CMN Resolution No. 4,924 — General Principles for Accounting Recognition, Measurement, Recording, and Disclosure by Financial Institutions

CMN Resolution No. 4,924

RESOLUTION CMN
NO. 4,924, OF JUNE 24, 2021

Establishes the general principles for accounting recognition, measurement, recording, and disclosure by financial institutions and other institutions authorized to operate by the Central Bank of Brazil.

The Central Bank of Brazil, under the terms of Art. 9 of Law No. 4,595, of December 31, 1964, makes public that the National Monetary Council, in a session held on June 24, 2021, based on Arts. 4, items VIII and XII, and 31 of the aforementioned Law and considering the provisions of Art. 61 of Law No. 11,941, of May 27, 2009,

RESOLVES:

CHAPTER I
OF THE OBJECT AND SCOPE OF APPLICATION

Art. 1. This Resolution establishes the general principles for accounting recognition, measurement, recording, and disclosure by financial institutions and other institutions authorized to operate by the Central Bank of Brazil.

Sole Paragraph. The provisions of this Resolution do not apply to consortium administrators and payment institutions, which must observe the regulation issued by the Central Bank of Brazil, in the exercise of their legal powers.

Sole Paragraph. The provisions of this Resolution do not apply to consortium administrators, payment institutions, securities brokerage companies, securities distribution companies, and currency brokerage companies, which must observe the regulation issued by the Central Bank of Brazil in the exercise of their legal powers. (Redacted, effective from 1/3/2024, by CMN Resolution No. 5,116, of 1/25/2024.)

CHAPTER II
OF ACCOUNTING RECOGNITION, MEASUREMENT, AND DISCLOSURE

Section I
Of the Technical Pronouncements of the Accounting Pronouncements Committee

Art. 2. The institutions mentioned in Art. 1 must observe in accounting recognition, measurement, and disclosure the following technical pronouncements of the Accounting Pronouncements Committee (CPC):

I - Technical Pronouncement
CPC 00 (R2) – Conceptual Framework for Financial Reporting, approved on November 1, 2019;

II - Technical
Pronouncement CPC 01 (R1) – Impairment of Assets, approved on August 6, 2010;

III - Technical
Pronouncement CPC 23 – Accounting Policies, Changes in Estimates and Errors, approved on June 26, 2009;

IV - Technical
Pronouncement CPC 46 – Fair Value Measurement, approved on December 7, 2012, in situations where the measurement at fair value of assets and liabilities is provided for in specific regulation; and

V - Technical Pronouncement
CPC 47 – Revenue from Contracts with Customers, approved on November 4, 2016.

§ 1. The technical pronouncements cited in the text of the pronouncements referred to in the main text and of the dother pronouncements received by the National Monetary Council or by the Central Bank of Brazil cannot be applied until they are also received by a specific normative act issued by these regulatory authorities.

§ 2. References to other pronouncements in the text of the pronouncements referred to in the main text must be interpreted as references to other pronouncements of the Committee that have been received by the National Monetary Council, as well as to provisions of the Accounting Standard of Institutions Regulated by the Central Bank of Brazil (Cosif), which establish accounting criteria related to the pronouncements subject to the references.

§ 3. The following are prohibited in the application of the pronouncements referred to in the main text:

I - the disclosure of combined financial statements provided for in item 3.12 of the pronouncement referred to in item I of the main text, except when provided for in the regulation issued by the National Monetary Council or by the Central Bank of Brazil;

II - the recognition of revenue arising from breakage in a contract liability provided for in item B46 of the pronouncement referred to in item V of the main text before the effective extinction of this obligation; and

III - the application of the disposition in item 29, letter “a”, of the pronouncement referred to in item V of the main text.

Section II
Of Transactions in Foreign Currency

Art. 3. Transactions carried out in foreign currency must be recognized, measured, and disclosed according to the specific regulation applicable, in accordance with the economic substance and the nature of the transaction.

Sole Paragraph. For purposes of the provisions of this Section, transactions in foreign currency are considered the transaction denominated or requiring settlement in a currency different from the national currency.

Art. 4. The institutions mentioned in Art. 1 must convert, individually, the transactions in foreign currency to the national currency:

I - at initial recognition, by applying the spot exchange rate on the date of the transaction to the amount of foreign currency; and

II - on the reference date of each trial balance or balance sheet, by the exchange rate of the respective reference date, in the conversion of monetary items and non-monetary items measured at fair value.

§ 1. For purposes of the provisions of this
Resolution, monetary items are considered the units of currency held in cash and assets and liabilities to be received or paid in a fixed or determined number of currency units.

§ 2. In the assessment of impairment by reduction in the recoverable amount of non-monetary assets in foreign currency, when required by specific regulation, the impairment loss must be determined by comparison between:

I - the carrying amount in foreign currency converted according to the exchange rate on the date of the transaction; and

II - the recoverable amount in foreign currency converted according to the exchange rate in effect on the date of its assessment.

§ 3. The adjustments due to the conversion referred to in item II of the main text must be recorded:

I - in a separate account of equity, by the net value of the tax effects, in the case of non-monetary items whose gains and losses are recognized in equity; and

II - in counterpart to the result, in other cases.

Art.
5. The institutions mentioned in Art. 1, in the conversion of transactions and of
statements in foreign currency to the national currency, must use the spot exchange rate reported by the Central Bank of Brazil for the purpose of trial balance or balance sheet.

§

1. The use of a spot exchange rate different from that provided for in the
   main text is optional, provided that this use has the purpose of:

I - eliminating or significantly reducing inconsistency of measurement or accounting recognition that may occur due to the measurement of assets or liabilities or items of income and expense on different bases; or

II - providing more reliable and relevant information to the user of the accounting information.

§ 2. The exchange rate referred to in § 1 must:

I - be publicly accessible, including its data history;

II - have a public, robust, and consistent methodology; and

III - be calculated by an independent entity, recognized in the financial market.

§ 3. The institutions mentioned in Art. 1 that use the option provided for in § 1 must:

I - do so prospectively, from the date of entry into force of this Resolution;

II - disclose, in explanatory notes, the exchange rate used in substitution for the exchange rate referred to in the main text; and

III - apply the exchange rate referred to in § 1 uniformly to all assets and liabilities and items of income and expense and consistently over time.

§ 4. The Central Bank of
Brazil may determine the alteration of the exchange rate referred to in § 1, if it is found that the rate used does not meet the provisions of this article and the other legal and regulatory provisions.

Section III
Of the measurement of assets and liabilities

Art. 6. The institutions mentioned in Art. 1, in the measurement of assets and liabilities for which there is no specific regulation issued by the National Monetary Council or by the Central Bank of Brazil, must measure:

I - assets at the lower of cost and fair value on the reference date of the trial balance or balance sheet; and

II - liabilities:

a) at the value contractually provided for the settlement of the existing obligation on the reference date of the trial balance or balance sheet; or

b) at the estimated value of the obligation on the reference date of the trial balance or balance sheet, in the case of a contract silent regarding the value of the obligation or absence of a contract.

Section IV
Of the Recognition of Revenues and Expenses

Art. 7. Revenues and expenses must be recognized pro rata temporis considering the number of calendar days.

§ 1. In the calculation of revenues and expenses of active and passive operations, the due date must be included and the date of the operation excluded.

§ 2. For the purpose of preparing trial balances and balance sheets, revenues and expenses must be computed until the last day of the civil month or semester, regardless of whether it is a business day or not, the date that will prevail in the filling of the financial statements.

CHAPTER III
OF ACCOUNTING RECORDING

Section I
General Criteria

Art. 8. Accounting recording must be:

I - complete, comprising all events, transactions, and administrative acts and facts occurring on the date to which it refers, that modify or will modify, immediately or not, the composition of the institution's assets and liabilities;

II - maintained in permanent records;

III - carried out in the national language and in national currency;

IV - effected by the 10th day of the month following the occurrence of the event, transaction, or administrative act or fact;

V - prepared in chronological order of day, month, and year; and

VI - carried out without blank spaces, interlines, smudges, erasures, or amendments.

§ 1. Simple accounting recording does not constitute a sufficiently probative element; the accounting recording must be based on valid proofs for the perfect validity of events, transactions, and administrative acts and facts.

§ 2. The institution must perform the appropriate reconciliations of accounting titles with their respective analytical controls and keep them updated, and the respective documentation must be archived for at least one year.

§ 3. In the case of accounting recording in digital form, the proof must be made through listings extracted from records in electronic files.

Art. 9. Accounting recording must contain, regarding all transactions carried out and all events, acts and administrative facts occurred:

I - the location;

II - the date;

III - the adequate identification of accounting items;

IV - the history or code of the operation history;

V - the value; and

VI - the necessary information to identify, in a unique manner, all records that make up the same accounting entry.

§ 1. If the institution uses coded histories, it must include in each daily movement the respective coding table or file containing the memory of the coding tables used.

§ 2. The documents supporting the operations subject to registration must be archived sequentially with the accounting movement, or in a separate file, electronic or physical, according to their nature, and integrate, for all purposes, the accounting movements.

Art. 10. All events, transactions, and administrative acts and facts must integrate the accounting relative to the date on which they occurred.

Art. 11. The recording must be carried out by the branch or dependency of the institution.

§ 1. The daily movement of the Service Post (PA), the Electronic Service Post (PAE), and the Disaggregated Administrative Unit (UAD) must be incorporated into the accounting of the headquarters or the branch to which they are subordinate on the same date of its occurrence.

§ 2. The centralization of the accounting of branches of the same municipality in a branch of the same location is admitted.

§ 3. If using the centralization referred to in § 2, the institution must:

I - notify the Central Bank of Brazil in advance;

II - use the same
Daily Journal or Daily Trial Balances and Balance Sheets book to record the accounting movement of the branches; and

III - keep the books recorded in one branch, to be indicated by the institution, belonging to the same municipality.

Section II
Of the Books of Recording

Art. 12. The institution must maintain, in electronic or physical form, the Daily Journal or the Daily Trial Balances and Balance Sheets book and other mandatory books, legalized in the competent body, in observance of legal and regulatory provisions.

Art. 13. The institution that adopts the Daily Journal must record the General Ledger book, in such a way as to allow the identification, at any time, of the composition of account balances.

Sole Paragraph. In the General Ledger book, elucidative histories of the events, transactions, and acts and facts registered must be prepared, with indication of the account in which it is registered and the respective counterpart.

Art. 14. The institution that adopts the Daily Trial Balances and Balance Sheets book must maintain analytical controls that allow the identification, at any time, of the composition of account balances.

Art. 15. If the institution opts to replace the Daily Journal with the Daily Trial Balances and Balance Sheets book, it must:

I - schedule so that the replacement takes place on the same date in all its dependencies; and

II - record the Daily Journal normally until the day before the date of substitution, when the closing term must be drawn up.

Art. 16. The book
Daily Trial Balances and Balance Sheets must record, in chronological order of day, month and year, the daily movement of accounting items, discriminating regarding each one of them:

I - the previous balance;

II - the debit entries and the credit entries recorded on the day; and

III - the resulting balance, with indication of creditor and debtor balances.

Art. 17. The institution that maintains centralized accounting must:

I - maintain in its branches copies of the accounting of their respective movements and of the Daily Trial Balances and Balance Sheets, in physical or electronic form; and

II - register in the books of the centralizing dependency, on June 30 and on December 31 of each year, the following documents:

a) the mandatory financial statements, accompanied by explanatory notes and the report of the independent auditor, observing the specific regulation;

b) the monthly trial balance; and

c) the balance sheet and the income statement of the headquarters and of each of the branches.

Sole Paragraph. The documents referred to in item II of the main text must be signed by the director responsible for the accounting of the institution and by a legally qualified accountant.

Art. 18. The institution that maintains decentralized accounting must possess for the headquarters and for each one of the branches the books referred to in Art. 13.

Sole Paragraph. The books referred to in the main text must:

I - have the opening and closing terms signed by a legally qualified accountant; and

II - be legalized in the competent body, in observance of legal and regulatory provisions.

CHAPTER IV
OF GENERAL AND FINAL PROVISIONS

Art. 19. The provision of inaccurate information, the lack or delay of accounting reconciliations, and the accounting recording maintained late for a period exceeding 15 (fifteen) days, subsequent to the closing of each month, or processed in disagreement with the norms issued by the National Monetary Council or by the Central Bank of Brazil, place the institution, its administrators, members of the board of directors, the board of administration, the fiscal council, the audit committee, and other bodies provided for in the bylaws or articles of association of the institution subject to applicable penalties, in accordance with the law.

Art. 20. Observing the specific legal and regulatory provisions relating to recording, the form of accounting classification of revenues or expenses and assets or liabilities does not alter their characteristics for fiscal and tax purposes, which are governed by their own regulation.

Art. 21. The institutions must designate before the Central Bank of Brazil a director, technically qualified, responsible for compliance with the norms relating to recognition, measurement, recording, and accounting disclosure.

Sole Paragraph. The designated director is responsible for the information provided and for the occurrence of fraud, negligence, imprudence, or incompetence in the exercise of his functions, without prejudice to the application of the penalties provided for in the legislation in force.

Art. 22. For purposes of classification, measurement, recognition, accounting recording, and disclosure, the fiscal year has a duration of one year with closing on December 31, a date that must be fixed in the bylaws or articles of association of the institution.

Art. 23. The Central Bank of
Brazil is authorized to issue norms and adopt measures deemed necessary for the execution of the provisions of this Resolution, including regarding:

I - the definition of specific procedures for accounting classification and recording of assets, liabilities, revenues, and expenses in Cosif; and

II - the definition of additional characteristics of the exchange rate referred to in Art. 5, § 1.

Art. 24. The provisions of
Art. 2, item V, must be applied prospectively from the date of entry into force of this Resolution.

Art. 25. The following are revoked:

I - Resolution No. 487, of July 19, 1978;

II - Art. 15 of the Regulation Annexed to
Resolution No. 1,120, of April 4, 1986;

III - Art. 16 of the Regulation Annexed to
Resolution No. 1,655, of October 26, 1989;

IV - Resolution No. 1,724, of June 27,
1990;

V - Resolution No. 3,566, of May 29,
2008;

VI - Resolution No. 4,007, of August 25,
2011;

VII - Resolution No. 4,144, September 27,
2012;

VIII - Resolution No. 4,748, of August 29,
2019;

IX - Circular No. 623, of March 31,
1981;

X - Circular No. 1,540, of October 6,
1989;

XI - Circular No. 1,837, of November 1,
1990;

XII

• items 1 to 5 of Annex II of Circular No. 2,106, of December 20, 1991; and

XIII

• Circular No. 3,020, of December 22, 2000.

Art. 26. This Resolution enters into force on January 1, 2022.

Roberto de Oliveira Campos Neto
President of the Central Bank of Brazil