RegAlertRule · BCB · 30 Jul 1997 · Circular 2770
Circular No. 2770 — Accounting Registration of Swap Operations
Institutions must register swap reference values in clearing accounts, recognize income or expense differentials individually by contract, and evaluate contracts at market value using mark-to-market principles, excluding those with guarantees. Prohibited actions include offsetting receivables against payables or income against expenses. Adjustments to previously registered values are permitted within the same semester for the same contract. Institutions must compute amounts received by client under SWAP OPERATIONS - DIFFERENTIAL TO BE RECEIVED to verify compliance with risk diversification limits. This circular enters into force on 01.08.97, revoking Circular No. 2.402 of 13.01.94.
CIRCULAR NO. 002770
Dispõe sobre o registro contábil das operações de "swap".
The Collegiate Board of the Central Bank of Brazil, in a session held on 30.07.97, based on Article 4, item XII, of Law No. 4.595 of 31.12.64, by competence delegated by the National Monetary Council, by act of 19.07.78, and having in view the provisions of Resolution No. 2.399 of 25.06.97,
DECIDED:
Art. 1 Establish the following procedures for the registration of swap operations:
I - the reference value of the contracts must be accounted for in clearing accounts;
II - the differential to be received or paid must be recognized in accounting in income statement accounts as income or expense, individualized by contract, in counterpart to the respective equity accounts, observing the procedures for monthly appropriation of results;
III - each swap contract, except those with guarantees and third parties, must be evaluated at market value for the remaining term of the operation, discounting its projected value at maturity by the market rate, according to the "mark to market" concept, and registering the corresponding amount in the appropriate clearing account.
Paragraph 1 It is prohibited to offset amounts to be received with amounts to be paid, income with expenses, and other values related to the operations in question.
Paragraph 2 In the calculation of monthly results, adjustment of previously registered values is permitted, provided that within the same semester and related to the same contract.
Art. 2 Reduce, to 0% (zero percent), the weighting factor of the title SWAP OPERATIONS - DIFFERENTIAL TO BE RECEIVED, code 1.8.4.53.00-3, contained in the Asset Classification Table annexed to the Regulation Annex IV to Resolution No. 2.099 of 17.08.94, with the wording given by Article 1 of Circular No. 2.568 of 04.05.95.
Art. 3 Include, in the Asset Classification Table annexed to the Regulation Annex IV to Resolution No. 2.099 of 17.08.94, with the wording given by Article 1 of Circular No. 2.568 of 04.05.95, with a weighting factor of 100% (one hundred percent), the subtitle Positive Market Value of Swap, code 3.0.6.50.20-0.
Art. 4 The amounts to be received, by client, registered in the title SWAP OPERATIONS - DIFFERENTIAL TO BE RECEIVED, must be computed for the purpose of verifying compliance with the risk diversification limit.
Art. 5 This Circular enters into force on 01.08.97, when Circular No. 2.402 of 13.01.94 shall be revoked.
Brasília, July 30, 1997
Alkimar Ribeiro Moura
Director
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- Obligation 6
- Permission 1
- Definition / condition 4
- background, boilerplate
Lineage: Amended
A newer document in RegAlert amends this one; it applies as amended.
The links and the sentences they come from (5)
- Supersedes
“when Circular No. 2.402 of 13.01.94 shall be revoked.”
- Amended by
“Circular 2,328 of July 7, 1993, Art. 1 of Circular 2,583 of June 21, 1995, and Arts. 1 and 4 of Circular 2,770 of July 30, 1997, are hereby repealed”
- Amends
- Resolution No. 2.099 dated 1994-08-17Not in RegAlert
“contained in the Asset Classification Table annexed to the Regulation Annex IV to Resolution No. 2.099 of 17.08.94”
- Issued under
“based on Article 4, item XII, of Law No. 4.595 of 31.12.64”
- Act No. 19.07.78 dated 1978-07-19Not in RegAlert
“by act of 19.07.78”
Timeline
Amended 1 time · last 2002-01-30
- 2002-01-30
BCBCircular No. 3082 — Establishes and Consolidates Criteria for the Accounting Recording and Valuation of Derivative Financial Instrumentsamends
This document supersedes: Circular No. 2402 — Establishes procedures for the registration and operational limits of swap operations
What changed in the obligations
Against Circular No. 2402 — Establishes procedures for the registration and operational limits of swap operations (1994-01-13)
1 new obligation · 1 changed obligation
4 obligations are the same in both texts.
Changed (1)
- What must be done
- Before
- II - revenues and expenses must be recognized as effective, individualized by contract, in counterpart to their respective balance sheet accounts, observing the procedures for monthly appropriation of results.
- Now
- Art. 1 Establish the following procedures for the registration of swap operations: II - the differential to be received or paid must be recognized in accounting in income statement accounts as income or expense, individualized by contract, in counterpart to the respective equity accounts, observing the procedures for monthly appropriation of results;
New in this text (1)
- Art. 4 The amounts to be received, by client, registered in the title SWAP OPERATIONS - DIFFERENTIAL TO BE RECEIVED, must be computed for the purpose of verifying compliance with the risk diversification limit.
“Not carried over” means the sentence has no counterpart in this text; the rule can still be in force in another text.
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