CMN Resolution No. 4,967 — Criteria for Accounting Recognition, Measurement, and Disclosure of Investment Property and Non-Financial Assets

Resolution No. 4,967

CMN RESOLUTION
NO. 4,967, OF NOVEMBER 25, 2021

Establishes the criteria to be observed by financial institutions and other institutions authorized to operate by the Central Bank of Brazil in the accounting recognition, measurement, and disclosure of investment property and non-financial assets acquired for the purpose of future sale and generation of profits based on variations in their market prices.

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 November 25, 2021, based on Art. 4, items VIII and XII, of the aforementioned Law, and considering the provisions of Art. 61 of Law No. 11,941, of May 27, 2009,

R E S O L V E D:

CHAPTER I
OF THE OBJECT AND SCOPE OF APPLICATION

Art. 1. This Resolution establishes accounting criteria to be observed by financial institutions and other institutions authorized to operate by the Central Bank of Brazil in the recognition, measurement, and disclosure of:

I - investment property; and

II - non-financial assets acquired for the purpose of future sale and generation of profits based on variations in their market prices.

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

CHAPTER II
OF INVESTMENT PROPERTY

Art. 2. The institutions mentioned in Art. 1 that, in legally permitted cases, maintain investment property must observe Technical Pronouncement CPC 28 – Investment Property, approved by the Accounting Pronouncements Committee (CPC) on June 26, 2009, for the measurement, recognition, and disclosure of these assets.

§ 1. The technical pronouncements cited in the text of CPC 28, while not received by a specific act of the National Monetary Council, cannot be applied.

§ 2. In the application of the pronouncement referred to in the main text, the application of the provisions of item 84A is prohibited.

§ 3. References to other pronouncements in the text of CPC 28, for the purposes of this Resolution, must be interpreted as references to CPC pronouncements that have been received by the National Monetary Council, as well as to other regulatory provisions.

§ 4. Investment property must be evaluated using the cost method:

I - intended for use by controlled entities or by the controlling entity of the institution;

II - resulting from non-financial assets held for sale, received in settlement of financial instruments of difficult or doubtful collection transferred by the institutions mentioned in Art. 1 to an entity part of the same prudential conglomerate.

CHAPTER III
OF NON-FINANCIAL ASSETS ACQUIRED
FOR THE PURPOSE OF FUTURE SALE AND GENERATION OF PROFITS BASED ON VARIATIONS IN THEIR MARKET PRICES

Art. 3. Non-financial assets acquired by the institutions mentioned in Art. 1 for the purpose of future sale and generation of profits based on variations in their market prices must be initially recognized at the cash acquisition price, plus transaction costs.

§ 1. The provisions of this Chapter do not apply to assets whose recognition and measurement criteria are provided for in specific regulations.

§ 2. In the installment acquisition of the non-financial asset, the difference between the cash price of the asset and the total payments must be allocated monthly, pro rata temporis, in the appropriate expense account, according to the accrual basis of accounting.

Art. 4. The non-financial assets referred to in Art. 3, after initial recognition, must be measured, during balance sheets and statements, at fair value, evaluated in accordance with specific regulations, net of sales expenses.

Sole Paragraph. The gain or loss resulting from changes in the fair value of the non-financial assets mentioned in the main text must be recognized in the period's result.

Art. 5. If the non-financial asset ceases to meet the conditions referred to in Art. 3, the institution must reclassify it to the appropriate accounting group at fair value on the date of reclassification.

Sole Paragraph. After the reclassification referred to in the main text, specific regulations for the recognition, measurement, and disclosure applicable to the asset, according to its nature, must be observed.

CHAPTER IV
GENERAL AND TRANSITIONAL PROVISIONS

Art. 6. The Central Bank of Brazil is authorized to adopt the necessary measures to comply with this Resolution, including regarding information disclosure requirements.

Art. 7. The Central Bank of Brazil may determine adjustments to the models adopted by institutions for the fair value assessment of the assets referred to in this Resolution, if it identifies inadequacy in the definition of these models.

Art. 8. The institutions mentioned in Art. 1 must keep available to the Central Bank of Brazil the documentation that clearly and objectively evidences the criteria used for the measurement of the assets referred to in this Resolution, for a minimum period of five years, counted from the date of measurement, or for a longer period due to legal or regulatory determination.

Art. 9. It is permitted, until the end of the 2022 fiscal year, to measure the assets referred to in this Resolution that cannot be measured at Level 1 of the fair value hierarchy, according to current regulations, at acquisition cost less any impairment loss.

Art. 10. The institutions mentioned in Art. 1 must apply the provisions of this Resolution prospectively from the date of its entry into force.

Sole Paragraph. The effects of adjustments resulting from the application of the accounting criteria established by this Resolution, including the exercise of the option provided for in Art. 9, must be recorded in offset to the accumulated profits or losses account at the net value of the tax effects.

Art. 11. This Resolution enters into force on January 1, 2022.

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