CMN Resolution No. 5,100 — Amending CMN Resolution No. 4,966 on Accounting Concepts and Criteria for Financial Instruments and Hedge Accounting

Resolution No. 5,100

RESOLUTION
CMN No. 5,100, OF AUGUST 24, 2023

Amending
CMN Resolution No. 4,966, of November 25, 2021, which provides for the concepts and accounting criteria applicable to financial instruments, as well as for the designation and recognition of hedging relationships (hedge accounting) by financial institutions and other institutions authorized to operate by the Central Bank of Brazil.

The Central Bank of Brazil, in accordance with Art. 9 of Law No. 4,595, of December 31, 1964, makes public that the Monetary National Council, in a session held on August 24, 2023, 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 S:

Art. 1º CMN Resolution No. 4,966, of November 25, 2021, shall enter into force with the following amendments:

"Art. 1º ............................................................................................................

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§ 1º .................................................................................................................

I - to consortium administrators, payment institutions, securities brokerage firms, securities distribution companies, and foreign exchange brokerage firms, which must observe the regulations issued by the Central Bank of Brazil in the exercise of their legal duties; and

.................................................................................................................." (NR)

"Art. 2º ............................................................................................................

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XXIV - transfer of control: an act that makes the buyer or assignee of the financial asset the holder, in practice, of the right to sell or transfer the financial asset in its entirety, autonomously and without imposition of additional restrictions resulting from the original sale or transfer operation;

XXV - gross book value of a financial instrument: amortized cost of the financial instrument before the adjustment for expected loss provision associated with credit risk, if applicable; and

XXVI - operation with characteristics of credit granting: a debt instrument with a legal form distinct from a credit operation that:

a) has as its purpose the granting of credit or the novation of a credit operation; or

b) originates in a process equivalent or similar to that applicable to typical credit operations of the institution, in a relationship between it and its client.

Sole Paragraph. For the purposes of evaluating the expected loss associated with credit risk and calculating the expected loss provision associated with credit risk referred to in Chapter IV, the definition of counterparty provided in item V of the caput includes natural and legal persons who share the credit risk vis-à-vis the institution, including through a control relationship, as defined in specific accounting regulations." (NR)

"Art. 13. ...........................................................................................................

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§ 1º Expenses incurred in the acquisition, origination, or issuance of the instrument that cannot be determined and controlled individually, without allocation, throughout the entire term of the instrument, must be recognized as an expense of the period in which they occur.

§ 2º The recognition in the exercise result of transaction costs and values received in the acquisition or origination of the instrument considered immaterial is optional.

§ 3º The institution that uses the option provided in § 2º must define in its accounting policy relative and absolute materiality criteria that are:

I - consistent and verifiable; and

II - applied to all financial instruments, regardless of the nature of the cost or revenue to be recognized.

§ 4º It is presumed that cost and revenue are material if they represent more than 1% (one percent):

I - of the total revenue the institution will obtain from the financial asset; or

II - of the total charges the institution will incur with the financial liability." (NR)

"Art. 17. ...........................................................................................................

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§ 1º The revenues referred to in the caput may only be recognized in the result upon their actual receipt.

§ 2º The provisions of the caput and § 1º do not apply to revenues generated by the recovery of written-off assets referred to in Art. 49." (NR)

"Art. 20. ...........................................................................................................

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§ 4º In the case of financial assets classified in the fair value through profit or loss category, the provisions of § 1º apply only:

I - to credit operations and other operations with characteristics of credit granting; and

II - to financial assets with a delay of more than ninety days in the payment of principal or charges." (NR)

"Art. 23. In the case of renegotiation of financial instruments not characterized as restructuring, the institution must reevaluate the instrument so that it represents the present value of cash flows discounted at the effective interest rate, according to the renegotiated contractual conditions." (NR)

"Art. 37. ...........................................................................................................

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§ 5º When a financial instrument is allocated to the third stage, the institution must reallocate all financial instruments of the same counterparty to the third stage on the balance sheet date related to the month in which this allocation occurred.

.................................................................................................................." (NR)

"Art. 40. ..........................................................................................................

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§ 5º The evaluation of the expected loss associated with credit risk based on the delay in payment of principal or charges, the loss history, and other registration, compliance, or non-compliance information related to the counterparty to which the institution has access, is optional, for financial assets:

I - whose settlement term is up to twelve months;

II - that do not constitute, collectively, a relevant exposure for the institution; and

III - that are not:

a) credit operations;

b) financial instruments with characteristics of credit granting;

c) leasing operations;

d) payment transactions; and

e) securities." (NR)

"Art. 74. Hedge operations recognized in accounting by the institutions mentioned in Art. 1º must be reclassified, on January 1, 2027, to the new categories.

.................................................................................................................." (NR)

"Art. 75. The redefinition of hedge operations recognized in accounting by the institutions mentioned in Art. 1º on January 1, 2027, is optional, including regarding:

.................................................................................................................." (NR)

"Art. 81. ...........................................................................................................

I - ......................................................................................................................

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c) to item XIX of Art. 80;

II - on January 1, 2027, regarding:

a) Chapter V; and

b) item XV of Art. 80; and

III - on January 1, 2025, regarding the remaining provisions." (NR)

Art. 2º The following are repealed:

I - the following provisions of CMN Resolution No. 4,966, of 2021:

a) the sole paragraph of Art. 13;

b) the sole paragraph of Art. 17; and

c) items I and II of Art. 23; and

II - the following provisions of Circular No. 3,082, of January 30, 2002:

a) item II of the caput of Art. 1º;

b) items IV and V of the caput of Art. 1º;

c) §§ 1º, 2º, 3º, 4º and 5º of Art. 1º;

c) (Revoked, effective August 1, 2024, by CMN Resolution No. 5,146, of February 26, 2024.)

d) Art. 2º; and

e) Arts. 6º, 7º, 8º, 9º, 10, 11 and 12.

Art. 3º This Resolution enters into force:

I - on January 1, 2025, regarding item II of Art. 2º; and

II - on October 1, 2023, regarding the remaining provisions.

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