Circular Letter CVM/SNC/SEP No. 01/2010

CIRCULAR LETTER/CVM/SNC/SEP/No. 01/2010
Rio de Janeiro, March 31, 2010
Subject: Clarifications regarding the presentation of Quarterly Information Forms – ITR and Interim Financial Statements during the year 2010.

Dear Sirs,

This Circular Letter aims to provide public companies and their respective independent auditors with clarifications regarding the application of CVM Deliberation No. 603, of November 10, 2009, which provides for the presentation of Quarterly Information Forms – ITRs relative to the 2010 fiscal year and for the early adoption of accounting standards that must be in effect from 2010.

It should be noted in advance that, in issuing Deliberation No. 603/2009, the CVM considered the following facts: a) that the joint CVM/CPC Work Plan announced at the beginning of 2009 provided for the issuance, by September 30, 2009, of all Technical Pronouncements necessary to complete convergence to international accounting standards; b) unforeseen events in the formulation of these standards prevented the Accounting Pronouncements Committee - CPC and the CVM from finalizing their Work Plan by the scheduled date; c) due to these unforeseen events, the CPC ended up advancing the issuance of several Technical Interpretations to 2009, expanding the set of new standards to be mandatorily implemented in 2010; and d) the final issuance of the set of Pronouncements, Interpretations, and Orientations, as well as their final approval by the CVM, occurred only at the end of December 2009.

Under this context, Article 1 of the Deliberation provides as follows:

“Art. 1. It is optional for public companies to present their Quarterly Information Forms – ITR during the 2010 fiscal year in accordance with the accounting standards in effect until December 31, 2009.”

Thus, the CVM, by introducing the option provided for in CVM Deliberation 603, provided that the requirements of Article 2 of that Deliberation are met, extended the mandatory application of the Pronouncements, Interpretations, and Orientations of the CPC issued and approved by the CVM in 2009 to December 2010, including, evidently, Pronouncement CPC 21, which deals with interim statements, approved by CVM Deliberation No. 581/2009. In this way, the ITRs referring to the 2010 fiscal year may be prepared in accordance with accounting practices in effect until December 31, 2009, with the application of the aforementioned CPC Pronouncements, Interpretations, and Orientations for the 2010 ITRs and interim financial statements being optional, provided they are applied in their entirety.

To the same effect, with the issuance today of CVM Deliberation No. 626, this extension is also applicable to interim financial statements, including those prepared for registration purposes, provided for in item “b”, paragraph VIII, Article 1, annex 3, of CVM Instruction No. 480/2009.

In these cases, considering that the CPC Pronouncements, Interpretations, and Orientations addressed herein will be applied mandatorily only for financial statements of fiscal years ending from December 2010 inclusive, the retrospective adjustment provided for in Pronouncement CPC 23, approved by CVM Deliberation No. 592/2009, must be made, including the 2010 ITRs. It should be observed, however, that the restatement applies only to ITRs and not to other interim statements.

A public company that does not use the option provided for in Article 1 of CVM Deliberation No. 603/2009 must present its ITRs and, where applicable, the interim financial statements specially prepared for registration purposes, applying fully the CPC Pronouncements, Interpretations, and Orientations issued and approved by the CVM in 2009, and in this case, extended to the 2008 financial statements presented, for comparative purposes, together with the 2009 statements.

Sincerely,

ELIZABETH LOPEZ RIOS MACHADO
Superintendent of Corporate Relations

ANTÔNIO CARLOS DE SANTANA
Superintendent of Accounting Standards and Auditing