Accounting Manual for Stock Exchanges — SSF — SV

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

CONSIDERING:

I. That in accordance with the Law on Supervision and Regulation of the Financial System, the Financial Supervision and Regulation System is created, which is constituted by the Central Reserve Bank of El Salvador and the Superintendence of the Financial System, with the former, through the Committee of Standards, being responsible for approving the necessary technical regulatory framework for the adequate application of the laws that regulate the members of the financial system and other supervised entities.
II. 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 carry out individual and consolidated supervision of the members of the financial system, as well as the supervision of other regulated subjects.
III. 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.
IV. 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 entities the adequate accounting disclosure of the economic and financial reality, having to have the backing of their internal and external audits.
V. That article 99, letter c) of the Law on Supervision and Regulation of the Financial System, establishes that it corresponds to the Committee of Standards of the Central Reserve Bank, the approval of the Technical Standards for the preparation, presentation and dissemination of the Financial Statements and supplementary information of the members of the financial system; the determination of accounting obligations and the principles in accordance with which they must keep their accounts and the establishment of criteria for the valuation of assets, liabilities and the constitution of provisions and reserves for risks.
VI. That in accordance with article 101, fourth paragraph of the Law on Supervision and Regulation of the Financial System, the powers to approve, modify and repeal technical norms that must be complied with by the members of the financial system and other supervised entities are transferred to the Central Reserve Bank of El Salvador.

THEREFORE,

by virtue of the regulatory powers conferred upon it by article 99 of the Law on Supervision and Regulation of the Financial System, AGREES, to issue the following:
ACCOUNTING MANUAL FOR STOCK EXCHANGES

CONTENTS

CHAPTER I
GENERAL PROVISIONS
Comprises the general application provisions in the recording of operations of Stock Exchanges.
CHAPTER II
FINANCIAL STATEMENTS TO BE SUBMITTED TO THE SUPERINTENDENCE OF THE FINANCIAL SYSTEM AND PUBLISHED Comprises the provisions relating to the submission of financial statements to the Superintendence of the Financial System, the publication thereof, among other provisions.
CHAPTER III
CHART OF ACCOUNTS
Comprises the list of accounts provided for the accounting of the respective operations.

CHAPTER IV
ACCOUNT APPLICATION MANUAL
Comprises the description of the concept of the accounts and the main applications by which they will be affected.

CHAPTER V
FINANCIAL STATEMENTS
Includes the models of Financial Statements.
CHAPTER VI
OTHER PROVISIONS AND VALIDITY
Comprises provisions corresponding to sanctions, repeals, aspects not foreseen and validity.

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-11/2024
NCF-09
ACCOUNTING MANUAL FOR STOCK EXCHANGES Approval: 12/19/2024 Validity: 01/03/2025
CHAPTER I
GENERAL PROVISIONS
A. OBJECTIVE
The objective of this manual is to provide Stock Exchanges with the technical accounting treatment, which allows the application of International Financial Reporting Standards, regarding the uniform recording of their transactions, preparation and presentation of their financial statements and disclosure of their notes, thus providing a useful instrument for the analysis of information and decision-making by administrators, shareholders, the public using the services of the Superintendence of the Financial System and other interested parties. B. APPLICATION

1. This document and the provisions contained therein, shall be applied by all entities authorized to operate as Stock Exchanges.
2. The accounts contained in the Manual do not imply by themselves an authorization to carry out the operations to which they refer, entities must adhere to the current legal and regulatory standards.
3. Stock Exchanges may not use new accounts or primary and secondary sub-accounts without prior written authorization from the Central Reserve Bank, through its Committee of Standards. However, they may open additional analytical accounts to those established in the Chart of Accounts, from the eighth and ninth digits, to the degree and detail they consider necessary for a better recording and control of their operations.
4. To incorporate additional analytical accounts or accounts with more digits in the Chart of Accounts, intended to identify banking entities, the codes and denominations established by the Central Reserve Bank, through its Committee of Standards, must be used.
5. Stock Exchanges must submit the monthly trial balance electronically, with the main accounts and all corresponding sub-accounts, up to the last level of information, in accordance with what is established in letter D of Chapter II of this Accounting Manual.
6. The own Investment portfolio must be valued daily, in such a way that accounting records are posted timely with the variations in the value of said assets. All of the above in accordance with International Financial Reporting Standards.
C. STRUCTURE, CODIFICATION AND DENOMINATION
1. DEFINITION OF COMPONENTS OF THE CHART STRUCTURE
The Chart has been structured on the basis of a decimal coding system, with an account denomination that contemplates different levels of aggregation, distinguishing:

Element: Identified by the first digit
Item: Identified by the first two digits
Account: Identified by the first three digits
Sub-account: Identified by the first four digits Sub-subaccount: Identified by the first five digits Detail: Identified by the first seven digits Sub-detail: Identified by the first nine digits
2. ACCOUNTING ELEMENTS
The elements defined within the structure are associated with the rights, obligations and equity of Stock Exchanges, as well as with the rights and obligations of clients intermediated through the exchanges and changes in such elements. The established elements are presented below. CODE DESCRIPTION 1 ASSET 2 LIABILITY 3 EQUITY 4 EXPENSES 5 INCOME 6 OWN COMMITMENT AND CONTROL CONTINGENCIES 7 CREDITOR COMMITMENT AND CONTROL CONTINGENCIES 8 DEBTOR STOCK EXCHANGE DEPOSIT, CUSTODY AND CONTROL ACCOUNTS OF SECURITIES 9 CREDITOR STOCK EXCHANGE DEPOSIT, CUSTODY AND CONTROL ACCOUNTS OF SECURITIES
3. GROUPING ITEMS
Identified by the second digit, starting from one (1), these items are detailed below:
CODE DESCRIPTION
1 ASSET
11 CURRENT ASSET
12 NON-CURRENT ASSET
2 LIABILITY
21 CURRENT LIABILITY
22 NON-CURRENT LIABILITY
3 EQUITY
31 CAPITAL

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-11/2024
NCF-09
ACCOUNTING MANUAL FOR STOCK EXCHANGES Approval: 12/19/2024 Validity: 01/03/2025 CODE DESCRIPTION 32 CAPITAL RESERVES 33 REVALUATIONS 34 RESULTS 35 RESTRICTED EQUITY 36 OPTIONS ON SHARE-BASED PAYMENTS 4 EXPENSES 41 OPERATING EXPENSES 42 FINANCIAL EXPENSES 43 EXTRAORDINARY EXPENSES 44 INCOME TAX 5 INCOME 51 OPERATING INCOME 52 FINANCIAL INCOME 53 EXTRAORDINARY INCOME 6 OWN COMMITMENT AND CONTROL CONTINGENCIES 61 DEBTOR COMMITMENT CONTINGENT ACCOUNTS 62 CONTROL ACCOUNTS 7 CREDITOR COMMITMENT AND CONTROL CONTINGENCIES 71 CONTINGENT AND COMMITMENT ACCOUNTS 72 CREDITOR CONTROL ACCOUNTS 8 DEBTOR STOCK EXCHANGE DEPOSIT, CUSTODY AND CONTROL ACCOUNTS OF SECURITIES 81 FINANCIAL SETTLEMENT AND STOCK EXCHANGE OPERATIONS ACCOUNTS. 9 CREDITOR STOCK EXCHANGE DEPOSIT, CUSTODY AND CONTROL ACCOUNTS OF SECURITIES 91 OBLIGATIONS FOR FINANCIAL SETTLEMENT AND STOCK EXCHANGE OPERATIONS.

LEDGER ACCOUNTS
Group homogeneous economic events, identified by the third digit starting with zero (0), allowing a maximum of ten accounts to be grouped for each item of the accounting elements, an example of account coding is presented below:

CODE DESCRIPTION
110 CASH AND ITS EQUIVALENTS
111 BANKS AND OTHER FINANCIAL INSTITUTIONS
112 RESTRICTED AVAILABLE

SUB-ACCOUNTS
Identified by the fourth digit, they represent aggregations of economic events that provide valuable financial information, coded from the zero (0) digit, allowing up to ten sub-accounts to be generated from the ledger account, an example of coding is presented below:
CODE TYPE DESCRIPTION
110 ACCOUNT CASH AND ITS EQUIVALENTS
1100 SUB-ACCOUNT PETTY CASH
1101 SUB-ACCOUNT GENERAL CASH
SUB-SUBACCOUNTS
Identified by the fifth digit, they represent aggregations of economic events that provide financial information, allowing up to ten sub-subaccounts to be generated, grouped within the sub-accounts; this level of coding will be used in the present structure only for the following group of accounts, sub-accounts and sub-subaccounts:
CODE TYPE DESCRIPTION
620 ACCOUNT OBLIGATIONS FOR SECURITIES DELIVERED IN SUB- CUSTODY 6200 SUB-ACCOUNT FIXED INCOME SECURITIES 62000 SUB-SUBACCOUNT OWN 62001 SUB-SUBACCOUNT THIRD PARTIES 6201 SUB-ACCOUNT VARIABLE INCOME SECURITIES 62010 SUB-SUBACCOUNT OWN 62011 SUB-SUBACCOUNT THIRD PARTIES 720 ACCOUNT SUB-CUSTODIES OF SECURITIES 7200 SUB-ACCOUNT SUB-CUSTODIES OF FIXED INCOME SECURITIES 72000 SUB-SUBACCOUNT OWN 72001 SUB-SUBACCOUNT THIRD PARTIES 7201 SUB-ACCOUNT SUB-CUSTODIES OF VARIABLE INCOME SECURITIES 72010 SUB-SUBACCOUNT OWN 72011 SUB-SUBACCOUNT THIRD PARTIES

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-11/2024
NCF-09
ACCOUNTING MANUAL FOR STOCK EXCHANGES Approval: 12/19/2024 Validity: 01/03/2025
7. DETAIL
Identified by the seventh digit, they represent aggregations of economic events that provide valuable financial information, allowing up to 199 detail accounts to be generated, grouped within the sub-accounts and the ledger account, an example of coding is presented below:
CODE TYPE DESCRIPTION
1110 SUB-ACCOUNT BANKS AND OTHER LOCAL FINANCIAL INSTITUTIONS 1110000 DETAIL DEPOSITS IN CURRENT ACCOUNT 1110010 DETAIL DEPOSITS IN SAVINGS ACCOUNTS 1110020 DETAIL TIME DEPOSITS

SUB-DETAIL OPENING OF ANALYTICAL ACCOUNTS FOR BANKS
Bank accounts will be generated in accordance with the following list, assigning the eighth and ninth digits for their identification.
DIGITS FINANCIAL INSTITUTION
00 CENTRAL RESERVE BANK
01 AGRICULTURAL BANK S.A.
02 DAVIVIENDA SALVADORIAN BANK, S.A.
03 MORTGAGE BANK OF EL SALVADOR
04 CUSCATLAN BANK OF EL SALVADOR, S.A.
05 AGRICULTURAL PROMOTION BANK
07 CITIBANK N.A. BRANCH EL SALVADOR
08 BANK OF CENTRAL AMERICA, S.A.
09 ATLANTIDA BANK EL SALVADOR, S.A.
10 ABANK BANK EL SALVADOR, S. A.
11 CREDICOMER, S.A.
12 AZUL BANK OF EL SALVADOR, S.A.
13 PROMERICA BANK S.A.
15 NEW YORK BANK
16 STATE STREET
17 JP MORGAN
18 CLEAR STREAM BANKING
19 INDUSTRIAL BANK EL SALVADOR, S.A.
20 INTEGRAL SUPPORT BANK, S.A.

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-11/2024
NCF-09
ACCOUNTING MANUAL FOR STOCK EXCHANGES Approval: 12/19/2024 Validity: 01/03/2025 Generating the sub-detail or control analytical account immediately to the Bank that corresponds, as for example:
CODE TYPE DESCRIPTION
1110 SUB-ACCOUNT BANKS AND OTHER FINANCIAL INSTITUTIONS LOCAL 1110000 DETAIL DEPOSITS IN CURRENT ACCOUNT 111000001 AGRICULTURAL BANK ACCOUNT No. 1110010 DETAIL DEPOSITS IN SAVINGS ACCOUNTS 111001001 AGRICULTURAL BANK ACCOUNT No. If new Banks arise, they will be added through the correlation of the last assigned code. This coding is applicable to all accounts, sub-accounts and details that represent deposits of Stock Exchanges in financial institutions, whether for their own account, or for stock exchange operations. D. CLOSE OF THE ECONOMIC YEAR The economic and accounting period will comprise from January 1 to December 31 of each year.

E. ACCOUNTING RECORDS

ACCOUNTING BOOKS
The movement and balance of accounts will be recorded in the main books, and that of sub-accounts in auxiliary books that are considered necessary. The main books that must be legalized are the following:
a. Journal. b. Ledger (If they consider it convenient, they can legalize the books in one single JOURNAL - LEDGER).
c. Financial Statements Book.
Accounting records must comply with what is established in Title II, of Book Two, of the Code of Commerce, insofar as it is applicable.
In particular in the Financial Statements Book, the Balance Sheet, the Statement of Results, the Statement of Cash Flows, the Statement of Changes in Equity, the Statement of Stock Exchange Operations and of Deposit and Custody of Securities and the corresponding notes must be posted, in accordance with what is established in article 442 of the Code of Commerce. The figures posted in this book must be presented in absolute values including cents, in a comparative manner with the figures of the previous year.

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-11/2024
NCF-09
ACCOUNTING MANUAL FOR STOCK EXCHANGES Approval: 12/19/2024 Validity: 01/03/2025
2. TAX BOOKS
The books of legal requirement, in accordance with the Law on Tax on the Transfer of Movable Goods and the Provision of Services, must comply with what is established in article 141 of the Tax Code and the Fifth Section of Chapter VII of the Regulation for the application of the Tax Code, which are mentioned below:
a. Purchase Registration Book b. Sales Registration Book to the Taxpayer
c. Sales Registration Book to the Consumer
3. ADMINISTRATIVE BOOKS
Stock Exchanges must keep, legalize and complete, in addition to the accounting and tax books established above, the following books dictated by the Code of Commerce, for which case we have:
a. Minutes Book of the General Shareholders' Meeting, b. Minutes Book of the Board of Directors,
c. Shareholders Registration Book,
d. Book of Increase and decrease of capital (if applicable).
The Minutes of the General Shareholders' Meeting and of the Board of Directors, in addition to complying with what is stipulated in article 246 of the Code of Commerce, must be posted in the corresponding Legal Books no later than 15 days after said sessions are held.
4. REGARDING THE REGISTRATION OF OPERATIONS
The nature of each of the operations carried out by the entity must be respected at the time of its accounting, according to the following rules:
a. If the operations are strictly those of the entity, only those accounting accounts defined in the Balance and Statement of Results will be used, i.e. Patrimonial Accounting Accounts. b. If the operations respond to operations related to third-party accounts on deposit and custody, and settlement of operations, only those accounting accounts defined in the Statement of Stock Exchange Operations, and of deposit and custody of securities will be used.
c. At no time can Patrimonial Nature Accounts and Operational Accounts be combined in the same accounting entry.
F. INTERNAL CONTROL APPLIED TO ACCOUNTING RECORDS Accounting records must contain the necessary detail on the characteristics of assets, liabilities, commitments, income and expenses so that all the information contained in the different statements to be rendered can be derived from them clearly, which will maintain the necessary correlation both among themselves, when appropriate, as with that accounting base. The entity must maintain at all times an auxiliary detail of each of the accounting sub-accounts, in order to have an adequate integration of the records. Likewise, inventories or details of the different items will be kept, independent of the books of an obligatory nature required by Salvadoran legislation. For these purposes, entities will establish internal control systems directed to reasonably ensure the reliability of accounting records, as well as the correct integration of operations. Therefore, independent of the accounts required to form the financial statements, the details deemed necessary for the preparation of the rest of the complementary informative statements will be established, thus developing an analytical accounting that provides sufficient information for the calculation of costs and returns of the different centers, products, business lines or other aspects of interest for adequate management control.

G. REGISTRATION AND ARCHIVING OF ACCOUNTING DOCUMENTATION The operations registered in the books listed in letter E, must be backed by the corresponding supporting documentation and comply with the standards established in the Code of Commerce. Operations will be posted as they are carried out, this without prejudice to the sanctions, fines and others that Stock Exchanges may incur for such delays established in accordance with the applicable legal standards by other government entities.

H. SEPARATION OF INCOME AND EXPENSES
To associate income with the corresponding expenses, it has been segregated in the following way:
ORDINARY INCOME AND EXPENSES
Operating Income-Operating Expenses
Financial Income-Financial Expenses

EXTRAORDINARY INCOME AND EXPENSES
Extraordinary Income-Extraordinary Expenses

I. APPROVAL AND MODIFICATION OF ACCOUNTING SYSTEMS
The accounting system consists of the methods and records established to identify, gather, analyze, classify, record and report the transactions of an entity, as well as to maintain the accounting of assets, liabilities, equity, control accounts, and results of operations, and stock exchange, custody and deposit of securities accounts. The accounting system comprises:

Alameda Juan Pablo II, between 15 and 17 Av. Norte, San Salvador, El Salvador.
Tel. (503) 2281-8000 www.bcr.gob.sv
CNBCR-11/2024
NCF-09
ACCOUNTING MANUAL FOR STOCK EXCHANGES Approval: 12/19/2024 Validity: 01/03/2025 − The Chart of Accounts and Application Manual.
− Accounting records, support documents and auxiliary records.
− The accounting processing involved from the initiation of a transaction, to its inclusion in the financial statements, including the way to use computers for data processing. − The financial information process employed to prepare the entity's financial statements, including estimates and disclosures of important tables. In consideration of the above, the process to follow to request approval and/or modification to the accounting systems will be:
a) Stock Exchanges must present their request addressed to the Superintendent of the Financial System, attaching the complete accounting system requested to be authorized in original and copy, with the signature of the Legal Representative. b) If the accounting system is computerized, they must attach the information required for such systems. The minimum information to be detailed within the accounting system, for purposes of approval and modification will be:

DESCRIPTION OF ACCOUNTING SYSTEM
1.1. ENTITY GENERALITIES
Name or Trade Name, Tax Identification Number (NIT) and Taxpayer Registration Number (NRC), Address and Telephone, etc.
1.2. DATA OF REGISTRATION OF THE CONSTITUTION DEED
1.3. NAME AND REGISTRATION NUMBER OF THE EXTERNAL AUDITOR
1.4. ADOPTED ACCOUNTING POLICIES AND PROCEDURES
Consists of presenting the accounting policies and procedures that Stock Exchanges will use, in accordance with the minimum disclosures required by the Accounting Manual for Stock Exchanges and the applicable International Financial Reporting Standards.
1.5. DETAIL OF PROJECT OF NOTES TO BE USED IN THE PUBLICATION OF
FINANCIAL STATEMENTS
Consists of describing the notes to the financial statements to be prepared, in accordance with the minimum disclosures required by the Accounting Manual for Stock Exchanges and the applicable International Financial Reporting Standards.
REQUIREMENTS OF ACCOUNTING RECORDS
2.1. WAY OF KEEPING ACCOUNTING BOOKS

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