Circular LISOL 1 - 254. Relationship of Fixed Assets and Other Concepts. Computation of Provisions for Credit Risk on Normal Portfolio

1999 - Year of Exportation

CENTRAL BANK OF THE ARGENTINE REPUBLIC

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COMMUNICATION "A" 2966 I 02/08/99

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TO FINANCIAL ENTITIES:
Ref.: Circular
LISOL 1 - 254.
Relationship of Fixed Assets and Other Concepts. Computation of Provisions for Credit Risk on Normal Portfolio

We address you to inform you that this Institution adopted the following resolution:

"- Replace, with effect from August 1999, points 3.1.1. and 3.2. of Section 3. of the norms on the relationship for fixed assets and other concepts with the following:

"3.1.1. Basic Amounts.
Fixed assets shall be computed based on the balances at the end of each month (principal and interest, if applicable), net of accumulated depreciation and amortization and the provisions for credit risk and devaluation attributable to them, without deducting 50% of the minimum required amount of the provision for credit risk on the portfolio corresponding to debtors classified as "in normal situation" or "normal compliance" and those covered by preferred "A" guarantees."

"3.2. Other Concepts.
In the case of financing to related clients, the balance at the end of each month or the highest amount recorded for that assistance for each client during the respective period, whichever is greater, shall be considered, computing for this purpose principal, interest, premiums, and quotation differences, as applicable, net of provisions for credit risk and devaluation attributable to them, without deducting 50% of the minimum required amount of the provision for credit risk on the portfolio corresponding to debtors classified as "in normal situation" or "normal compliance" and the financing that is covered by preferred "A" guarantees."

In attachment, we send you the sheets that, in replacement of those previously provided, correspond to be incorporated into the ordered text of the norms on the matter.

We greet you very attentively.

CENTRAL BANK OF THE ARGENTINE REPUBLIC
Juan Carlos Isi Alfredo A. Besio
Deputy Manager of Regulatory Regime Manager of Norms for Financial Entities

ANNEX: 3 sheets

B.C.R.A. RELATIONSHIP FOR FIXED ASSETS AND OTHER CONCEPTS
Section 3. Computation of Concepts.
3.1. Fixed Assets.
3.1.1. Basic Amounts.
Fixed assets shall be computed based on the balances at the end of each month (principal and interest, if applicable), net of accumulated depreciation and amortization and the provisions for credit risk and devaluation attributable to them, without deducting 50% of the minimum required amount of the provision for credit risk on the portfolio corresponding to debtors classified as "in normal situation" or "normal compliance" and the financing that is covered by preferred "A" guarantees.
3.1.2. Deductions.
3.1.2.1. Debts arising from the acquisition of fixed assets, contracted with suppliers or corresponding to loans obtained with specific and proven allocation of funds, not exceeding the residual value of the respective asset.
3.1.2.2. Advances received for the sale of said assets, not exceeding the residual value of the respective asset.
3.1.2.3. Liabilities assumed with the National Treasury for the deferral of tax payments made, due to tax franchises granted by regional or sectoral promotion regimes, through the acquisition of social shares, up to one year after the expiration of legal impediments to the free availability of the shares.
Version: 3rd Communication "A" 2966 Validity:
02.08.99

B.C.R.A.
RELATIONSHIP FOR FIXED ASSETS AND OTHER
CONCEPTS
Section 3. Computation of Concepts.
3.2. Other Concepts.
In the case of financing to related clients, the balance at the end of each month or the highest amount recorded for that assistance for each client during the respective period, whichever is greater, shall be considered, computing for this purpose principal, interest, premiums, and quotation differences, as applicable, net of provisions for credit risk and devaluation attributable to them, without deducting 50% of the minimum required amount of the provision for credit risk on the portfolio corresponding to debtors classified as "in normal situation" or "normal compliance" and the financing that is covered by preferred "A" guarantees.
3.3. Exclusions.
Deductible concepts to determine computable net worth liability. Version: 3rd Communication "A" 2966 Validity:
02.08.99

B.C.R.A. ORIGIN OF THE PROVISIONS INCLUDED IN THE ORDERED TEXT OF THE NORMS ON THE RELATIONSHIP FOR FIXED ASSETS AND OTHER CONCEPTS ORDERED TEXT ORIGIN NORM
Section Point Paragraph Comm. Cap./ Point Paragraph
Annex
Observations
1. 1.1.1. "A" 2736 unique 1.6.
1. 1.1.2. a
1.1.6.
"A" 2736 unique 1.1. a
1.5.
According to Comm. "A"
2753
1. 1.2.1.1. "A" 2736 unique 1.5.3. According to Comm. "A"
2753
1. 1.2.1.2. "A" 2753 1. Includes clarification
interpretative and modification by
Comm. "A" 2832
2. 2.1. "A" 2736 1. 1st
3. 3.1.1. "A" 2736 unique 1. last According to Comm. "A"
2966
3. 3.1.2.1. "A" 2736 unique 3.
and
3.1.2.2.
"A" 414
LISOL-1
VII 5.2.2.
3. 3.1.2.3. "A" 2736 unique 3.
3. 3.2. "A" 2736 1. 3rd According to Comm. "A"
2966. Includes
interpretative clarification
3. 3.3. "A" 2736 1. 2nd
4. 4.1. "A" 2736 1. 1st
5. 5.1.1. "A" 2736 1. last
5. 5.1.2. a
5.1.4.
"A" 414
LISOL-1
V 3.2.2. a
3.2.4.
According to Comm. "A"
2019
5. 5.1.5. "B" 5159
5. 5.2.1. "A" 2241
CREFI-2
I 3.2.3.
5. 5.2.2. "A" 2241
CREFI-2
II 1.2.
5. 5.2.3. "A" 2241
CREFI-2
III 1.1.
5. 5.2.4. "A" 2241
CREFI-2
IV 1.3.
5. 5.3. "A" 414
LISOL-1
V 4. Modified by the
Comm. "A" 817
6. 6.1. "A" 2227 unique 5.2.1. last According to Comm. "A"
2649
6. 6.2. "A" 2227 unique 5.1.8. According to Comm. "A"
2736
"A" 2227 unique 5.2.2.