accounts of the category (characteristic) “7214 Loss from impairment of assets”, applying the corresponding account. Impairment recording:
In the case of impairment loss, account “1329 0 2 Accumulated Impairment” is credited with a debit to account “7214 02 Property and Equipment”.
When the impairment loss is reversed, account “1329 0 2 Accumulated Impairment” is debited with a credit to subaccount “6310 09 0200 Property and Equipment”.
The new book value of the asset after the reversal of an impairment loss shall not exceed the book value that could have been obtained (net of depreciation) had no impairment loss been recognized for the asset in previous periods.

Category 133 INTANGIBLES
Category
(characteristic) 1330 INTANGIBLES
The treatment for intangible assets is analogous to that defined for depreciable property and equipment assets.
The balance of the intangible account showing software programs must be considered to establish the limit on investments in real estate and furniture, established in Article 236 of the Banks Law and Article 45 of the Banks, Savings and Credit Societies Law. (3)

Category
(characteristic) 1339 ACCUMULATED AMORTIZATION AND IMPAIRMENT (-) Account 1339 01 AMORTIZATION (-) Account 1339 02 ACCUMULATED IMPAIRMENT (-) This category must represent the value of the amortization of intangible assets; its balance is a credit, consequently, it is presented decreasing the category to which it belongs. Account 1339 02 is credited with the amounts of impairment losses established with a debit to the accounts of the category (characteristic) “7214 Loss from impairment of assets”, applying the corresponding account. Impairment recording:
In the case of impairment loss, account “13 39 02 Accumulated Impairment” is credited with a debit to account “7214 0 3 Intangible Assets”.
When the impairment loss is reversed, account “13 39 02 Accumulated Impairment” is debited with a credit to subaccount “6310 09 0 400 Intangibles”.
The new book value of the asset after the reversal of an impairment loss shall not exceed the book value that could have been obtained (net of depreciation) had no impairment loss been recognized for the asset in previous periods.

Classification 14 REPEALED (1)
Repealed (1)

SECTION II
ACCOUNTING APPLICATIONS MANUAL OF LIABILITIES
Element 2 LIABILITIES
Classification 21 LIABILITIES
Category 210
FINANCIAL LIABILITIES AT FAIR VALUE WITH CHANGES IN RESULTS (FVCR) This category includes all financial liabilities that the entity has the obligation to measure at fair value with changes in results, as well as those that the entity has chosen to designate at fair value with changes in results. (2) It should be noted that international regulations establish for financial liabilities designated at fair value with changes in results the condition of taking to other comprehensive income the gains or losses corresponding to credit risk, unless such treatment implies a accounting asymmetry. All financial instruments aggregated in this category are characterized by the fact that their valuation will always be at fair value and any financial derivative instrument that ceases to meet the conditions to be maintained as a designated item of effective hedge accounting will be presented within this category. (2) In all accounts of this category, subaccounts are included to present the amounts of financial interest accrued charged to the expense account “7110 05 Financial liabilities at fair value with changes in results”, subaccounts that are debited when the interest of the related financial instruments is amortized, with a credit to the corresponding availability accounts or others if required.

Category
(characteristic) 2100 HELD FOR TRADING
Accounts 2100 01/
2100 03
HELD FOR TRADING OTHER THAN
DERIVATIVES/ DESIGNATED AT FAIR VALUE
WITH CHANGES IN RESULTS
In these accounts, all financial instruments that have been acquired or issued, the latter in the case that the entity has authorization to be a market maker, with the intention of trading them in the short term, shall be recognized. They are credited at their fair value on the date they are acquired or issued, in the case that their value is different from zero and that value represents an obligation for the entity on that date, with a debit to the expense subaccounts in which they record the changes in the fair value of investment financial assets at fair value with changes in results, in the case of acquisition; or in the case of the generation of the same. In the case that the acquisition generates transaction costs, these are applied to results on the date of the transaction with a debit to account “7114 01 Transaction costs”. The accounts of this category are debited when the acquired or issued item is cancelled, settled, or extinguished with a credit to the corresponding income and expense accounts and to the relevant availability accounts. (2)

Account 2100 04 DERIVATIVES FOR HEDGE ACCOUNTING This account will include financial instruments designated for the hedge of specifically identified risks, which may affect the results of the entity as a consequence of variations in the fair value or in the cash flow of one or more concrete elements, or in a net investment in foreign currency, referred to as covered items. (2)

Subaccounts
2100 04 01 01 /
2100 04 01 02
Fair value hedges - ML / Fair value hedges - ME Fair value hedge covers the exposure to change in the fair value of a recognized asset or liability or a firm commitment to buy or sell an asset at a set price, or the exposure of a specific portion of such asset, liability, or firm commitment, which is attributable to a particular risk and which could affect the results of the entity. In fair value hedge, the gain or loss arising from remeasuring the hedging instrument to fair value (in the case of a derivative) or the foreign currency component of a recorded amount (in the case of a non-derivative) is recognized in the period result. At the same time, the recorded amount of a covered item is adjusted by the gain or loss attributable to the covered risk, if applicable, and will be recognized in the period result. Any adjustment made on the covered items will be amortized through the period result if the covered item is a financial instrument (or a component of it) measured at amortized cost. Amortization will begin as soon as the covered item ceases to be adjusted by the hedging gains or losses or as soon as there is an adjustment to it.

Amortization will be based on the effective interest rate, recalculated on the date amortization begins.
However, when it concerns a fair value hedge of the exposure to the interest rate of a portfolio of financial assets or financial liabilities (and only for this form of hedge) and amortization using a recalculated effective interest rate is impracticable, the adjustment will be amortized using a linear method. In any case, the adjustments will be fully amortized upon maturity of the financial instrument or, in the case of a portfolio covered only by interest rate risk, upon expiration of the interest review period. This account is credited by upward fluctuations in fair value with respect to the initial value or the previously measured value, debiting the result account within the expense accounts by the difference between the previous measurement and the current fair value, in account “7111 02 Changes in fair value of financial liabilities at fair value with changes in results”, in the corresponding subaccount. This account is debited by downward fluctuations in fair value with respect to the initial value or the previously measured value, crediting the income account “6110 02 Investment financial instruments”, in the corresponding subaccount.

Subaccounts
2100 04 02 01/
2100 04 02 02
Cash flow hedges-ML/ Cash flow hedges-ME
Cash flow hedge covers the exposure to variation in cash flows that:
a) Is attributable to a particular risk associated with a recognized asset or liability or with a planned transaction (future operation but not committed) and b) Could affect the results of the entity. The portion of the gain or loss, on the hedging instrument, determined as an effective hedge will be recognized directly in the equity account of other comprehensive income category (characteristic) “3231 Other Comprehensive Income of the current year”, in the corresponding subaccount, while the ineffective portion will be recognized in the results either in account “6310 08 Gains from ineffective amounts in hedge operations” or in account “7213 01 Loss from ineffective amounts in hedge operations”, whichever applies. The accumulated amount in the cash flow reserve is accounted for as follows:
a) If a covered planned transaction subsequently gives rise to the recognition of a non-financial asset or a non-financial liability, or a covered planned transaction for a non-financial asset or a non-financial liability becomes a firm commitment for which fair value hedge accounting applies, the entity eliminates that amount from the cash flow hedge reserve and includes it directly in the initial cost or other amount of the asset or liability. b) For cash flow hedges other than those covered by a), that amount is reclassified from the cash flow hedge reserve to the period result as a reclassification adjustment in the same period or periods during which the expected future cash flows covered affect the period result (for example, in the periods in which interest income or interest expense is recognized or when a planned sale takes place). If the hedge reserve is a loss and an entity expects that all or part of it will not be recovered in one or more future periods, the amount that is not expected to be recovered is immediately reclassified to the period result as a reclassification adjustment. When an entity discontinues this hedge accounting, it accounts for the amount that has been accumulated in the cash flow hedge reserve as follows:
a) If it is expected that the covered future cash flows will still occur, that amount is maintained in the cash flow hedge reserve until the future cash flows occur or until letter c) of the previous paragraph is applied. When the future cash flows occur, what is established in the previous paragraph is applied, b) If it is no longer expected that the covered future cash flows will occur, that amount is immediately reclassified from the cash flow hedge reserve to the period result as a reclassification adjustment. It is debited by downward fluctuations in fair value with respect to the initial or previously measured value, crediting the difference between the fair value and that previous measurement, in the accounts:
From the category (characteristic) “3231 Other comprehensive income of the current year”, in the corresponding subaccount, for the effective part and 6310 08 Gains from ineffective amounts in hedge operations”, for the ineffective part. It is credited by upward fluctuations in fair value with respect to the initial or previously measured value, debiting the difference between the previous measurement and the current fair value, in the accounts:

From the category (characteristic) “3231 Other comprehensive income of the current year”, in the corresponding subaccount, for the effective part, and in “7213 01 Loss from ineffective amounts in hedge operations”, for the ineffective part. It is debited for the following reasons: discontinuation of hedge accounting when the hedge relationship (or a part of a hedge relationship) ceases to meet the required criteria (after taking into account any rebalancing of the hedge relationship, if applicable) this includes when the hedging instrument expires, is sold, resolved, or exercised, with a credit to the corresponding accounts.

Category 211 FINANCIAL LIABILITIES AT AMORTIZED COST The initial recognition of the liabilities of this category is measured at fair value, less transaction costs that are directly attributable to the acquisition of the liability. (2)

Category
(characteristic) 2110 DEMAND DEPOSITS
The accounts of this category must represent the value of demand deposits, savings deposits, and simplified savings account deposits.
They are initially credited by the monetary amount received with a debit to the corresponding contra accounts.
They are debited by the depositor's withdrawals with a credit to the corresponding availability accounts or others if required.
The transaction cost incurred directly to generate the transaction is taken directly to results on the date of the contract celebration to account “7114 01 Transaction costs”.
The subaccounts named “Deposits to Apply” and “Withdrawals to Apply” are of a transitory nature; at the end of each month, their balance must be equal to zero. They must be used when, for technological or operational reasons, it is not possible to apply the corresponding account directly.

Category
(characteristic) 2111 AGREED DEPOSITS UP TO ONE YEAR TERM The accounts of this category must represent the value of agreed deposits to be returned on a pre-established date, backed by a certificate, receipt, or

any other forms of contract. The amount of these obligations must be equal to the nominal value of the issued contracts.

Category
(characteristic) 2112 AGREED DEPOSITS FOR MORE THAN ONE YEAR TERM This category must represent the value of firm deposits (which do not allow remittances and withdrawals) backed by a receipt or deposit certificate, for terms greater than one year.

Category
(characteristic) (1) 2113 (1) NEGOTIABLE DEPOSIT CERTIFICATES (1) The accounts of this category must represent the value of agreed deposits to be returned on a pre-established date, backed by a certificate, receipt, or any other forms of contract, with the characteristic that they may be negotiable. The amount of these obligations must be equal to the nominal value of the issued certificates. (1) They are initially credited by the monetary amount received with a debit to the corresponding contra accounts. (1) They are debited by the withdrawals of the certificate holders with a credit to the corresponding availability accounts or others if required. (1)

Category
(characteristic) 2114 RESTRICTED AND INACTIVE DEPOSITS This category (characteristic) must represent the value of restricted deposits, given as guarantees by their holders in favor of the entity, those seized by judicial action, and those inactive. (3) The accounts of this category will be affected by deposits that are reclassified from categories (characteristic) 2110 to 2112. The reclassification will take place for causes such as pledge of the deposit in favor of the entity, compliance with judicial orders, the deposit is seized or restricted, or since the last time the depositor showed awareness of the existence of the account, a period of time has elapsed that, in accordance with the entity's internal policies, meets the conditions for the information systems to classify it as an inactive deposit, reclassifying it to this category and other similar conditions. They are credited with the amount of the reclassified deposits with a debit to the accounts of categories 2110 to 2112. They are debited when the conditions that originated the reclassification of the deposit disappear with a credit to the accounts from which they were originally brought or others if required.

Category
(characteristic) 2115 OPERATIONS WITH REPURCHASE AGREEMENT The accounts of this category (characteristic) will be increased by the amounts representing the obligations assumed by the entity when acting as the reporting entity in repo operations. The amounts recorded in this account must represent the fair value of the operations on the date of the transaction, according to the rules established in the Commercial Code or carried out in stock exchanges. The use of subaccounts 2115 06 0101 to 2115 06 0702 is exclusive for Cooperative Banks, Savings and Credit Societies, and Financial Federations regulated by the corresponding Law. (1)

Category
(characteristic) 2116 AGREED LOANS UP TO ONE YEAR TERM In this category, obligations contracted by the entity with third parties, domiciled or not domiciled, whether for the development of the business, increase in financing capacity, adequacy of solvency, liquidity, or others, will be recorded. The obligations are initially recognized at their fair value, which will generally be equal to the contractual amount agreed less the transaction costs incurred, and subsequently measured at amortized cost applying the effective interest rate method.

Account 2116 01 OWED TO BCR
This account must represent the value of obligations with the Central Reserve Bank, for loans received according to the concepts indicated in letters a) and b) of Article 49-B, of the Banks Law, and in letters a), b), c) and d) of Article 49-A of the Organic Law of the Central Reserve Bank. (3)

Account 2116 02 OWED TO STATE ENTITIES
This account must represent the value of obligations with state entities, which are not part of the Financial System.

Account 2116 03 OWED TO THE DEPOSIT GUARANTEE INSTITUTE

This account must represent the value of obligations with the Deposit Guarantee Institute, in accordance with Article 106 of the Cooperative Banks and Savings and Credit Societies Law and literal d) of Article 174 of the Banks Law.

Account 2116 05 DEBTORS TO BANKS
This account shall represent the value of obligations with local banks, for loans obtained for the business activity.

Likewise, this account must represent the value of obligations with other banks, for loans obtained for the normal development of the bank's activities, as established in Article 51 of the Banks Law in literal l). Under no circumstances shall loans referred to in Article 78 of the Banks Law be included in this account.

Account 2116 06 DEBTORS TO OTHER ENTITIES OF THE FINANCIAL SYSTEM This account shall represent the value of obligations with other financial entities, for loans obtained for the business activity.

The use of subaccounts 2116 06 0401 to 2116 06 0902 is exclusive for Cooperative Banks, Savings and Credit Societies, and Financial Federations regulated by the corresponding Law. (1)

Account 2116 07 DEBTORS TO BANDESAL TO LEND TO THIRD PARTIES This Account must represent the value of obligations with the Development Bank of El Salvador, for funds received to place with the public, under the conditions established by that institution.

These loans for Banks are those referred to in the second paragraph of Article 59 of the Banks Law.

These loans for Savings and Credit Societies are those referred to in the second paragraph of Article 157 of the Cooperative Banks and Savings and Credit Societies Law. (3)

Account 2116 08 DEBTORS TO FOREIGN ENTITIES
This account must represent the value of obligations contracted with foreign entities, for loans obtained to be placed in active operations.

The use of subaccounts 2116 08 0501 to 2116 08 0502 is exclusive for Cooperative Banks, Savings and Credit Societies, and Financial Federations regulated by the corresponding Law. (1)

Account 2116 09 OTHER LOANS
This Account must represent the value of obligations contracted with entities that are not included in the previous classifications.

Account 2116 10 DEBTORS FOR LEASES
This account will be increased by crediting it with amounts representing liabilities assumed in the concept of operational or financial leases entered into.

Upon initial recognition, this account will be affected by the present value of leases that have not been paid on the lease commencement date.

Subsequently, the lease liability shall be measured as indicated by the corresponding technical standard.

Account 2116 11 LOANS CONVERTIBLE INTO SHARES
This account shall represent obligations contracted with other financial institutions, based on what is established in Article 78 of the Banks Law and in Article 70 of the Cooperative Banks and Savings and Credit Societies Law.

In these operations, the entity may incur the following obligations:
a) Deliver an amount of cash equivalent to the debt amount plus contractual interest, in the case that the holder of the composite instrument does not exercise the option and provided that the entity is regularized, with prior authorization from the Superintendence; b) Deliver a fixed number of ordinary shares, upon maturity of the composite instrument in exchange for the liability related to the principal, in case the holder of the instrument exercises the convertibility option.

The entity's contractual obligation to make future payments will remain in force until its extinction by conversion, maturity of the instrument, or some other transaction.

In all cases, an analysis of the transaction must be made to demonstrate that it meets the conditions of a composite instrument or to discard them. If the existence of a composite financial instrument is validated, proceedings must be in accordance with the applicable current legislation and the corresponding technical standard.

At the date of its initial recognition, the liability component is credited at its fair value, which will be the present value of the future cash flow stream determined contractually, discounted at the interest rate that the market applies at that time for instruments of a similar credit status and that provide substantially the same cash flows, on the same terms, but without the conversion option. The amount corresponding to the equity component is also credited in the account “3210 05 Equity component on convertible debt” with a debit to the corresponding availability account. In the same entry of the initial recognition of the liability or in a different one, the equity component is netted by debiting it in the subaccount “3210 05 0201 Tax” with a credit to the account of the item (characteristic) “2221 Taxes” corresponding to the tax amount constituted by the initial recognition of the equity component.

Subsequently, it is credited for the amount corresponding to the reversal of the financial effect of the discount that accumulates in the instrument so that at the end of the contract, the book value reflects the contractual amount, value subject to the conversion option.

It is debited at the end of the debt term with a credit to Availability accounts, in case the lender does not exercise the option and instead requires recovery in cash; or with a credit to the account “3110 01 Subscribed Capital”, in case the option is exercised.

Item
(characteristic)
2117 LOANS AGREED FOR MORE THAN ONE YEAR TERM
The accounts of this item (characteristic) must represent the value of obligations contracted by loans obtained for more than one year term, to be placed in active operations. The denominations of the accounts from 2117 01 to 2117 09 will be similar to the accounts of item (characteristic) 2116.

Account 2117 10 DEBTORS FOR LEASES
This account will be increased by crediting it with amounts representing liabilities assumed in the concept of operational or financial leases entered into.

Upon initial recognition, this account will be affected by the present value of leases that have not been paid on the lease commencement date.

Subsequently, the lease liability shall be measured as indicated by the corresponding technical standard.

Item
(characteristic)
2118 LOANS AGREED FOR FIVE OR MORE YEARS TERM
The accounts of this item (characteristic) must represent the value of obligations contracted by loans agreed for five or more years term to be placed in active operations.

Account 2118 08 DEBTORS TO FOREIGN ENTITIES
This account must represent the value of obligations contracted with foreign entities, for loans obtained for more than five years term, to be placed in active operations.

Account 2118 09 OTHER LOANS
This account must represent the value of other obligations contracted by the entity with entities that are not included in the previous classification. (3)

Account 2118 10 DEBTORS FOR LEASES
This account will be increased by crediting it with amounts representing liabilities assumed in the concept of financial leases entered into for five or more years term.

Upon initial recognition, this account will be affected by the present value of leases that have not been paid on the lease commencement date.

Subsequently, the lease liability shall be measured as indicated by the corresponding international accounting standard.

Item
(characteristic)
2119 SUBORDINATED LOANS
Account 2119 01 SUBORDINATED DEBT FOR FIVE OR MORE YEARS In this item (characteristic), all obligations acquired from counterparties that meet the conditions established by the corresponding legal or regulatory framework must be recognized, that is, what is established in Article 42 of the Banks Law, Article 26 of the Cooperative Banks and Savings and Credit Societies Law.

It will be initially credited for the amount of the benefit received minus the direct transactional costs incurred for the contracting, with a debit to Availability accounts.

Subsequently, they are measured at their amortized cost; that is, principal plus accumulated financial interest minus payments made (capital and interest according to legal installments).

Item 212 OWN-ISSUED SECURITIES (2)
Item
(characteristic)
2120 OWN-ISSUED SECURITIES
This item (characteristic) must represent the value of obligations issued by the entity, with the object of attracting resources for financial intermediation.

For the case of banking entities, it must comply with what is established in Article 53 of the Banks Law.

They are credited, initially, at their fair value, which is equal to the amount of the debt issued and placed minus the direct transactional costs incurred in the issuance thereof.

Subsequently, they are measured in accordance with the corresponding technical regulations.

The balance of the item (characteristic) will be integrated into the following accounts:

Account 2120 01 AGREED UP TO ONE YEAR TERM
Account 2120 02
CONVERTIBLE BONDS INTO SHARES AGREED
UP TO ONE YEAR TERM
Account 2120 03
AGREED FOR MORE THAN ONE YEAR AND LESS THAN FIVE YEARS TERM Account 2120 04 AGREED FOR FIVE OR MORE YEARS TERM Account 2120 05 CONVERTIBLE BONDS INTO SHARES AGREED FOR MORE THAN ONE YEAR TERM

For the case of banking entities, these accounts called convertible bonds into shares, must represent obligations by bonds issued, as established in Article 43 of the Banks Law.

In the accounts called Convertible Bonds into Shares, instruments acquired or issued by the entity are represented, which incorporate the option of convertibility into shares as agreed by the contracting parties, in accordance with what is established in the corresponding regulations or legislation.

In these operations, the entity may incur the following obligations:
a) Deliver an amount of cash equivalent to the debt amount plus contractual interest, in the case that the holder of the composite instrument does not exercise the option and provided that the entity is regularized with prior authorization from the Superintendence; b) Deliver a fixed number of ordinary shares, upon maturity of the composite instrument in exchange for the liability related to the principal, in case the holder of the instrument exercises the convertibility option.

The entity's contractual obligation to make future payments will remain in force until its extinction by conversion, maturity of the instrument, or some other transaction.

The entity must recognize the financial liability and the equity component that originates from the convertible instrument on the date it contractually commits to comply with the terms established in the operation (it will be understood that the commitment has been acquired once the instruments are ready for circulation in the market), whether they have been negotiated with third parties and the monetary resources originated from the operation have been made available to the issuer of the convertible debt.

Account 2120 06
OTHER OWN ISSUANCES AGREED UP TO ONE
YEAR TERM (5)
Account 2120 07
OTHER OWN ISSUANCES AGREED FOR MORE THAN
ONE YEAR AND LESS THAN FIVE YEARS TERM (5)
Account 2120 08
OTHER OWN ISSUANCES AGREED FOR FIVE OR
MORE YEARS TERM (5)

These accounts must represent the value of other own debt issuances carried out by the entity that are not securities, with the object of attracting resources for financial intermediation. (5)

For the purposes of this Accounting Manual, other debt issuances include those debt tokens defined as digital assets that represent a financial obligation for the entity issuing them, towards investors; these must be placed through a public debt offering. This is within the framework of what is established in the Digital Assets Issuance Law. (5)

Accrued interest will be recorded in the subaccount “7110 04 0300 Interest on own issuances”. (5)

Item 213 DEMAND OBLIGATIONS
Item
(characteristic)
2130 DEMAND OBLIGATIONS
Account 2130 01 OWN CHECKS
This account represents obligations contracted by the entity in the concept of cashier's checks or certified checks issued or others with similar characteristics, for loan disbursements, for fund reserves required by third parties (the account holders) or for requests made by clients.

It will be credited when checks are issued with a debit to Availability, deposit, or credit accounts, whichever corresponds. The liability to be recognized will be equal to the amount ordered by the client or established by the entity, the latter concerning loan disbursement amounts. On this same date, if applicable, income will be affected by the amount of commissions generated by the service provision with a credit to the account “6210 04 Commissions for other services”.

It will be debited for the cancellation of operations that originated the provision with a credit to Availability, deposits, or other accounts, whichever corresponds.

Account 2130 02 OBLIGATIONS FOR CREDIT CARDS
This account must represent the values that the entity owes to establishments affiliated with the credit card system.

Account 2130 03 COLLECTIONS ON BEHALF OF OTHERS In this account, all amounts corresponding to collections made by the entity on behalf of third parties will be noted with a credit. This account will be debited on the date the entity reimburses the amounts corresponding to their holders.

In case this operation generates commissions, they will be recognized in the subaccount “6210 04 1000 Collections on behalf of others”.

Account 2130 04 CORRESPONDENCIES
In this account, all amounts corresponding to sales of traveler's checks (checks that the banking entity has received on consignment) made to third-party users and on behalf of other entities (the issuers of such instruments and which cede them to the banking entity on consignment) will be noted with a credit.

This account will be debited on the date the entity reimburses the amounts corresponding to the holder entities. In case this operation generates commissions, they will be recognized in the subaccount “6210 04 1100 Correspondencies”.

Account 2130 05 FUND TRANSFERS
This account represents obligations contracted by the entity, with third parties, to transfer resources to beneficiaries designated by the contractor; as well as for funds received to be transferred.

It is debited when the obligation is settled with a credit to Availability or other accounts if required. In case this operation generates commissions, they will be recognized in the subaccount “6210 04 1200 Fund transfers”.

Account 2130 06 CHECKS AND OTHER VALUES FOR APPLICATION Subaccount 2130 06 0000 Clearing House

This subaccount is credited for checks received for collection and debited until compensation has been effected for the following concepts:
a) To apply to the corresponding operations; b) For returns to their drawers of rejected checks.

The entity must have a record that identifies at all times the checks that form the balance of this account and the deposit or active operation to which it was applied. (3)

Subaccount
2130 06 0001/
2130 06 0002
Documents Remitted to Foreign Banks – ML/
Documents Remitted to Foreign Banks – ME
This Account is credited with documents received for collection, in the process of confirmation by foreign banks, and debited until a response has been received from the foreign bank, for the following concepts:
a) To apply to the corresponding operations; and b) For returns of documents to whom it may concern.

Classification 22 OTHER LIABILITIES
Item 221 BALANCES BETWEEN COMPANIES (1)
Item
(characteristic) 2210 BALANCES BETWEEN COMPANIES (1) Account 2210 00 BALANCES BETWEEN COMPANIES (1) This item aggregates amounts owed between group entities (intragroup operations) which are generally part of the generation of synergy within the group, factors that facilitate or reduce operational costs by acting reciprocally in the receipt and settlement of transactions that are part of their daily activity and are pending settlement. (1)

It is credited for amounts in favor of other intra-group entities and over which there is an obligation to settle them gross or net in case there are offsettable accounts in the item “121 Balances between companies” in the assets generated between them and for which there is an agreement for net settlement. It is debited when the assumed obligations are settled with a credit to availability accounts. (1)

This item must represent pending settlement balances between the different agencies, branches, and affiliates of the entity, both national and foreign, or foreign banks; by their transient nature, balances with national agencies at the end of each month must be equal to zero. (1)

Account 2210 01 REPEALED (1)

Rubric 222 ACCOUNTS PAYABLE
Rubric
(characteristic) 2220 ACCOUNTS PAYABLE
The accounts in this rubric must represent the obligations for the concepts that describe each of the accounts and subaccounts.

Account 2220 02 DIVIDENDS AND PARTICIPATIONS
This account must represent the dividends agreed upon in favor of shareholders and the employee participation in profits. Dividends and participations must be recorded with the date on which their distribution is approved by the General Shareholders' Meeting. It is debited when the amounts are settled with shareholders with a credit to the accounts used for amortization.

Account 2220 06 COMMISSIONS
This account is initially credited with the amount of commissions incurred for the negotiation of transactions that involved the recognition of economic consideration to receive the contracted service, with a debit to the corresponding accounts of the rubric (characteristic) "7110 Financial Liability Costs" or "7210 Commissions for other services" or other accounts that apply according to the requirement of the transaction carried out. It is debited when the obligation is settled with a credit to the corresponding asset accounts.

Subaccounts 2220 06 05 01/
2220 06 05 02
For acquisition-ML/
For acquisition-ME
These subaccounts are credited for the amount of promissory notes (vouchers) received by the acquiring entity and that have been sent by the affiliated businesses in concept of the sales made with credit cards. It is debited for the amount of the promissory notes when the acquiring entity sends the payment to the affiliated businesses net of acquisition commissions, which will be recorded in the account "6210 04 0600 Commissions for acquisition".

Subaccounts 2220 06 06 01/
2220 06 06 02
For exchange-ML/
For exchange-ME
These subaccounts are credited with the amounts (vouchers) that the acquiring entity (which is at the same time the same entity issuing the card) has received from the affiliated business with a debit to the corresponding credit accounts. The account is debited when the entity sends the payment to the affiliated business net of the acquisition commission, which is credited in the account "6210 04 0600 Commissions for acquisition". When the acquiring entity and the issuing entity are different, this subaccount is credited for the amounts of the promissory notes (vouchers) that the issuing entity has received from the acquiring entity in concept of purchases by its cardholders with a debit to the corresponding credit accounts. It is debited when the issuer sends the payment to the acquiring business net of the exchange commission, which will be recorded in the account "6210 04 0700 Exchange Commissions".

Account 2220 08 ASSET MANAGEMENT
This account will be increased by crediting it with the amounts recovered on behalf of third parties and that represent obligations to reimburse clients whose assets are under the administration of the entity. It is debited when the entity reimburses the amounts owed with a credit to cash or deposit accounts, whichever corresponds according to the means used for settlement. Generally, settlements will be applied net of the commissions generated by the administration of such assets, if the administration contract so establishes.

Account 2220 09 COLLECTORS
This account will be increased by crediting it with the amounts corresponding to payments that the entity has received on behalf of third parties (for example: receipts for telephone, water, electricity, cable, internet, taxes, etc. services). It will be debited when the recovered amounts are settled with a credit to the accounts used for amortization.

Account 2220 10 ADVANCES FOR HOUSING RESERVATION This account will be affected with the amounts corresponding to advances that the entity has received in concept of housing reservations on projects financed by the same entity.

Account 2220 15 PURCHASES OF FINANCIAL INSTRUMENTS (1) In this account, the outstanding balances to be paid for the purchases of investment financial instruments on the negotiation date are recorded with a debit to the accounts of the rubric "113 Investment Financial Instruments". (1) Its balance will be debited on the settlement date with a credit to the accounts of the rubric "111 Liquidity". (1) (2)

Subaccount 2220 99 0201 Fiscal Debt - VAT
This account will be increased by crediting it for the amounts charged in concept of VAT in transactions for the provision of services or sale of goods subject to the application of the VAT Law. It will be debited by settling it against the accounts "125 0 99 0301 Fiscal VAT Credit"; if there is a difference in the settlement, it will be debited against the sub-subaccount of VAT to be paid. In the event that credits are greater than fiscal debts, the difference will be transferred to the sub-subaccount of the subaccount "1250 99 0301 Fiscal VAT Credit".

Rubric
(characteristic)
2221 TAXES

Account 2221 01 CURRENT INCOME TAX
The current tax corresponding to the present period and previous periods must be recognized as a payment obligation to the extent that it has not been settled.
Its operation is as follows:

Subaccount 2221 01 Advance Payment
It is credited, initially, for the obligation of the advance payment, with a debit to the subaccount "1251 01 0101 Advance Payment". It is debited on the date the entity sends the payment to the corresponding fiscal authorities.

Subaccount 2221 01 02 01 Income Tax on the Exercise's Profits It is credited, initially and subsequently, at the end of each monthly period, for the amount of tax calculated based on the expenses and income of each monthly closing with a debit to the subaccount "8150 01 0100 Current Income Tax". The amount of this account constituted throughout the accounting year is reversed with a debit at the end of the accounting period, crediting the subaccount "8150 01 0100 Current Income Tax". This is indicated in the event that the entity wants to recalculate its total fiscal obligations at the end of the period starting from zero.

At the end of the accounting period, it is credited for the definitive amount established in concept of income tax (the amount recognized in this account is the computed amount applying the tax rate on fiscal profits) with a debit to the subaccount "8150 01 0100 Current Income Tax". This account is subsequently debited with a credit to the subaccounts "1251 01 0101 Advance Payment" and "1251 01 0201 Withheld Tax". The remaining credit balance from this netting will represent the income tax pending payment, which will be settled with a credit to Liquidity accounts or another corresponding account. In the event that the remaining balance after netting is a debit, such amount will be transferred with a debit to the subaccount "1251 01 0301 Remainder of income taxes".

Account 2221 02 DEFERRED INCOME TAX
It will be credited, initially, for the amount of deferred taxes computed, applying the current tax rates, on the taxable temporary differences that on the date they are constituted increase fiscal expenses, consequently reducing the tax to be paid; and whose future reversal will increase fiscal income, consequently increasing the taxes to be paid, with a debit to the subaccount "8150 02 0100 Constitution of taxable temporary differences (Debit Balance)". It will be debited in the following cases:
a) When the taxable temporary differences constituted in previous periods or in the current exercise are reversed, with a credit to the subaccount "8150 05 0100 Reversal of taxable temporary differences (Credit Balance)"; or b) In subsequent reviews, generally at the closing of the accounting year, when management makes the corresponding adjustments based on the temporary differences registered in previous periods and those established in the current period, if the result implies a downward adjustment. It must be kept in mind that on some occasions deferred tax assets or deferred tax liabilities for temporary differences will affect equity accounts instead of income statement accounts; in such a case, the equity account will be registered net of the corresponding asset or liability for tax; example: revaluations of property, plant and equipment, fluctuations in the value of financial assets with changes in other comprehensive income, exchange differences established in the consolidation of businesses abroad, etc. Such deferred tax asset or liability

will be reversed gradually as the asset or liability that affected equity is realized or removed from the balance sheet.
The criteria that gave rise to the registration of these assets must be evaluated at least on each annual closing date.

Rubric
(characteristic) 2222 DEROGATED (1)
Account 2222 00 DEROGATED (1)
Derogated (1)
Subaccount 2222 00 100 DEROGATED (1)
Derogated (1)
Rubric (1) 223 WITHHOLDINGS AND EMPLOYER CONTRIBUTIONS (1) Rubric (characteristic) (1) 2230 WITHHOLDINGS AND EMPLOYER CONTRIBUTIONS Account (1) 2230 00 WITHHOLDINGS The accounts in this rubric must represent the value of the withholdings made to the institution's personnel and third parties, for the different concepts described in the account and subaccount. (1) This account is increased by crediting it with the amounts corresponding to all withholdings by Law or other cause that the entity has made in the tax period. It is debited when the obligations are settled with the corresponding holders. (1)

Account 2230 02 EMPLOYER CONTRIBUTIONS (1)
It represents the liability assumed by the entity in concept of statutory contributions that it must provide and that at the end of the monthly period are provisioned to be settled in the next monthly period. It is credited with a debit to the account "8110 02 Staff Benefits". (1)

Rubric 224 OTHER LIABILITIES
This rubric includes items with a variety of elements that, independently, are generally not so relevant or that if they are, it is not considered necessary to open a grouping just for them. (2)

Rubric
(characteristic)
2240 PROVISIONS
The accounts in this rubric (characteristic) represent obligations registered by the entity in concept of future obligations; which are based on legal regulations, on the entity's internal policies or on specific requirements made by the corresponding technical accounting standard.

Account 2240 01 LABOR PROVISIONS
This account must represent the value of the different labor obligations assumed for some or all of the following concepts: Estimation of dismissal indemnification, voluntary retirements, other benefits related to the termination of the labor relationship, etc., which are either contemplated in the legal framework governing labor obligations or are an implicit assumption due to the entity's historical behavior regarding them. It will be credited for the estimated amount of the assumed obligation with a debit to the account "8110 02 Staff Benefits". It will be debited when the provision is applied, by its payment, with a credit to Liquidity accounts, or by its recognition in accounts payable.

Account 2240 02 PROVISIONS FOR CONTINGENCIES
This account will represent the loss estimates for contingencies, according to the best estimate applied by the entity, in relation to, among others, lawsuits filed against the entity and for whose negative resolution, the entity considers it probable (more likely to occur than not) an outflow of economic resources. It is credited for the estimate made with a debit to the subaccounts of the rubric (characteristic) "8140 Provisions". It will be debited when the provision is applied, by its payment, with a credit to Liquidity accounts, or by its recognition in accounts payable.

Account 2240 03 EDUCATION FUND
This account must represent the value of the cooperative education reserves of members that according to article 172 of the Law of Cooperative Banks and Savings and Credit Societies must be transferred to a provision account.

Account 2240 04 ONEROUS CONTRACTS
An onerous contract is one in which the inevitable costs of fulfilling the committed obligations are greater than the benefits expected to be received from it.
If the entity has an onerous contract, the final debt that derives from it must be recognized and measured as a provision.
The accounting application of this account is analogous to the account "2240 02 Provisions for Contingencies", always being careful to apply the corresponding subaccounts, if such are different.

Account 2240 05 RESTRUCTURING COSTS
Restructuring is a program of action, planned and controlled by the entity's management, whose effect is a significant change in the scope of the activity carried out by the entity; or the manner in which such activity is carried out. The accounting application of this account is analogous to the account "2240 02 Provisions for Contingencies".

Account 2240 06 OBLIGATIONS FROM FINANCIAL GUARANTEE CONTRACTS A financial guarantee contract is one that requires its issuer to make specified payments or reimbursements to its holder for a loss incurred due to defaults, by a specified debtor, of mandatory payments according to the original or modified terms of a debt instrument. The accounting of these contracts does not depend on their legal form. Financial guarantee contracts granted by the entity will be registered in this rubric. A contract of this nature is credited, initially, for the fair value of the instrument which will generally be the amount of the commission or premium received by the issuer with a debit to Liquidity accounts or accounts receivable. It is also credited for the recognized increase in the obligation according to the evaluation carried out with a debit to the subaccounts of the account "7112 03 Constitution of loss estimates for guarantees, bonds and others", as applicable. (1)

These obligations are debited for the accrual of the commission received for the guarantee contract, which will be recognized on a straight-line basis throughout the validity of the contract, with a credit to the subaccounts of the account "6210 03 Guarantees and Bonds". It is debited in the event that the entity honors the contract to the beneficiary of this, with a credit to Liquidity. On this same date, the entity constitutes a loan overdue with a credit to the subaccounts of the rubric (characteristic) "1149 Provision for uncollectibility of loans", whichever corresponds. This application will proceed whenever the established in the corresponding regulatory framework is met.

Account 2240 07 LOAN GRANTING COMMITMENTS
The balance of this account represents the commitments to grant loans at an interest rate lower than the market rate.
It will be recognized initially at its fair value plus the transaction costs that are directly attributable to the generation of the liability.
Its subsequent valuation will be in accordance with the applicable technical accounting regulations.

Account 2240 08 CONSIDERATION CONTINGENT ORIGINATED BY BUSINESS COMBINATIONS The balance of this account represents an obligation of the acquiring entity to transfer additional assets or equity interests to the previous owners of an acquired entity as part of an exchange for control of it if certain future events occur or certain conditions are met. Its initial and subsequent recognition will be applied by the entity in accordance with the applicable technical accounting regulations.

Account 2240 09 LOYALTY PROGRAMS
This account will be affected with the fair value of the points for loyalty programs, which the entity grants to its clients, with a debit to the subaccount of the rubric (characteristic) "8140 Provisions" which corresponds. It is debited when the client redeems the loyalty points against the corresponding account.

Account 2240 10 DEMOLITION COSTS

This account will be affected with the registration of the estimated costs for the costs that originate in rented buildings, with a debit to the subaccount of the rubric (characteristic) "8140 Provisions" that corresponds.

Account 2240 99 OTHER PROVISIONS
This account will be affected by any other provision that meets the conditions for its recognition and that is not one of those cited above.

Rubric
(characteristic)
2241 LIABILITIES ASSOCIATED WITH ASSETS (1)
The liabilities recognized in this rubric will be those associated with a group of long-term assets that have been disposed of for sale, so their measurement will be determined by their fair value. The liabilities classified in this rubric will be those resulting from applying the criteria defined in the rubric "127 Assets held for sale". (1)

Account (1) 2241 01 LIABILITIES ASSOCIATED WITH ASSETS HELD FOR SALE (1) It is credited, initially, for the fair value of the liabilities associated with the set of long-term assets held for sale. It is debited when the long-term assets to which they are associated are sold with a debit to cash and cash equivalents accounts or others if applicable. (1) It is also credited if the liability accrues interest with a debit to the corresponding expense accounts. (1)

Account 2241 02 LIABILITIES ASSOCIATED WITH FINANCIAL ASSETS WITH CONTINUED INVOLVEMENT (1) This account represents the liabilities assumed by the entity in the transfer of financial assets in which the entity maintains a continued involvement in them, based on the accounting policies derived from the corresponding technical standard. (1)

Account 2241 04 DEROGATED (1)
Derogated (1)

Account 2241 05 DEROGATED (1)

Derogated (1)

Account 2241 06 DEROGATED (1)
Derogated (1)

Rubric
(characteristic) (1) 2242 (1) SHARE-BASED PAYMENTS (1) Account (1) 2242 01 (1) SHARE-BASED PAYMENTS (1) Share plans and share option plans are a usual feature of the remuneration of key employees of an entity. (1) Share-based payment transactions, when agreed between the entity and its counterparties, must be limited to those transactions whose agreements are settled in cash. The fair value of these transactions will be established on each balance sheet date, as established by the corresponding technical accounting standard. (1) This account will be credited for the fair value of the assumed liability, at the moment the good or service is received (not when the contract is signed), with a debit to the corresponding asset account, for the asset or service received. (1) In the event that the item does not qualify as an asset, the account "8110 07 Share-based payments" will be debited, in the event that it is a benefit received from officials or employees or another expense account, whichever corresponds, in the event that it is a service received from third parties. (1) It will be credited on each balance sheet date, until its settlement, for the increase in the fair value of the assumed liability, applying the same process cited above. (1) It is debited on the date of exercise or cancellation of the option with a credit to the corresponding Liquidity account. (1)

Account 2242 02 DEROGATED (1)
Derogated (1)

Rubric
(characteristic) 2243 DEROGATED (1)

Account 2243 01 REPEALED (1)
Repealed (1)
Item
(characteristic) 2244 REPEALED (1)
Repealed (1)
Item 225 DEFERRED LIABILITIES (1)
Item
(characteristic) 2250 DEFERRED LIABILITIES (1) These accounts in this item present operations that in the future will allow the recognition of income; operations that have already generated income, but the recognition of such income has been deferred because it was generated on a transaction financed by the entity itself. (1) Interest that has been capitalized, reactivated, or paid with credits granted by the same entity. (1) Account 2250 04 UNRECOGNIZED INCOME RECEIVED (1) This account must represent the value of income received that has not yet been recognized. Its amortization must be made as recognition occurs. (1) All provisions or cash collections made in the concept of commissions for the granting, administration, or other income different from interest, related to loans, are recorded in this account, which are taken to results applying the regulatory framework established; the recognized amounts are credited to the account “6110 01 Loan Portfolio”. And any other concepts that at the date they are received do not meet the condition of being income. (1) The account must be segregated into short-term, medium-term, and long-term loans. Short-term loans are considered those up to one year; medium-term loans, from more than one year to five years; and long-term loans, from more than five years. (1) If the sale of an asset is with financing and its value is greater than the gross book value of the asset, the difference must be recorded in this account. (1)

In sub-account “2250 04 0200 Sales with POS points (POS)”, commissions for deferred income will be recorded, which will be recognized as recognized as the entity honors loyalty points. (1) Account 2250 05 SUBSIDIES (1) In this account, transfers of resources subject to future or past fulfillment of certain conditions imposed by the grantor of the subsidy must be recorded. (1) For the applications made in this account, the respective international accounting standard must be consulted. (1) Account 2250 06 DEBT FOR PROVIDING ELECTRONIC MONEY (1) The balance of this account must represent the debts that the entity has with its clients for having received money to provide electronic money. (1)
SECTION III
ACCOUNTING APPLICATIONS MANUAL OF EQUITY
Element 3 EQUITY
Classification 31 EQUITY
In this classification, all those items that meet the definition of equity will be recognized, which is established as the residual participation in the assets of the entity after deducting all its liabilities. Equity can be subdivided among other things into funds contributed by shareholders (in a stock entity), undistributed earnings, specific reserves derived from earnings, and reserves for capital maintenance adjustments. Item 311 SHARE CAPITAL Item (characteristic) 3110 SUBSCRIBED SHARE CAPITAL This item (characteristic) registers the total of shares subscribed for the constitution of the share capital with which the entity is founded or by the contributions and advance contributions of shareholders from the results of operations and from other events or circumstances that affect the institution. It is credited for the subscribed capital and for successive increases, with debit to the corresponding Availability accounts in the case of cash contributions or to

the account “3110 02 Capital subscribed but not paid”, for the amount that is subject to payment based on calls for payment by the competent body.
Account 3110 01 SUBSCRIBED CAPITAL
This account represents paid subscribed shares. It is credited with the subscription of shares.
Account 3110 02 SUBSCRIBED CAPITAL NOT PAID
This account will be initially debited with the amounts corresponding to subscription of share capital not paid and subsequently credited with the amortized calls that are made based on the articles of incorporation of the entity or other legal character that apply, and equally it is credited with the payments of the same. Cooperative Banks and any others whose equity composition is equal to these, must perform the analysis to establish if the conditions established in the applicable IFRS are met for the amounts recorded in this sub-account to be classified as equity at the level of separate financial statements. It must be noted that liability instruments that meet the conditions of the cited paragraphs are classified as equity as an exception; this exception does not reach consolidated financial statements, so in them those amounts are presented as liabilities. Account 3110 03 STATE CONTRIBUTIONS This account represents the state's equity contributions in public institutions that operate as banks, which generally are not supported by share certificates, and that are delivered by the State to public entities such as banks constituted with state capital. Account 3110 04 ASSIGNED CAPITAL This account represents equity contributions, which generally are not supported by share certificates and that are delivered by foreign parent companies to their subsidiaries located in the country or by member partners or associates or any other name by which participants in the equity of entities that act as savings and credit societies or as cooperative banks or other similar ones that are enabled by the relevant legal framework are identified.

Item
(characteristic) 3111 VARIABLE SHARE CAPITAL
This item (characteristic) must register the shares subscribed by the shareholders of cooperative banks for variable capital.
Account 3111 01 SUBSCRIBED CAPITAL PAID
Sub-account 3111 02 SUBSCRIBED CAPITAL NOT PAID The account “3111 01 Subscribed capital paid” represents the shares subscribed by shareholders for variable capital.
The account “3111 02 Subscribed capital not paid” represents in the debit the shares subscribed but not yet paid by subscribing shareholders. It is debited with the subscription of shares and credited with their payment. Item (characteristic) 3120 CAPITAL CONTRIBUTIONS PENDING TO FORMALIZE Account 3120 00 CAPITAL CONTRIBUTIONS PENDING TO FORMALIZE Sub-account 3120 00 0200 Capital financed by the entity This account will be used to temporarily register the resources that shareholders or contributors make to the entity, coming from financing made by the entity itself, in accordance with literal b) of article 125 of the Cooperative Banks and Savings and Credit Societies Law. This account will be debited with credit to account 3110 01 “Subscribed Capital”, as the loan that gave rise to the subscription of shares or contributions is amortized. The items and accounts mentioned above apply only to Cooperative Banks, Savings and Credit Societies, and Financial Federations regulated by the corresponding Law. (1) Item 313 CAPITAL RESERVES Item (characteristic) 3130 CAPITAL RESERVES Account 3130 01 RESERVES

This item must represent the value of capital reserves, according to the corresponding classification, and have been allocated to reserves in compliance with legal, statutory, or other provisions, as well as by the will of the shareholders. Regarding sub-account 3130 01 0100 Legal Reserve, its accounting must be made at the end of the fiscal year. Capital reserves are originated as an appropriation of the earnings of the fiscal year, and their constitution has a specific purpose, by legal mandate, by internal entity policies or statutes. They are credited with the amount designated annually in the concept of the specific reserve with debit to accounts of the item “314 Results to apply”, whichever corresponds. Sub-account 3130 01 97 00 Other capital reserves In this account, other reserves constituted by the entity or originated from events other than those that contribute to the formation of capital reserves will be credited. Such as reserves constituted by premiums on shares. Item 314 RESULTS TO APPLY Item (characteristic) 3140 RESULTS TO APPLY Account 3140 01 RESULTS OF PREVIOUS YEARS Account 3140 02 RESULTS OF THE CURRENT FISCAL YEAR This item must represent the accumulated results generated in previous years, and the net result of the current fiscal year that have not been distributed or applied to another purpose. If there is an accumulated surplus balance and losses are recorded in another fiscal year or vice versa, they must be presented separately, without any compensation, unless the institution's shareholders decide to absorb the losses with accumulated earnings. The balance of the account “Results of the Current Fiscal Year” must be transferred to “Results of Previous Years” at the start of a new year. These accounts are credited (debited) with the amounts representing earnings (losses) generated in previous periods or in the current fiscal year for which Management has not yet taken decisions on their final destination. They are credited (debited) with the net results obtained at the end of each accounting period with debit (credit) to the result accounts, on the date those cited accounts are liquidated.

Item 315 PREMIUMS ON SHARES
Item
(characteristic) 3150 PREMIUMS ON SHARES
Account 3150 01 PREMIUMS ON SHARES
In this account, amounts received or delivered in excess of fair value in the sale or purchase, issuance, or cancellation of the entity's own shares are recognized.
It is credited with the amounts received in excess of fair value by the sale or issuance of the entity's own shares with debit to the relevant availability accounts.
It is debited with the amounts delivered in excess of fair value by the purchase or cancellation of the entity's own shares with credit to the relevant availability accounts.
Classification 32 RESTRICTED EQUITY
Item 321 UNDISTRIBUTABLE EARNINGS
Item
(characteristic) 3210 UNDISTRIBUTABLE EARNINGS This item (characteristic) is integrated by items that are subject to some type of restriction.
Account 3210 01 UNRECOGNIZED INCOME
This account must represent the value of earnings from unrecognized income, as established in article 21 of the Cooperative Banks and Savings and Credit Societies Law and in article 40 of the Banks Law; consequently, this balance must be equal to recognized and unrecognized income. The balance of this account can be constituted with earnings from the last fiscal year or from previous years, if necessary. This account is credited with the amounts corresponding to financial products receivable at the end of the accounting period that have affected results but have not yet been recovered in cash, gains from sales of assets made with financing, and any other gain that has been recognized over the current period or in previous periods but that at the date of the financial statements are not considered realized, that is, have not been recovered in cash by that date with debit to the accounts of the item “314 Results to apply”, whichever corresponds.

It is debited as the recognized income of the previous period is recovered in cash, over the accounting period or at the end of it; in this last case, by settling the amounts transferred to this account at the end of the previous period and constituting the new amounts for the balances pending recovery at the end of the closing fiscal year. Account 3210 02 COUNTRY RISK RESERVES In this account, provisions must be recorded for country risk, according to provisions issued by the Central Bank of Reserve through its Committee on Standards and voluntary ones when the corresponding risk is not identified. It is credited with the reclassified amounts with charges to the item “314 Results to apply”, in the concept of restriction originated by resources maintained or committed in some foreign country, for potential impediments to obtain their recovery derived from adverse effects in the economic, social, political environment or by natural disasters that occur in the country where the source that generates the fund flows of the counterparty is located; and which, according to the country's risk classification, are subject to the constitution of restrictive reserves whose purpose is to maintain appropriate solvency levels capable of supporting any financial risk in the cited investments. Account 3210 03 EXTRAORDINARY ASSETS RESERVES In this account, reserves constituted for extraordinary assets must be represented, as established in the respective legal frameworks. (1) Repealed (1) This account will receive the amounts corresponding to the restriction of results to apply in the concept of holding extraordinary assets. This restriction is made based on the legal provision that requires the recognition of these assets as a loss for one hundred percent of their value over their holding in books considering the maximum term indicated by the relevant legal framework. At the date of its constitution, it is made with debit to the results to apply recorded in the item “314 Results to apply”. Reserves are released when the entity transfers the asset or is authorized by the Superintendence to keep it. Account 3210 04 RECOVERIES OF WRITTEN-OFF ASSETS This account must represent the value of assets obtained in the concept of

recoveries of assets that were written off in previous fiscal years.
It is debited when the written-off assets that gave rise to it are realized (sold) with credit to results to apply.
In this account, reclassifications of results to apply to this account are recognized, in the concept of income recognized for recoveries of extraordinary assets in kind.
It will be released when the asset is sold in cash or when the asset deteriorates for the amounts exceeding its fair value.
Account 3210 05 EQUITY COMPONENTS ON CONVERTIBLE DEBT The amounts recognized in this account are those originated from the separation of the equity component of the entire instrument that incorporates a financial debt instrument and another conversion option into equity. The equity component is determined by difference between the entire value of the convertible instrument and the amount determined as fair value of the liability component. It is credited with the amount determined as net equity component of taxes with debit to the relevant availability accounts. Account 3210 97 OTHERS In this account, details of items that pass through other comprehensive income but are not within the detailed items and consequently require the incorporation of new concepts, which can be disaggregated at the sub-account level, can be added. Item 322 DONATIONS Item (characteristic) 3220 DONATIONS In this item (characteristic), amounts of items received by the entity in the concept of donation are recognized. It is credited on the date the entity acquires control over the item received in the concept of donation, registering it at its fair value with debit to the corresponding asset items. The value of these, when it comes to goods, must be determined by an independent expert of the institution and those registered in the Registry of Appraisers. The entry for this account will be preceded by the registration of the corresponding asset

Item 323 OTHER COMPREHENSIVE INCOME
Item (characteristic) 3230 OTHER COMPREHENSIVE INCOME OF PREVIOUS YEARS This item (characteristic) will receive with credit or debit, depending on the nature of the movement or item at the moment of its recognition, with all those amounts that represent gains or losses on items whose valuation requires that gains or losses on them be recognized within equity. It will include the accumulated amounts, net of the tax effect, of the adjustments made to assets and liabilities whose value changes are recorded, according to the standards of this title, in other comprehensive income. The balance of the item will present the amounts that have been accumulated at the end of the fiscal year from previous years and reclassified from the item (characteristic) “3231 Other comprehensive income of the current fiscal year”, in each of the items that integrate this account, whether elements that will not be reclassified into results or elements that will be reclassified into results. Consequently, these amounts will be accumulated from the current fiscal year and previous years while the items that gave rise to them remain within the balance sheet. Account 3230 01 ELEMENTS THAT WILL NOT BE RECLASSIFIED INTO RESULTS In this account, the amounts that have been accumulated over the fiscal year at the end of it will be registered; its balance includes the accumulated amounts of the current fiscal year and of previous years while the items that gave rise to them remain within the balance sheet and that in accordance with the financial information standard are not considered reclassification adjustments. Sub-account 3230 01 Surplus by revaluation This sub-account will be increased by crediting it with the amounts of value revaluations made on the entity's real estate assets or other class of assets subject to value revaluation. It will be debited when the established revaluation amounts are negative (amounts lower than those established previously) with credit to the value of the affected asset (or to the asset value correction account, if applicable). On this same date, the tax amount established in this account will be corrected.

Sub-account 3230 01 02 01 Changes in fair value FVRCR attributable to changes in credit risk It will include accumulated losses and gains recognized in other comprehensive income as a consequence of the credit risk inherent in liabilities measured at fair value with changes in results, provided that doing so does not imply the origin or expansion of a accounting asymmetry, a condition that, if considered as the cause to take to the period's results the gains or losses on the commented risk, must be documented. Sub-account 3230 01 03 01 Changes in the FV of the VT of an option of a covered item related to a transaction This sub-account will be affected when the covered item gives rise to the recognition of a non-financial asset or non-financial liability or a firm commitment for a non-financial asset or a non-financial liability for which fair value hedge accounting is applied and in which the time value component has not been included as part of the hedging item. Sub-account 3230 01 04 01 Changes in the FV of the forward element of forward contracts of a covered item related to a transaction This sub-account will be affected when the covered item gives rise to the recognition of a non-financial asset or non-financial liability or a firm commitment for a non-financial asset or a non-financial liability for which fair value hedge accounting is applied and in which the forward element has not been included as part of the hedging item. Sub-account 3230 01 05 01 Actuarial Gain (Loss) on post-employment benefits (2) It will include actuarial losses and gains recognized in other comprehensive income as a consequence of new measurements or updates of net defined benefits recognized in other comprehensive income. These new updates of the aforementioned post-employment benefits granted to employees cannot be reclassified to period results in subsequent fiscal years. (2) Account 3230 02 ELEMENTS THAT WILL BE RECLASSIFIED INTO RESULTS In this account, the amounts that have been accumulated over the fiscal year at the end of it will be registered; its balance includes the accumulated amounts of the current fiscal year and

Alameda Juan Pablo II, entre 15 y 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-11/2022
NCF-01
ACCOUNTING MANUAL FOR DEPOSIT-COLLECTING INSTITUTIONS AND HOLDING COMPANY Approval: 12/30/2022 Validity: 01/16/2023

Subaccount 3230 02 01 01 Foreign Exchange Differences for Foreign Business This subaccount is credited or debited with gains or losses arising from the conversion of foreign businesses (which operate in a currency different from that of the reporting entity) when converting the assets and liabilities of that business to the business currency of the reporting entity (the parent).

Gains or losses from foreign exchange differences recognized in this account will be reclassified to the period's profit or loss when the foreign business is disposed of.

When there is a designation of a net investment hedge, the following shall apply in this account:
a) The portion of the gain or loss on the hedging instrument that is considered an effective hedge shall be recognized in this subaccount; and b) The ineffective portion shall be recognized in the period's profit or loss. The accumulated gain or loss on the hedging instrument related to the effective portion of the hedge that has been accumulated in this subaccount shall be reclassified from equity to the period's profit or loss as a reclassification adjustment at the time of the disposal or partial disposal of the foreign business.

Subaccount 3230 02 02 01 Cash Flow Hedge Reserve This subaccount will be affected by credits or debits corresponding to changes in the fair value of items designated as accounting hedges in a cash flow hedge. Applications made to this item must be net of taxes. The accumulated amount in this subaccount shall be affected as follows:
a) If a hedged forecast transaction subsequently results in the recognition of a non-financial asset or a non-financial liability, or a hedged forecast transaction for a non-financial asset or non-financial liability becomes a firm commitment for which fair value hedge accounting is applied, the entity shall remove that amount from the cash flow hedge reserve and include it directly in the initial cost or other amount of the asset or liability. b) For cash flow hedges other than those covered by a), that amount shall be reclassified from the cash flow hedge reserve to the period's profit or loss as a reclassification adjustment, in the same period or periods during which the hedged future cash flows are expected to affect the period's profit or loss (for example, in the periods when interest income or interest expense is recognized or when a forecast sale occurs).

However, if that amount is a loss and an entity expects that all or part of it will not be recovered in one or more future periods, the amount that is not expected to be recovered shall be reclassified immediately to the period's profit or loss as a reclassification adjustment.

In the case of cash flow hedges, the portion of the gain or loss on the hedging instrument, which derives from the change in the fair value of the hedged item, and which is determined to be an effective hedge, is what will be recognized in this account. The ineffective portion in the hedging instrument shall be recognized in accounts “6310 08 Gains from Ineffective Amounts in Hedging Operations” or “7213 01 Losses from Ineffective Amounts in Hedging Operations”, whichever applies in accordance with the nature of the change in the fair value of the hedged item (for this type of hedge when the change in fair value of the hedged item exceeds that of the hedging item, no ineffective amounts are established; 100% of the change in fair value in the hedging item remains recognized in this account).

Subaccount 3230 02 03 01 Changes in FV of Debt Instruments at FV with Changes in OCI Will record changes in the fair value of financial instruments measured at FVOCI.

Subaccount 3230 02 04 01
Changes in FV of the Time Value of an Option of a Hedged Item Related to a Transaction This subaccount will be affected when the hedged item results in the recognition of a non-financial asset or non-financial liability or a firm commitment for a non-financial asset or non-financial liability for which fair value hedge accounting is applied.

The amounts shall be reclassified to the period's profit or loss when the hedged item does not result in the recognition of a financial asset or non-financial liability, nor a firm commitment for a non-financial asset or non-financial liability for which fair value hedge accounting is applied. Such reclassification is considered a reclassification adjustment in the same period or periods during which the hedged future cash flows are expected to affect the period's profit or loss (for example, when a forecast sale occurs).

Subaccount 3230 02 05 01 Changes in FV of the Time Value of an Option of a Hedged Item Related to a Time Period This subaccount will accumulate changes in the fair value of the time value of an option that covers a hedged item related to a time period and that this change is related to the hedged item; this amount shall be amortized systematically and rationally over the period during which the hedge adjustment for the intrinsic value of the option could affect the period's profit or loss.

Subaccount 3230 02 06 01 Changes in FV of the ETCTPC Related to a Transaction This subaccount will be affected when the hedged item results in the recognition of a non-financial asset or non-financial liability or a firm commitment for a non-financial asset or non-financial liability for which fair value hedge accounting is applied.

Subaccount 3230 02 07 01 Changes in FV of the ETCTPC Related to a Time Period This subaccount will accumulate changes in the fair value of the time value of an option that covers a hedged item related to a time period and that this change is related to the hedged item; this amount shall be amortized systematically and rationally over the period during which the hedge adjustment for the intrinsic value of the option could affect the period's profit or loss.

Subaccount 3230 02 08 01 Expected Credit Losses on Financial Instruments at FVOCI This subaccount will be affected by the applications of the estimation that in accordance with IFRS must be calculated for financial instruments at fair value with changes in other comprehensive income; its balance will decrease by reclassifications to the profit and loss accounts that correspond.

Item
(characteristic) 3231
OTHER COMPREHENSIVE INCOME OF THE CURRENT
PERIOD
This item (characteristic) will record amounts representing gains or losses on items whose valuation requires that gains or losses on them be recognized within equity in other comprehensive income.
The accounts and subaccounts that make up this item (characteristic) will have a denomination similar to those that make up the item (characteristic) “3230 Other Comprehensive Income of Prior Periods”.

SECTION IV
ACCOUNTING APPLICATIONS MANUAL FOR CONTINGENCIES Element 4 CONTINGENT RIGHTS Classification 41 FINANCIAL GUARANTEES ISSUED At the date of constitution or opening of these contracts, their fair values must be recognized in the balance sheet, which are usually, at inception unless evidence to the contrary, the amount of commissions generated by the issuance. In addition, as the liability assumed by the guarantor increases, the entity shall affect expenses (established according to the best estimate), in the subaccount “7111 04 0400 Financial Guarantee Contracts”.

Item 411 LETTERS OF CREDIT
Item (characteristic) 4110 LETTERS OF CREDIT
This item must represent the value of rights for letters of credit issued by the entity, on behalf of its clients, and those issued by other financial entities in favor of the entity on behalf of local exporters.

The accounts in this item account for the nominal amounts of confirmed letters of credit (export letters of credit) as well as those issued (import letters of credit).

Account 4110 01
IMPORT LETTERS OF CREDIT NOT
NEGOTIATED
This account recognizes the nominal amounts for which the entity has issued letters of credit, promises to pay third parties for the purchase of goods made by the entity's client (the applicant for the opening of the letter of credit).

Account 4110 03 EXPORT LETTERS OF CREDIT
This account recognizes the amounts of letters of credit issued by the entity from abroad and which the entity has informed and confirmed to the local exporter. It is debited for the amounts of the informed and confirmed letter(s).

Item 412 GUARANTEES AND BONDS
Item
(characteristic) 4120 GUARANTEES AND BONDS
The accounts in this item must represent potential rights, for the granting of guarantees, bonds, or collateral in favor of third parties and at the request of clients.

Bonds in favor of any person may be removed from accounting when:
a) The beneficiary party has issued the corresponding settlement, a situation that must be demonstrated in a reliable manner by the entity. b) The Intermediary has obtained written confirmation from the beneficiary and the original contract with a stamp or other sign, indicating the release of responsibilities for the entity; c) In the case of bid bonds or guarantees, the entity demanding the products or services has communicated the corresponding award, which must be demonstrated convincingly by the entity; d) Three years of prescription established in article 1550 of the Commercial Code have elapsed, and in addition, the legal representative of the entity must issue a sworn declaration in a notarial instrument, stating that the bond contracts have not been extended, as well as present a certificate issued by the corresponding court, that no judicial action has been filed against the entity in the last three months, derived from the respective contract. The provision constituted in this item will only be applicable to FICAFÉ titles.

Item 413 OPERATIONS WITH FINANCIAL DERIVATIVE INSTRUMENTS The accounts in this item will account for the nominal or notional amounts of financial derivative instrument contracts purchased (acquired) or issued by the entity.

Item
(characteristic)
4130 OPERATIONS WITH FINANCIAL DERIVATIVE INSTRUMENTS Account 4130 01 PURCHASED (ACQUIRED) DERIVATIVE CONTRACTS This account records with debit the notional (nominal) amounts of contracts related to financial derivative instruments that the entity has acquired from third parties, for the purpose of using them as financial risk management instruments.

SECTION V
ACCOUNTING APPLICATIONS MANUAL FOR CONTINGENT COMMITMENTS Element 5 CONTINGENT COMMITMENTS Classification 51 COMMITMENTS AND CONTINGENCIES Item 511 OBLIGATIONS FOR LETTERS OF CREDIT Item (characteristic) 5110 OBLIGATIONS FOR LETTERS OF CREDIT The accounts in this item must represent the commitments undertaken by the local entity with its correspondents, for the opening of letters of credit ordered by its clients; as well as the commitments of the entity, in favor of its local clients. The accounts in this item must represent the commitments undertaken by local banks or financial institutions with their correspondents, for the opening of letters of credit ordered by their clients; as well as the commitments of the entity, in favor of its local clients. In addition, they must represent the contingent obligations undertaken by the entity when acting as guarantors or accrediting agents for its clients.

Item 512 CONTINGENCIES FOR GUARANTEES AND BONDS Item (characteristic) 5120 CONTINGENCIES FOR GUARANTEES AND BONDS The accounts in this item must represent the contingent obligations undertaken by the entity when acting as guarantors or accrediting agents for its clients.

Item 513 OPERATIONS WITH FINANCIAL DERIVATIVE INSTRUMENTS Item (characteristic) 5130 OPERATIONS WITH FINANCIAL DERIVATIVE INSTRUMENTS These accounts record with credit the notional (nominal) amounts of contracts related to financial derivative instruments that the entity has acquired from third parties, for the purpose of using them as financial risk management instruments.

Item 514 OPEN JUDICIAL PROCEEDINGS AGAINST THE ENTITY Item (characteristic) 5140 OPEN JUDICIAL PROCEEDINGS AGAINST THE ENTITY The accounts in this item must represent the contingent obligations for the entity when judicial proceedings are opened against it by clients or other entities for causes inherent to its intermediation activity.

SECTION VI
ACCOUNTING APPLICATIONS MANUAL FOR INCOME
Element 6 INCOME
Classification 61 FINANCIAL INCOME
Item 611 FINANCIAL INCOME
Item
(characteristic)
6110 FINANCIAL INCOME
In the accounts of this item, accrued income from the different items included in the denominations of their accounts is recorded, which include interest, commissions, and other concepts of returns from financial services provided by the entity.

Commissions charged by entities must comply with what is established in the Consumer Protection Law and its respective regulation.

Account 6110 01 LOAN PORTFOLIO
This account must represent the income accrued and received in the exercise for the concept of interest, commissions, and other financial returns from the loan portfolio.

A debit to an overdraft current account is not considered payment.

Account 6110 02 INVESTMENT FINANCIAL INSTRUMENTS This account must represent the interest and other products accrued in the exercise

for the concept of interest, commissions, and other financial returns generated by the assets included in the Investment Financial Instruments portfolio.

The accounts will break down the following concepts: (2) Subaccount 6110 02 01 00 Held for Trading Debt Other Than Derivatives Subaccount 6110 02 02 00 Held for Trading Derivatives Subaccount 6110 02 03 00 Debt Designated at Fair Value with Changes in Profit or Loss Subaccount 6110 02 04 00 Debt-Representative Instruments Subaccount 6110 02 05 00 Debt Instruments with and Without Quoted Prices Subaccount 6110 02 06 00 Other Assets at Amortized Cost

In the subaccounts, sub-subaccounts must be included to record income for concepts of interest, gains from changes in the fair value of said financial instruments, gains from reversal of impairment of financial assets, gains from sales of financial investments, and gains from ineffective amounts in hedging operations. (2) Its balance will be the result of applying cash recoveries and the corresponding provisions.

Account 6110 03 OPERATIONS WITH REPURCHASE AGREEMENTS This account must represent the income obtained in the negotiation of repos and stock market operations. This account must be credited until the cycle of each particular transaction has been closed.

Account 6110 04 INTEREST ON DEPOSITS
This account must represent the interest accrued on deposits in the Central Reserve Bank and other entities.

Cash recoveries and the corresponding provisions will be applied to it. A debit to an overdraft current account will not be considered payment.

Item
(characteristic)
6111 GAIN FROM CHANGES IN FV OF FINANCIAL
ASSETS AND FINANCIAL LIABILITIES
Account 6111 01
CHANGES IN FV OF INVESTMENT FINANCIAL ASSETS AT FAIR VALUE WITH CHANGES IN PROFIT OR LOSS

The accounts in this item are credited for upward changes in the fair value of financial assets and for downward changes in the fair value of financial liabilities.

This account will be credited with upward fair value changes of financial assets that are held within a business model whose purpose is to continuously manage the investment portfolio in order to obtain gains from margin in the short term.

Account 6111 02 CHANGES IN FV OF FINANCIAL LIABILITIES AT FV WITH CHANGES IN PROFIT OR LOSS This account will be credited with downward fair value changes of financial liabilities that are held within a business model whose purpose is to continuously manage the investment portfolio in order to obtain gains from margin in the short term.

Account 6111 03 CHANGES IN FV OF ITEMS DESIGNATED FOR HEDGE ACCOUNTING This account will be affected by changes in the fair value of financial items designated as accounting hedges in a fair value hedge. It will be credited with changes in the fair value of the accounting hedging item that result in an asset or increase the amount of the asset or decrease the value of the financial liability established in the previous evaluation. The amount credited is the one corresponding to the change in fair value that is equivalent to the effective amount of the hedge.

Account 6111 04 CHANGES IN FV OF ITEMS DESIGNATED AS HEDGED ITEMS This account will be affected by changes in the fair value of financial items designated as hedged items in a fair value hedge accounting. If the hedged item is an asset item, this account will be increased by upward changes in that hedged item. If the hedged item is a liability item, this account will be credited with downward changes in that hedged item.

Account 6111 05 GAINS FROM CHANGES IN FV OF THE TIME VALUE OF AN OPTION The subaccounts in which these accounts are disaggregated will be affected by the amounts that are reclassified from the subaccounts: “3230 02 0401 Changes in the fair value of the time value of an option of a hedged item related to a transaction”, “3230

Changes in the fair value of the time value of an option of a hedged item related to a time period, Changes in the fair value of the time value of an option of a hedged item related to a transaction, as applicable.

Accounting records that must be made when the hedged item does not give rise to the recognition of a financial asset or non-financial liability, nor to a firm commitment for a non-financial asset or non-financial liability for which fair value hedge accounting is applied.

Such reclassification is considered a reclassification adjustment in the same period or periods during which the expected future hedged cash flows affect the period's income (for example, when a projected sale takes place).

Account 6111 06
GAINS FROM CHANGES IN THE FAIR VALUE OF THE TIME ELEMENT OF CONTRACTS TO TERM OF A HEDGED ITEM

This account will register the amounts that are reclassified from the sub-accounts: "3230 02 0601 Changes in the fair value of the time element of contracts to term of a hedged item related to a transaction" and "3230 02 0701 Changes in the fair value of the time element of contracts to term of a hedged item related to a time period", as applicable, when the hedged item does not give rise to the recognition of a financial asset or non-financial liability, nor to a firm commitment for a non-financial asset or non-financial liability for which fair value hedge accounting is applied. Such reclassification is considered a reclassification adjustment in the same period or periods during which the expected future hedged cash flows affect the period's income (for example, when a projected sale takes place).

Item
(Characteristic) 6112 GAIN FROM REVERSAL OF IMPAIRMENT OF FINANCIAL ASSETS

Account 6112 01
REVERSAL OF IMPAIRMENT OF FINANCIAL ASSETS OTHER THAN CREDIT RISK ASSETS (CRA)

In the accounts of this item, the gains resulting from the reversal of losses due to impairment of value of financial assets will be accounted for.

This account will be affected with the amounts corresponding to reversals of impairment of value applied to financial instruments that in previous evaluations suffered deterioration in their credit quality, which caused the recognition of losses due to impairment of such instruments. On the date that this account is affected, there will be evidence that the financial instrument has recovered part (or all) of its lost value; consequently, those value increases will affect this account with a debit to the account of the affected financial instrument or to the account adjusting the value of the same, the latter in case the value of the instrument is not affected directly.

The reversal of the loss due to impairment of these assets will not give rise to a book amount of the financial asset that exceeds the amortized cost that would have been determined if the loss due to impairment of value had not been accounted for on the date of reversal.

Account 6112 02
REVERSAL OF ESTIMATES OF LOSSES FROM UNCOLLECTABILITY OF CREDIT RISK ASSETS (CRA)

This account will be affected with the amounts corresponding to reversals of impairment of value applied to financial instruments classified within the groupings "114 Loans" or "125 Accounts receivable" that in previous evaluations suffered deterioration in their credit quality, which caused the recognition of losses due to impairment of value of such instruments.

On the date that this account is affected, there will be evidence that the financial instrument has recovered part (or all) of its lost value; consequently, those value increases will affect this account with a debit to the accounts "1149 Provision for uncollectability of loans (-)" or "1259 Estimate of loss due to impairment of value (-)", the accounts that correspond. The reversals that are applied to this account may also be originated by a reduction in the risk amount of the previously impaired financial assets or by total cancellation thereof by the debtor.

Item
(Characteristic) 6113 GAIN FROM SALE OF FINANCIAL INVESTMENTS

Account 6113 01GAIN FROM SALE OF FINANCIAL ASSETS MEASURED AT AMORTIZED COST

In this item, gains from the sale of financial instruments will be registered.

This account will be credited with the amounts corresponding to the gain obtained in the sale of financial instruments on the date that the sale is made. With a debit to the corresponding availability account.

Classification 62 OTHER FINANCIAL INCOME

Item 621 OTHER FINANCIAL INCOME

Item
(Characteristic)
6210 OTHER FINANCIAL INCOME

In this item, the gains that are generated on operations that do not represent the lines of business that are the main purpose of the entity will be recognized.

Account 6210 01 FOREIGN CURRENCY OPERATIONS

Account related to the purchase-sale of foreign currency:

It is credited for gains in the purchase-sale of currency different from the functional currency of the entity with a debit to the accounts of the item 111 Availability.

The account of this item related to fluctuations in the exchange rate of monetary items denominated in foreign currency: (2)

It is credited with the amounts accrued as gains obtained from the conversion, at the purchase exchange rate, of the functional currency, on the date of closing of the financial statements. With a debit to the monetary items of asset and liability affected by the conversion.

Assets due to upward changes and liabilities due to downward changes.

Account 6210 02 LETTERS OF CREDIT

This account will be affected by crediting it with the amounts that imply commissions accrued for the opening, granting, or confirmation of letters of credit with a debit to the corresponding availability account or to the account "1250 03 Commissions financial services", in the sub-account that corresponds.

Account 6210 03 GUARANTEES AND BONDS

The sub-accounts of this account must represent the income accrued from contingent character transactions, such as commissions and other services provided to clients.

Cash recoveries and corresponding provisions will be applied to it.

Account 6210 04 COMMISSIONS FOR OTHER SERVICES

In the sub-accounts of this account, commissions for the different concepts indicated in each of them are registered. It is credited with a debit to the corresponding accounts receivable or to cash if performed in that manner. (2)

The use of sub-accounts from 6210 04 0300 to 6210 04 0500 and from 6210 04 1500 to 6210 04 2200 is exclusive for Cooperative Banks, Savings and Credit Societies, and Financial Federations regulated by the corresponding Law. (1)

Sub-account 6210 04 0600 Acquiring commissions

This sub-account is affected with a credit in concept of the commissions that the acquiring entity has accrued on the promissory notes that affiliated businesses have submitted for collection, debiting the sub-account "1250 09 0101 Acquiring entities".

Sub-account 6210 04 0700 Interchange commissions

This sub-account will be credited with the amounts corresponding to commissions accrued in concept of participation in the commission for sales processed in a POS terminal of an acquiring entity that is different from the entity, when the latter acts as the issuer.

It is credited for the commission charged by the issuing entity to the acquirer in the process of exchanging promissory notes in concept of operations performed by cardholders in businesses affiliated with the acquiring entity.

Account 6210 05
COMMISSIONS FOR MARKETING SHARES OF OPEN INVESTMENT FUNDS

The sub-accounts of this account must represent the income accrued from the provision of the service to market shares of Open Investment Funds, both Local and Foreign.

Account 6210 06 COMMISSIONS FOR ELECTRONIC MONEY SUPPLY OPERATIONS

The sub-account of this account must register the income accrued from the provision of services to supply electronic money.

Account 6210 07 COMMISSIONS FOR MARKETING OF VOLUNTARY PENSION SAVINGS FUNDS

The sub-account of this account must register the income accrued from the provision of services for the marketing of Voluntary Pension Savings Funds.

Account 6210 08 COMMISSIONS FOR ADMINISTRATION OF VOLUNTARY PENSION SAVINGS FUNDS

The sub-account of this account must register the income accrued from the provision of services for the administration of Voluntary Pension Savings Funds.

Classification 63 INCOME FROM OTHER OPERATIONS

Item 631 INCOME FROM OTHER OPERATIONS

Item
(Classification) 6310 INCOME FROM OTHER OPERATIONS

Account 6310 01 RECOVERIES OF LOANS AND INTERESTS (1)

This account must represent the recoveries of loans and interests that have been written off (given as bad debt) in previous exercises and the releases of sanitation reserves constituted in previous exercises. (1)

Account 6310 02 GAIN IN SALE OF ASSETS

In this account, the gains obtained in the sale of the assets detailed in the sub-accounts that constitute it will be recognized. (2)

This account must represent the profit obtained in the sale of properties and equipment, extraordinary assets, discontinued operations, and intangibles.

Account 6310 03 INCOME FROM EXPLOITATION OF ASSETS

This account will be affected by crediting it with the flows generated for the entity by assets that, being its property and in the possibility of being sold, have resources that are capable of generating flows by themselves (example of buildings that are rented, farms that generate agricultural production, or others).

Account 6310 04 DIVIDENDS

In separate financial statements, the amounts corresponding to dividends decreed by the entities in which there are investments in shares are registered with a debit to the account "1250 13 Dividends".

Dividends received from subsidiaries and participations in joint ventures and applied in these accounts are debited by elimination as an intra-group transaction when the consolidated financial statements are prepared with a credit to the equity account affected by the participated entity.

Account 6310 05 INCOME FROM TEMPORARY DIFFERENCES OF TAXES ON INCOME

In this account, temporary income from taxes on income must be registered, as mentioned in the International Accounting Standards.

Account 6310 06 SUBSIDIES

This account must represent the recognition of income based on the income method, established in the International Accounting Standard (IAS-20).

Account 6310 07
GAINS GENERATED BY ENTITIES
REGISTERED UNDER THE EQUITY METHOD

It applies when the financial statements of the entity are consolidated, when it is a holding entity.

In this account, the gains generated by investments in shares obtained in joint ventures, which are recorded in the consolidated financial statement applying the equity method, will be registered.

It is credited with the gains recognized under the equity method at the close of the exercise with a debit to the sub-accounts "1260 01 Joint investments", in the sub-account that applies.

Account 6310 08 GAINS FROM INEFFECTIVE AMOUNTS IN HEDGING OPERATIONS

Sub-account 6310 08 0100 Hedged items

This account will be affected by crediting it with the ineffective amounts that imply a gain and that arise in a hedging relationship, any of those established in the chart of accounts. In addition, it will be affected with the amounts that represent ineffective amounts that imply a gain and that come from a hedged item, in the latter case, only from a hedged item in a fair value hedging relationship.

Account 6310 09 GAIN FROM REVERSALS OF IMPAIRMENT OF VALUE OF ASSETS

In the sub-accounts of this account, increases in fair value are registered, when previously a loss due to impairment of value of the extraordinary assets held for sale, properties and equipment, intangible assets, and investments in shares had been recognized, with a debit to the corresponding asset accounts.

Sub-account 6310 09 0100 Investments in shares

This sub-account will be affected with the amounts that represent a reversal of losses due to impairment of value that was previously recognized and that, on the date of the financial statements, there is evidence that the events that generated that loss have disappeared and consequently the recoverable amount of the investment has increased on the balance date.

Sub-account 6310 09 0200 Properties and equipment

The reversal of the impairment of investment property that is valued at cost will be observed observing the rules established for properties and equipment.

Account 6310 99 OTHER INCOME

This account must represent the income obtained, which does not correspond to the banking business and which is not found in the preceding classification.

SECTION VII
ACCOUNTING APPLICATIONS MANUAL OF COSTS

Element 7 COSTS

Classification 71 FINANCIAL COSTS

Item 711 FINANCIAL COSTS

Item
(Characteristics) 7110 FINANCIAL COSTS OF LIABILITIES

The accounts of this item must represent the financial costs of the exercise, such as interest and commissions generated by the liabilities of the institution. In general, it represents the cost incurred by the institution for the financing of its operations and for the provision accrued by depositors.

Account 7110 01 DEPOSITS

This account must represent the interest and any other provision accrued by depositors.

Account 7110 02 LOANS FOR THIRD PARTIES

This account must represent the interest and commissions accrued for loans obtained to place them in active credit operations.

Account 7110 03 LOANS TO COVER CASH DEFICIT

This account must represent the interest accrued for loans obtained from the Central Reserve Bank (BCR), to cover temporary or structural liquidity deficiencies. These loans are those that are registered in accounts 2116 01 Owed to BCR and 2117 01 Owed to BCR.

Likewise, this account must represent the interest accrued for loans obtained to cover temporary or structural liquidity deficiencies, insolvencies, or other problems referred to in articles 69 and 71 of the Law of Cooperative Banks and Savings and Credit Societies.

Account 7110 04 OWN ISSUANCE SECURITIES

This account must represent the interest accrued for bonds and mortgage certificates, issued with the object of capturing resources to be placed in active credit operations.

Additionally, the interest accrued for other own debt issuances performed by the entity that are not securities will be registered, with the object of capturing resources for financial intermediation. (5)

Account 7110 05
FINANCIAL LIABILITIES AT FAIR VALUE WITH CHANGES IN INCOME

Expenses for effective interest incurred on financial liabilities are registered with a credit to the accounts of the item (characteristic) "2100 01 Held for trading other than derivatives". This will apply always that the entity has decided to recognize interest on financial liabilities classified at fair value separately; otherwise, it would be expected that they were accumulated within the instrument that originated them as part of the fair value. On the other hand, revaluations corresponding to financial derivative instruments directly affect the main account, that is, capital, not interest.

Account 7110 06 PREMIUMS FOR DEPOSIT GUARANTEES

This account must represent the value of the premiums paid to the Deposit Guarantee Institute, to guarantee public deposits as established in article 169 of the Bank Law and 160 of the Law of Cooperative Banks and Savings and Credit Societies.

Account 7110 07 OPERATIONS WITH REPURCHASE AGREEMENTS

Account 7110 08 CONVERTIBLE OBLIGATIONS INTO SHARES

Account 7110 09 SUBORDINATED LOANS

Account 7110 10 LEASES

Expenses for effective interest incurred in concept of financial obligations assumed by the entity are registered with a credit to the interest sub-accounts of the accounts of the respective loan portfolio.

Account 7110 11 COMMISSIONS FOR FINANCIAL GUARANTEES RECEIVED

This account will be affected by debiting it with the amounts that the entity has disbursed in concept of amortized commissions for financial guarantees constituted in favor of the entity.

Account 7110 12 CREDIT CARD COMMISSIONS

This account must represent the financial costs for credit card commissions incurred by the entity for the representation of a credit card issuer brand, as well as the payment of the membership.

Account 7110 13 COMMISSIONS FOR OTHER FINANCIAL LIABILITIES

This account must represent the costs incurred in intermediation operations not included in the preceding classifications.

Item
(Characteristic)
7111 LOSS FROM CHANGES IN THE FAIR VALUE OF FINANCIAL ASSETS AND FINANCIAL LIABILITIES

The accounts of this item are debited for downward changes in the fair value of financial assets and for upward changes in the fair value of financial liabilities.

Account 7111 01 CHANGES IN THE FAIR VALUE OF INVESTMENT FINANCIAL ASSETS AT FAIR VALUE WITH CHANGES IN INCOME

This account will be affected by debiting it with the downward fair value changes of financial assets held within a business model whose purpose is to continuously manage the investment portfolio in order to obtain gains from margin in the short term.

Account 7111 02 CHANGES IN THE FAIR VALUE OF FINANCIAL LIABILITIES AT FAIR VALUE WITH CHANGES IN INCOME

This account will be affected by debiting it with the upward fair value changes of financial liabilities held within a business model whose purpose is to continuously manage the investment portfolio in order to obtain gains from margin in the short term.

Account 7111 03 CHANGES IN THE FAIR VALUE OF ITEMS DESIGNATED FOR ACCOUNTING HEDGING

This account will be affected with the fair value changes of financial items designated as accounting hedging items in a fair value hedge.

If the fair value changes in the accounting hedging item give rise to a financial liability or increase the amount of the liability or decrease the value of the financial asset established in the previous evaluation, this account will be debited for the amount of the fair value change that is equivalent to the effective amount of the hedge.

Account 7111 04 CHANGES IN THE FAIR VALUE OF ITEMS DESIGNATED AS HEDGED ITEMS

This account will be affected with the fair value changes of financial items designated as hedged items in a fair value accounting hedge. If the hedged item is an asset item, this account will be increased by debiting it with the downward changes of that hedged item. If the hedged item is a liability item, this account will be increased by debiting it with the upward changes of that hedged item.

Account 7111 05 LOSSES FROM CHANGES IN THE FAIR VALUE OF THE TIME VALUE OF AN OPTION

Sub-account 7111 05 0100 Losses from changes in the fair value of the time value of an option of a hedged item related to a transaction

Sub-account 7111 05 0200
Losses from changes in the fair value of the time value of an option of a hedged item related to a time period

(2)

These sub-accounts will be affected with the amounts that are reclassified from the sub-accounts: "3230 01 0301 Changes in the fair value of the time value of an option of a hedged item related to a transaction", "3230 02 0501 Changes in the fair value of the time value of an option of a hedged item related to a time period", "323 0 01 0301 Changes in the fair value of the time value of an option of a hedged item related to a transaction" and "323 0 02 0501 Changes in the fair value of the time value of an option of a hedged item related to a time period", as applicable. Accounting records that must be made when the hedged item does not give rise to the recognition of a financial asset or liability

No financial commitment, nor a firm commitment for a non-financial asset or a non-financial liability for which fair value hedge accounting applies.
Account 7111 06
LOSSES FROM CHANGES IN THE FAIR VALUE OF THE TERMINAL VALUE OF AN ELEMENT OF THE CONTRACTS TO THE TERM OF A COVERED ITEM Subaccount 7111 06 0100 Losses from changes in the fair value of the terminal value of an element of the contracts to the term of a covered item related to a transaction This subaccount will register the amounts that are reclassified from the subaccounts: “3230 01 0401 Changes in the fair value of the element to the term of the contracts to the term of a covered item related to a transaction” and “3230 02 0601 Changes in the fair value of the element to the term of the contracts to the term of a covered item related to a transaction”, as appropriate, when the covered item does not give rise to the recognition of a financial asset or non-financial liability, nor to a firm commitment for a non-financial asset or a non-financial liability for which fair value hedge accounting applies. Such reclassification is considered a reclassification adjustment in the same period or periods during which the expected future cash flows covered affect the result of the period (for example, when a projected sale takes place). Subaccount 7111 06 0200 Losses from changes in the fair value of the terminal value of an element of the contracts to the term of a covered item related to a time period The balance of this subaccount represents the amounts systematically and rationally amortized over the period during which the fair value hedge adjustment for the intrinsic value of the option, transferred from the equity subaccounts: “3230 02 0701 Changes in the fair value of the element to the term of the contracts to the term of a covered item related to a time period” and “323 0 02 0701 Changes in the fair value of the element to the term of the contracts to the term of a covered item related to a time period”, as appropriate. Item (characteristic) 7112 LOSSES FROM IMPAIRMENT OF FINANCIAL ASSETS Account 7112 01 IMPAIRMENT OF FINANCIAL ASSETS OTHER THAN CREDIT RISK ASSETS (CRA) This account will be affected with the amounts corresponding to identified value impairment losses on financial instruments measured at amortized cost and which are included in the accounts of the item “113 Investment financial instruments”.

On the date this account is affected, there must be pertinent evidence that the financial instrument has been impaired in part (or all) of its book value.
Account 7112 03 CONSTITUTION OF LOSS ESTIMATES FOR GUARANTEES, BONDS, AND OTHERS This account must represent the value of the reserve constituted in the exercise for the recognition of losses.
Account 7112 04 CONSTITUTION OF LOSS ESTIMATES FOR WRITE-OFFS OF GUARANTEES, BONDS, AND OTHERS This account must represent the value of the reserve for write-offs for the recognition of losses.
Item
(characteristic)
7113 LOSS FROM SALE OF FINANCIAL INVESTMENTS
Account 7113 01 LOSS FROM SALE OF FINANCIAL ASSETS MEASURED AT AMORTIZED COST This account will be affected by debiting it with the amounts corresponding to the loss obtained in the sale of financial instruments on the date it is carried out. With credit to the corresponding asset account. Item (characteristic) 7114 OTHER FINANCIAL COSTS (2) This item will be affected with the amounts corresponding to other financial costs generated by events other than those considered, which have not been identified specific accounts in which to recognize them, and in addition, they do not fit into any of the other classifications stated to recognize the different types of financial costs that the entity may generate. (2) Account 7114 01 TRANSACTIONAL COSTS This account will be affected with the transactional costs incurred by the entity in obtaining financial instruments whose subsequent measurement is at fair value with changes in results. Account 7114 02 COSTS OF SALE

This account will be affected with the costs incurred by the entity for the purpose of disposing of assets. Examples of these are commissions paid to stockbrokers, real estate brokers, etc.
Account 7114 03 OTHERS
This account is debited for any other financial costs incurred other than those indicated above with credit to the financial asset or liability accounts that have been used as the contra account of the operation. Item 712 CONSTITUTION OF LOSS ESTIMATES FOR SANITATION OF CREDIT RISK ASSETS (CRA) (1) Item (characteristics) 712 CONSTITUTION OF LOSS ESTIMATES FOR SANITATION OF CREDIT RISK ASSETS (CRA) (1) Account 7120 00 SANITATION OF CREDIT RISK ASSETS (1) This item must represent the value of loss estimates constituted during the accounting exercise. It will be debited for increases to the estimates and credited for decreases to the estimates constituted in the current exercise. (1) This account will be affected by debiting it with the amounts corresponding to value impairment losses established applying the corresponding regulations on credit risk assets with credit to the accounts of the item “1149 Provision for loan uncollectibility”, in the account that corresponds. (1) In the case of applications to this account in concept of deterioration of financial guarantee contracts, the amount applied to this account will increase the liability of the account “224006 Obligations by financial guarantee contracts”. (1) Item 713 CONSTITUTION OF LOSS ESTIMATES FOR WRITE-OFFS OF CREDIT RISK ASSETS (CRA) (1) Item (characteristics) 7130 CONSTITUTION OF LOSS ESTIMATES FOR WRITE-OFFS OF CREDIT RISK ASSETS (CRA) (1) Account 7130 00 WRITE-OFFS OF CREDIT RISK ASSETS (1) This item must represent the value of the write-offs (derecognition) of intermediation assets. (1) This account will be affected by debiting it with the amounts corresponding to value impairment losses established applying the corresponding regulations on the assets

of credit risk with credit to the accounts of the item “1149 Provision for loan uncollectibility”, in the account that corresponds. (1) In the case of applications to this account in concept of deterioration of financial guarantee contracts, the amount applied to this account will increase the liability of the account “224006 Obligations by financial guarantee contracts”. (1) Classification 72 COSTS OF OTHER OPERATIONS (2) Item 721 COSTS OF OTHER OPERATIONS (2) Item (characteristic) 7210 COMMISSIONS FOR OTHER SERVICES This item will be affected with the amounts disbursed by the entity for the payment of commissions for received services. Account 7210 01 FOR ASSET MANAGEMENT This account will be affected by debiting it with the amounts corresponding to the commissions incurred by the entity in concept of costs for assets ceded in administration to third parties or for the requirement of other services, with credit to the accounts of the item “2240 accounts payable” or another, as appropriate. Account 7210 02 COSTS OF MARKETING SHARES OF OPEN INVESTMENT FUNDS The subaccounts of this account must represent the value of the costs incurred by the entities for the activity of marketing shares of Open Investment Funds, both Local and Foreign. Account 7210 03 COSTS OF MARKETING VOLUNTARY PENSION SAVINGS FUNDS The subaccount of this account must represent the value of the costs incurred by the entities for the marketing activity of Voluntary Pension Savings Funds. Account 7210 04 COSTS FOR ADMINISTRATION OF VOLUNTARY PENSION SAVINGS FUNDS The subaccount of this account must represent the value of the costs incurred by the entities for the administration activity of Voluntary Pension Savings Funds.

Account 7210 05 COSTS FOR COMMISSION FOR DEPOSITS IN GUARANTEE FOR PROVIDING ELECTRONIC MONEY The subaccount of this account must represent the value of the commissions paid to the Central Reserve Bank for the deposit opened in a restricted current account that serves as a guarantee to provide electronic money to customers. Account 7210 06 SERVICE PROVISION This account will be affected by debiting it with the amounts corresponding to commissions for other received services with credit to the corresponding availability account or to the subaccount “2220 06 Commissions”. The use of the subaccounts of 7210 06 0200 to 7210 06 0400 is exclusive for the Cooperative Banks, Savings and Credit Societies and the Financial Federations regulated by the corresponding Law; it corresponds to the necessary expenditures for the generation of other financial income that are registered in the subaccounts of 6210 04 0300 to 6210 04 0500 (1) Account 7210 07 TECHNICAL SERVICE PROVISION (1) The use of the subaccounts of this account is exclusive for the Cooperative Banks, Savings and Credit Societies and the Financial Federations regulated by the respective Law; it corresponds to the necessary expenditures for the generation of other financial income that are registered in the subaccounts of 6210 04 1500 to 6210 04 2200. (1) Item (characteristic) 7211 LOSSES GENERATED BY ENTITIES REGISTERED UNDER THE EQUITY METHOD This item applies when the financial statements of the entity are consolidated, when it is a holding company. In this item, losses generated by investments in shares held in joint ventures and which are applied to the consolidated financial statement applying the equity method will be registered. It is debited with the losses recognized under the equity method at the close of the exercise with credit to the subaccounts of the account “1260 01 Joint investments”, as applicable.

Item
(characteristic)
7212 LOSSES FROM FOREIGN CURRENCY OPERATIONS
In this item, losses incurred in buy-sell operations and in exchange rate fluctuations arising in assets and liabilities denominated in foreign currency, as well as losses originating from the conversion of foreign businesses, are registered. The accounts of this item related to the purchase and sale of foreign currency: (2) It is debited for losses in the purchase and sale of currency other than the entity's functional currency with credit to the accounts of item 111 Availability. (2) In the case of exchange rate fluctuations of monetary items denominated in foreign currency:
It is debited with the amounts incurred in concept of losses from the conversion, at the purchase exchange rate, of the functional currency, at the closing date of the financial statements. With credit to the affected monetary asset and liability items by the conversion. Assets for downward changes and liabilities for upward changes. Item (characteristic) 7213 LOSS FROM INEFFECTIVE AMOUNTS IN HEDGE OPERATIONS Account 7213 01 LOSS FROM INEFFECTIVE AMOUNTS IN HEDGE OPERATIONS This account will be affected by debiting it with the ineffective amounts that imply a loss and that arise in a hedge relationship, any of those established in the chart of accounts. In addition, it will be affected with the amounts that represent ineffective values that imply a loss and that come from a covered item, in this last case, only from a covered item in a fair value hedge relationship. Item (characteristic) 7214 LOSS FROM VALUE IMPAIRMENT OF ASSETS For the case of the assets treated in this item, it is considered that a value impairment loss has occurred in the asset when its recoverable amount (the higher value between fair value minus sales costs and its value in use, the latter equivalent to the present value, applying an appropriate discount rate, of the flows both to receive and to disburse by the entity and that derive from the continuous use of the asset and its final disposal) is less than its book value, therefore the latter is reduced to the recoverable value of the evaluated asset. Account 7214 01 EXTRAORDINARY ASSETS (1) In this account, losses in “Extraordinary Assets” for value impairment must be represented, with credit to the accounts of the item “122 Assets received in payment or adjudicated”, as appropriate. (1) Account 7214 02 PROPERTY AND EQUIPMENT It is affected by debit for the amounts of losses from impairment established with credit to the accounts of the items “131 Non-depreciable Properties” and “132 Depreciable Property and Equipment”, in the case that the loss is applied directly on the impaired assets or to the account “1329 0 2 Accumulated depreciation, amortization and impairment”, when the loss is applied through a contra account. Account 7214 03 INTANGIBLE ASSETS It is affected by debit crediting the accounts of the item “133 Intangibles”, in the case that the loss is applied directly on the affected assets or to the account “1339 01 Amortization”, when the loss is applied through a contra account. Account 7214 04 SHARE INVESTMENTS This account is affected by debiting it with the impairment losses with credit to the accounts of the item “126 Investments in shares, rights and participations”, in the case that the asset account is affected directly or to the respective revaluation subaccounts. The impairment amount that affects this account is the one incurred in the societies that are included in the consolidated financial statement applying the equity method. In the case of Goodwill, it is affected by debiting it with the impairment
losses with credit to the accounts of the item “1261 Purchased Goodwill”. To apply the impairment loss to this item, the evaluation of the assets of the subsidiaries that have been included in the consolidated financial statements must be carried out (identifying the cash-generating unit(s) to which such goodwill has been assigned), any impairment loss identified in those assets (cash-generating unit(s)) affects first the purchased goodwill and then, any remaining impairment loss is applied to the identifiable assets proportionally to their book value within the generating unit.

Item
(characteristic)
7215 LOSS ON SALE OF ASSETS
Account 7215 01 LONG-TERM ASSETS
Account 7215 02 ASSETS RECEIVED IN PAYMENT OR ADJUDICATED The accounts of this item must represent the value of the losses caused by the sale of long-term asset goods and extraordinary assets.
In the contrary case if the sale value is less than the book value of the good or the net realizable value, the difference must be registered in this account.
Item 729 COSTS FROM ASSET EXPLOITATION (2)
Item
(characteristic)
7299 COSTS FROM ASSET EXPLOITATION
Costs that the entity incurs for various concepts such as costs from asset exploitation, costs from credit card plastics and any other costs of similar nature are registered in this item with credit to accounts of item 111 Availability or another asset account that corresponds. (2)

SECTION VIII
ACCOUNTING APPLICATIONS MANUAL FOR ADMINISTRATIVE EXPENSES Element 8 EXPENSES Classification 81 ADMINISTRATIVE EXPENSES Item (2) 811 EXPENSES OF OFFICIALS AND EMPLOYEES Item (characteristic) (2) 8110 EXPENSES OF OFFICIALS AND EMPLOYEES This item must represent the expenses for concepts of ordinary and extraordinary salaries, paid to the institution's staff. This item is debited for expenses incurred in concept of items such as remuneration, staff benefits, board expenses, payments based on share value and other expenses of officials and employees with credit to the accounts of the item “111 Availability” or to the accounts of the item “2220 accounts payable” or others, as appropriate. (2) Account 8110 01 REMUNERATIONS This account must represent the expenses for concepts of ordinary and extraordinary salaries, paid to the institution's staff.

Salary must be considered only what is paid to the staff for the provision of their services, that is, what is accrued during vacations, indemnities and other similar situations must be registered in the corresponding accounts. Account 8110 02 STAFF BENEFITS This account must represent the value of the benefits paid to the staff, as described in the subaccounts. Account 8110 03 INDEMNITIES AND RETIREMENT BENEFITS FOR STAFF This account must represent the value of the indemnities paid to the staff or the constitution of the provision for indemnities, as appropriate, based on the accounting policy that is adopted. Account 8110 04 BOARD EXPENSES This account must represent the expenses generated by the institution's board of directors, according to the subaccount detail. Account 8110 05 OTHER EXPENSES OF OFFICIALS AND EMPLOYEES This account must represent the value of diverse expenses imputable to the staff, according to subaccount detail. Account 8110 06 PENSIONS AND RETIREMENTS This account must represent the value of the estimates for concepts of pensions and retirements, which are made according to each institution's policies. Account 8110 07 SHARE-BASED PAYMENTS This account must represent the value of the share-based payments that have been agreed upon for the provision of services, in the case that it is a service received from the officials or employees. Item 812 GENERAL EXPENSES (2) Item (characteristic) 8120 GENERAL EXPENSES

The accounts of this item must represent the expenses incurred by the entity according to the detail of accounts and subaccounts.
These accounts must be affected by the disbursements and provisions that correspond.
It is debited for expenses incurred in concept of items such as consumption of materials, repair and maintenance of properties and equipment, repair and maintenance of investment properties, services and taxes; with credit to the accounts of the item “111 Availability”, the accounts of the items (characteristics) “2220 accounts payable”, “1230 Inventories”, or others, as appropriate. (2) The use of account 8120 10 is exclusive for the Cooperative Banks, Savings and Credit Societies and the Financial Federations regulated by the corresponding Law. (1) Item 813 DEPRECIATIONS AND AMORTIZATIONS Item (characteristic) 8130 DEPRECIATIONS AND AMORTIZATIONS The accounts of this item must represent the loss of value of the goods that make up the physical and intangible assets, either by depreciation or by amortization. The subaccounts of this item are debited for the amounts recognized as depreciation or amortization expense based on the systematic distribution assigned to the goods incorporated in each of the cited accounts; with credit to the accounts of the item “1329 Accumulated depreciation, amortization and impairment”. (2) Item 814 PROVISIONS (2) Item (characteristic) 8140 PROVISIONS The accounts of this item represent obligations registered by the entity in concept of future obligations; which are based on legal regulations, internal entity policies or specific requirements made by the corresponding technical standard, with application in the item (characteristic) “2240 Provisions”. (2) Item 815 INCOME TAX In this item, all concepts related to income tax, both current and deferred, and equally both the income and the expenses for this concept are applied.

Alameda Juan Pablo II, entre 15 y 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-11/2022
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ACCOUNTING MANUAL FOR DEPOSIT-TAKING INSTITUTIONS AND HOLDING COMPANY Approval: 12/30/2022 Validity: 01/16/2023

SECTION IX
MANUAL OF ACCOUNTING APPLICATIONS OF OFF-BALANCE SHEET ACCOUNTS

Item 9 OFF-BALANCE SHEET ACCOUNTS
Classification 91 FINANCIAL INFORMATION

Rubro (Feature) 911 RIGHTS AND OBLIGATIONS FOR CREDITS Rubro (Feature) (2) 9110 RIGHTS AND OBLIGATIONS FOR CREDITS

Account 9110 01 AVAILABILITY FOR OBTAINED CREDITS (2) This account records the amounts of credit lines contracted in firm by the entity, which are reduced as the entity makes use of them.

Account 9110 02 EXIGIBILITY FOR GRANTED CREDITS This account must represent the value of loans approved, pending disbursement, and the availability of clients by credit line contracts.

Rubro 912
FIDUCIARIES AND FUNDS RECEIVED IN ADMINISTRATION Rubro (Feature) (2) 9120 FIDUCIARIES AND FUNDS RECEIVED IN ADMINISTRATION

Account 9120 01 FIDUCIARIES RECEIVED IN ADMINISTRATION Account 9120 02 FUNDS RECEIVED IN ADMINISTRATION The accounts of this rubro must represent the value of assets transferred in favor of the entity, to be administered in the capacity of Trust, according to the regulations established in the Commercial Code; as well as funds received to be administered on behalf of others, including amounts received in administration for Voluntary Previsional Savings Funds.

To control the transactions carried out by the trust, accounting records required by the circumstances must be implemented.
In these accounts, the total amounts of assets that make up the trusts administered by the entity, as well as funds received to be administered on behalf of others, will be registered. The values registered in these accounts will be backed by the general balances that the administering entity generates periodically for each trust or fund administered.

Rubro 913 ASSETS IN ADMINISTRATION
This rubro must represent the value of funds in the possession of the entity, received with the characteristics of a commercial mandate.

In the case of Cooperative Banks, Savings and Credit Societies, and Financial Federations regulated by the corresponding Law, this rubro may only be used with authorization from the Central Bank of Reserve. (1)

In the accounts of this rubro, amounts, both of capital and interest of assets received in administration by the entity, will be included. The amounts included here will be those received in administration less the amortizations that are carried out with their holders based on payments received. (2)

These amounts will be distinct from those corresponding to recoveries and liquidations carried out, which will be registered in the availability and accounts payable accounts corresponding while liquidation does not occur.

Control of these values must be kept in accounting records, as demanded by the circumstances.

Rubro 914 GUARANTEE FUNDS (2)
Rubro (Feature)
9140 GUARANTEE FUNDS
The accounts belonging to this rubro must represent the value of each fund received to guarantee credit operations.

To control these funds, accounting records that demand the circumstances must be established.

Rubro 915 INTERESTS ON LOANS OF DOUBTFUL RECOVERY (2) Rubro (Feature) 9150 INTERESTS ON LOANS OF DOUBTFUL RECOVERY This rubro must represent the value of interests that accrue on loans with delinquency exceeding ninety (90) days or that determine other norms issued by the Central Bank of Reserve through its Norms Committee.

Rubro 916 PLEDGED LOAN PORTFOLIO (2)
Rubro (Feature) 9160 PLEDGED LOAN PORTFOLIO
In the accounts of this rubro, the entity must register the portfolio of the entity that is guaranteeing obligations to its account and in favor of the Central Bank of Reserve of El Salvador, Development Bank of the Republic of El Salvador, Deposit Guarantee Institute, Stabilization Funds, Other entities of the Financial System, foreign entities, in favor of third parties, or for the issuance of negotiable bonds.

In the accounts of this rubro, the amounts of assets that the entity has ceded as collateral for various causes, such as restricted portfolio for purposes of using it as collateral for debt issuance, will be registered. The pledge does not imply withdrawal of the asset from the balance sheet.

Rubro 917 BALANCES CHARGED TO DEBTORS (2)
Rubro (Feature) 9170 BALANCES CHARGED TO DEBTORS

Account 9170 00 BALANCES CHARGED TO DEBTORS (2) In the subaccounts of this account, balances that have remained pending payment by obligations of debtors who have partially canceled to the institution, through extraordinary assets received in payment or adjudicated, must be registered.

Classification 92 INVENTORIES IN THE VAULT
In this classification, the different documents that support operations, which are under own custody or on behalf of third parties and others, are registered.

Rubro (Feature)
9210 LOAN AND CREDIT DOCUMENTS
The accounts of this rubro must register the instruments that back different loans and credits granted by the entity.

Rubro (Feature)
9211 OPEN JUDICIAL PROCEEDINGS
In this rubro, contingent amounts that could favor the entity, due to open judicial proceedings by the entity against third parties; and from which the probability of some monetary settlement in favor arises, will be registered.

Rubro (Feature)
9212 OPEN JUDICIAL PROCEEDINGS AGAINST THE ENTITY The accounts of this rubro must register the amounts that represent contingent liabilities, events that according to the knowledge the entity has of them, at the date of the financial statements, it is not probable that there is a present obligation due to them and the possibility that a resource outflow occurs due to them is not remote.

Rubro (2) 922 FINANCIAL INSTRUMENTS AND OTHER DOCUMENTS The accounts of this rubro must represent the value of documents, in the possession of the entity, according to account and subaccount detail.

In the accounts, documents that support the entity's operations carried out with financial investments are registered.

Rubro 923 INVESTMENT FINANCIAL INSTRUMENTS
Rubro (Feature)
9230 AT FAIR VALUE WITH CHANGES IN RESULTS (FVCR) The accounts of this rubro must represent the nominal value of the registered documents, plus the value of coupons in existence.

Rubro 924 WRITTEN-OFF ASSETS
Rubro (Feature)
9240 WRITTEN-OFF ASSETS
In the accounts of this rubro, the amounts corresponding to credits and investments written off from assets for various causes will be registered. The amounts to be registered are those corresponding to capital and interest of the withdrawn operations.

Annex No.1
CHAPTER V
FINANCIAL STATEMENTS

NAME OF THE ENTITY PUBLISHING 1/
Statement of Financial Position 2/
Balances at December 31 (current year) and of (previous year) (Expressed in thousands of United States dollars)

Note 3/
(Current Year) (Previous Year)

ASSETS
Cash and cash equivalents (111, 112 and all those items that the entity in accordance with its policies defines as cash equivalents)

Investment financial instruments (net) (1130, 1131, 1134) At Fair Value with Changes in Results At Fair Value with Changes in Other Comprehensive Income (FVOCI) At Amortized Cost Derivative financial instruments for hedges (1132) Restricted Financial Instruments (1138) Loan portfolio (net) (114) Current loans up to one year term Current loans more than one year term Overdue loans (Estimate for impairment loss) Accounts receivable (net) (125) Physical and intangible assets (net) (13) Extraordinary assets (net) (122) Long-term assets held for sale (127) Investments in shares (Net) (126) Other Assets (121, 123, 124) (1) Total Assets

LIABILITIES
Financial liabilities at fair value with changes in results (net) (210001, 210002, 210003)

Derivatives for hedge (210004)
Financial liabilities at amortized cost (net) (211) Deposits (2110, 2111, 2112, 2113, 2114) (1) Repurchase agreements (2115) Loans (2116, 2117, 2118) Own issuance titles (212001, 212003, 212004, 212006, 212007, 212008) (5) Convertible bonds into shares Convertible loans into shares up to one year term (211611) Convertible bonds into shares (212002,212005)

Note 3/
(Current Year) (Previous Year)

Demand obligations (213)
Accounts payable (222, 223) (1)
Provisions (2240)
Other liabilities (221, 2242,225,4129) (1) (3) Subordinated loans (2119) Total Liabilities

EQUITY
Share Capital (311) 4/

Reserves (313)
Capital
Other reserves
Results to apply (314)
Profits (Losses) of previous exercises
Profits (Losses) of the current exercise
Share premiums (315)
Restricted equity
Non-distributable profits (321)
Donations (322)
Accumulated other comprehensive income (3230, 3231) Items that will not be reclassified to results Items that will be reclassified to results Non-controlling interests Total Equity Total Liabilities and Equity

1/ Indicate the name of the entity when it is separate financial statements or the name of the financial group or financial conglomerate when it is consolidated financial statements of the group or financial conglomerate. 2/ Indicate "Separate Statement of Financial Position" or "Consolidated Statement of Financial Position", as applicable. 3/ In the Financial Statements, reference will be made to the note number. As applicable to each element of the Financial Statements. 4/ In the case of Cooperative Banks, the rubro 312 Capital contributions pending to formalize must be included, and describe this situation in the note relative to relevant facts.

Annex No.2

NAME OF THE ENTITY PUBLISHING 1/
Statement of Comprehensive Income 2/
Years ended December 31 of (current year) and of (previous year) Expressed in thousands of United States dollars

Note 3/
(Current Year) (Previous Year)

Interest Income
Financial assets at fair value with changes in results (6110 02 0100, 6110 02 0200, 6110 02 0300) Financial assets at fair value with changes in other comprehensive income (6110 02 0400) Financial assets at amortized cost (6110 02 0500, 6110 02 0600, 6110 03 0100,611004) Loan portfolio (6110 01 0100) Other interest income (6110 03 0200, 6210 01 0300) (Interest Expenses) (Deposits) (7110 01) (Financial liabilities at fair value with changes in results) (7110 05) (Own issuance titles) (7110 04 0100, 7110 04 0300) (5) (Loans) (7110 02 0100,7110 03 0100) (Other interest expenses) (7110 07 0100, 711008, 7110 09 0100, 7110 10) NET INTEREST INCOME Gain (Loss) on changes in fair value of financial assets and liabilities, Net (6111, 7111) Gain (Loss) on impairment of financial assets other than credit risk assets, Net (6112 01, 7112 01) Gain (Loss) on impairment of credit risk financial assets, Net (6112 02, 7112 02, 7120) (1) Gain or (Loss) on reversal of (impairment) of extraordinary assets value, Net (6310 09 0300, 7214 01) Gain (Loss) on reversal of (impairment) of properties and equipment value, Net (6310 09 0200, 7214 02) Gain (Loss) on reversal of (impairment) of other assets, Net (6310 09 0100, 6310 09 0400-(7214 03, 7214 04)) INTEREST INCOME, AFTER CHARGES FOR IMPAIRMENT Income from commissions and fees (6110 01 0200/6110 01 0700, 6210 01 0200, 6210 03 0100, 6210 04/ 6210 08, 6210 10) (2) (Expenses for commissions and fees) (7110 02 0200, 7110 03 0200, 7110 07 02 00,7110 09 0200,7110 11, 7110 13, 7210) NET INCOME FROM COMMISSIONS AND FEES Gains (Losses) on sales or disposals of financial instruments at amortized cost, net (6113 01,7113 01) Gain (Loss) on sales of assets and Discontinued Operations (6310 02, 7215) Gains (losses) generated by entities registered under the equity method (6310 07, 7211) Other financial income (expenses) (6210 01 0100, 6210 01 0400, 6210 01 0500, 6210 02, 6210 03 9700, 6210 09, 6310 01, 6310 03/6310 06, 6310 08, 6310 99), (7110 04 0200, 7110 06, 7112 03, 7112 04, 7114, 7212, 7213, 7299) (1) (2)

Note 3/
(Current Year) (Previous Year)

TOTAL NET INCOME
(Administrative Expenses)
(Expenses for officials and employees) (8110) (General Expenses) (8120) (Expenses for depreciation and amortization) (8130) (Expenses for provisions) (8140) PROFIT (LOSS) BEFORE TAX Expenses for taxes on profits (8150) PROFIT (LOSS) OF THE EXERCISE OTHER COMPREHENSIVE INCOME Items that will not be reclassified in results Surplus by revaluation Changes in fair value of financial liabilities at fair value with changes in results attributable to changes in credit risk Changes in fair value of the time value of an option of a covered item related to a transaction Changes in fair value of the term element of forward contracts of a covered item related to a transaction Taxes on items that will not be reclassified in results Items that will be reclassified in results Conversion differences of foreign business Cash flow hedge reserve Changes in fair value of debt instruments at fair value with Other Comprehensive Income. Changes in fair value of the time value of an option of a covered item related to a transaction Changes in fair value of the time value of an option of a covered item related to a period of time Changes in fair value of the term element of forward contracts of a covered item related to a transaction Changes in fair value of the term element of forward contracts of a covered item related to a period of time Taxes on items that will be reclassified in results TOTAL COMPREHENSIVE INCOME FOR THE EXERCISE Earnings per Share of continuing operations attributable to shareholders of the parent during the year (expressed in ___per share):
Basic
Diluted
Earnings per Share of discontinued operations attributable to shareholders of the parent during the year (expressed in ___per share):
Basic
Diluted

1/ Indicate the name of the entity when it is separate financial statements or the name of the financial group or financial conglomerate when it is consolidated financial statements of the group or financial conglomerate. 2/ Indicate "Separate Statement of Comprehensive Income" or "Consolidated Statement of Comprehensive Income", as applicable. 3/ In the Financial Statements, reference will be made to the note number. As applicable to each element of the Financial Statements.

Annex No.3

NAME OF THE ENTITY PUBLISHING 1/ Annex No.3
Statement of Changes in Equity 2/
Years ended December 31 of (current year) and of (previous year) (Expressed in thousands of United States dollars)

SOURCES OF CHANGES IN
EQUITY
Notes 3/
Share Capital
Capital Reserves
Other Reserves
Results to Apply
Non-distributable Profits
Donations
Other Comprehensive Income
Previous Exercises
Other Comprehensive Income of the Exercise
Non-controlling shareholders interests
Equity Total
Balance at January 1 of 20xx
US$ XX US$ XX US$ XX US$ XX US$ XX US$ XX US$ XX US$ XX US$ XX US$ XX Effect of error corrections Effect of changes in accounting policies Re-expressed Balance Issuance of shares Dividends Other Comprehensive Income:
Increases in items that will not be reclassified in results Decreases in items that will not be reclassified in results Increase in items that will be reclassified in results Reclassifications to results Other increases or (-) decreases in equity

Effect of error corrections
Effect of changes in accounting policies
Re-expressed Balance
Issuance of shares
Dividends
Other Comprehensive Income:
Increases in items that will not be reclassified in results Decreases in items that will not be reclassified in results Increase in items that will be reclassified in results Reclassifications to results Other increases or (-) decreases in equity Balance at December 31 of 20xx US$ XX US$ XX US$ XX US$ XX US$ XX US$ XX US$ XX US$ XX US$ XX US$ XX

Annex No.4

NAME OF THE ENTITY PUBLISHING 1/
Statement of Cash Flows 2/
Years ended December 31 of (current year) and of (previous year) (Expressed in thousands of United States dollars)

Note
3/
(Current Year)
(Prior Year)
A. Cash flows from operating activities:
Net income for the period (1)
Adjustments to reconcile net income with cash from operating activities: (1) Reserves for write-downs of risky credit assets (1) Reserves for write-downs of other assets (1) Share in associates (1) Depreciations (1) Amortizations (1) Gains/losses on sale and/or disposal of extraordinary assets (1) Gains/losses on sale and/or disposal of physical assets (1) Minority interest share (1) Interest and commissions receivable (1) Interest and commissions payable (1) Changes in asset accounts: (1) (Increases) decreases in Loans (Increases) decreases in Accounts receivable (1) Sales of extraordinary assets (1) (Increases) decreases in other assets (1) Changes in liability accounts: (1) Increases (decreases) in Deposits (1) Increases (decreases) in Own-issued securities (1) Increases (decreases) in Demand obligations (1) Increases (decreases) in Accounts payable (1) Increases (decreases) Other liabilities (1) Net cash used in operating activities (1) B. Cash flows from investing activities (1) (Increases) decreases in Investment financial instruments (1) Acquisition of subsidiaries net of cash acquired Disposal of subsidiaries net of cash disposed Acquisition of physical assets Proceeds from sale of physical assets Acquisition of intangibles Proceeds from sale of intangible assets Acquisition of interest in joint ventures Gains from sale of interest in joint ventures Net cash (used in) provided by investing activities

SANCTIONS

Non-compliance with the provisions contained in this Manual shall be sanctioned in accordance with what is established in the Law on Supervision and Regulation of the Financial System.
2. REPEALS

Starting from January 1, 2024, this Manual repeals the following regulations:
a) The Accounting Manual for Banks, approved in Session No. CD-55/1998 of the Superintendence of the Financial System, on August 20, 1998, whose Organic Law was repealed by Legislative Decree No. 592, which contains the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390 of February 2, 2011. b) The Accounting Manual for Cooperative Banks, approved in Session No. CD-40/2008 of the Superintendence of the Financial System, on October 8, 2008, whose Organic Law was repealed by Legislative Decree No. 592, which contains the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390 of February 2, 2011. c) Standards for the Accounting Reclassification of Loans and Contingencies of Banks (NCB-005), approved in Session No. CD-71/1993, of the Superintendence of the Financial System, on December 17, 1993, whose Organic Law was repealed by Legislative Decree No. 592, which contains the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390 of February 2, 2011. d) Standards for the Accounting of Interest on Active and Passive Operations of Banks (NCB-006), approved in Session No. CD-71/1993, of the Superintendence of the Financial System, on December 17, 1993, whose Organic Law was repealed by Legislative Decree No. 592, which contains the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390 of February 2, 2011. e) Standards for the Accounting Recording of Stock Market Repo Operations Performed by Banks (NCB-011), approved in Session No. CD-72/1998, of the

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-11/2022
NCF-01
ACCOUNTING MANUAL FOR DEPOSIT-TAKING INSTITUTIONS AND HOLDING COMPANIES Approval: 30/12/2022 Validity: 16/01/2023 Superintendence of the Financial System, on October 22, 1998, whose Organic Law was repealed by Legislative Decree No. 592, which contains the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390 of February 2, 2011. f) Standards for the Accounting of Extraordinary Assets of Banks (NCB-013), approved in Session No. CD-17/1999, of the Superintendence of the Financial System, on February 25, 1999, whose Organic Law was repealed by Legislative Decree No. 592, which contains the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390 of February 2, 2011. g) Standards for the Accounting and Valuation of Securities of the Investment Portfolio of Banks (NCB-016), approved in Session No. CD-42/2000, of the Superintendence of the Financial System, on August 24, 2000, whose Organic Law was repealed by Legislative Decree No. 592, which contains the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390 of February 2, 2011. h) Standards for the Preparation of Financial Statements of Banks (NCB-017), approved in Session No. CD-46/2000 of the Superintendence of the Financial System, on September 7, 2000, whose Organic Law was repealed by Legislative Decree No. 592, which contains the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390 of February 2, 2011. i) Standards for the Publication of Financial Statements of Banks (NCB-018), approved in Sessions No. CD-46/2000 and 59/2000 of the Superintendence of the Financial System on September 7, 2000 and November 8, 2000, respectively, whose Organic Law was repealed by Legislative Decree No. 592, which contains the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390 of February 2, 2011. j) Standards for the Preparation of Consolidated Financial Statements of Conglomerates (NCB-019), approved in Session No. CD-46/2000 of the Superintendence of the Financial System on September 7, 2000, whose Organic Law was repealed by Legislative Decree No. 592, which contains the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390 of February 2, 2011.

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-11/2022
NCF-01
ACCOUNTING MANUAL FOR DEPOSIT-TAKING INSTITUTIONS AND HOLDING COMPANIES Approval: 30/12/2022 Validity: 16/01/2023 k) Standards for the Publication of Financial Statements of Financial Conglomerates (NCB-020), approved in Session No. CD-59/2000 of the Superintendence of the Financial System on November 8, 2000, whose Organic Law was repealed by Legislative Decree No. 592, which contains the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390 of February 2, 2011. l) Standards for the Accounting of Bank Commissions on Loans and Contingent Operations (NCB-021), approved in Sessions No. CD-50/2004 and 14/2005, of the Superintendence of the Financial System, on December 22, 2004 and March 30, 2005, respectively, whose Organic Law was repealed by Legislative Decree No. 592, which contains the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390 of February 2, 2011. m) Standards for the Accounting of Interest on Active and Passive Operations of Non-Bank Financial Intermediaries (NCNB-001), approved in Session No. CD-43/2001, of the Superintendence of the Financial System, on September 5, 2001, whose Organic Law was repealed by Legislative Decree No. 592, which contains the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390 of February 2, 2011. n) Standards for the Accounting of Commissions on Loans and Contingent Operations of Non-Bank Financial Intermediaries (NCNB-003), approved in Session No. CD-43/2001, of the Superintendence of the Financial System on September 5, 2001, whose Organic Law was repealed by Legislative Decree No. 592, which contains the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390 of February 2, 2011. o) Standards for the Accounting Recognition of Losses in Loans and Accounts Receivable of Non-Bank Financial Intermediaries (NCNB-005), approved in Session No. CD-43/2001 of the Superintendence of the Financial System, on September 5, 2001, whose Organic Law was repealed by Legislative Decree No. 592, which contains the Law on Supervision and Regulation of the Financial System, published in the Official Journal No. 23, Volume No. 390 of February 2, 2011. p) Standards for the Accounting Reclassification of Loans and Contingencies of Non-Bank Financial Intermediaries (NCNB-006), approved in Session

To comply with the provisions established in this Accounting Manual, entities subject to its application are obligated to the following:
a) Submit to the Superintendence of the Financial System the adaptation plan for this Accounting Manual within 60 days following its validity, which must be implemented during the year 2023 and contain at minimum the following:
i. Detail of Accounting Policies to be prepared;
ii. Detail of reporting to be issued;
iii. Schedule for updating accounting-related computer systems;
iv. Schedule for the development of functional tests of the accounting system, and systems linked to accounting;
v. Procedures related to the evaluation of recognition, quantification, recording, and disclosure of the elements that make up the financial statements to be issued;
vi. List of adjustments that will impact results to be applied;
vii. Functional tests in the sending of accounting information in the systems that the Superintendence of the Financial System makes available for the submission of financial information;
viii. Plan for the elaboration of the expected loss methodology for the portfolio of financial instruments.
b) Quarterly, entities must send the evaluation and execution of the Implementation Plan; communicating its update when applicable;

UNFORESEEN ASPECTS

Unforeseen aspects in the matter of regulation in this Manual will be resolved by the Central Bank of El Salvador through its Committee of Standards.

VALIDITY
This Accounting Manual for Deposit-Taking Institutions and Holding Companies will enter into force starting from January 16, 2023.

The provisions contained in the regulations detailed in section 2. REPEALS of this chapter will continue to be mandatory during the fiscal year 2023, a period in which the adaptation plan of this Accounting Manual will be implemented.

Lineage: No known changes