CVM Instruction No. 118 of May 7, 1990 (Revoked)

CVM INSTRUCTION NO. 118, OF MAY 7, 1990.

Provides for the procedures for the preparation of quarterly information (ITRs) of publicly held companies, from the periods closed that include the month of March 1990, and takes measures aimed at evidencing the effects produced by Laws No. 8024 and 8033, of April 12, 1990.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION – CVM makes public that the Collegiate Body, in a session held on this date, based on article 177, § 3rd, of Law No. 6,404, of December 15, 1976; and on article 22, sole paragraph, items I, II, IV and VI, of Law No. 6,385, of December 7, 1976 and taking into account the changes introduced by the Economic Stabilization Plan, due to Laws Nos. 8024 and 8033, of April 12, 1990 and considering the reasons set out in the respective Explanatory Note of this Instruction,

RESOLVED,

Art. 1st The quarterly information (ITRs) of publicly held companies, provided for in art. 16, item VIII of CVM Instruction No. 60/87, including those that include the month of March 1990, must observe, in addition to the usual information, the procedures and additional information established in this Instruction.

Art. 2nd To evidence the effects of the Economic Stabilization Plan, with respect to ITRs that include the month of March 1990, the explanatory notes must contemplate such effects in a discriminated manner. Companies must observe the segregation of assets and liabilities into cruzeiros and new cruzados, with classifications according to realization periods and the constitution of necessary provisions.

Art. 3rd Assets and liabilities expressed in foreign currency must be converted based on fluctuating exchange rates on the last business day of the quarter to which the ITR refers.

Art. 4th The company must assess the need to establish provisions to cover possible losses arising from applications in financial assets, including securities, inventories, and deferred assets, as well as provisions resulting from IOF – Tax on Financial Operations.

Sole paragraph. The bases for the constitution of provisions, as well as the justification for non-provisioning, must be evidenced in an explanatory note.

Art. 5th Investments evaluated by the equity method must be adjusted based on financial statements prepared by affiliates and controlled companies, contemplating the criteria established in this Instruction.

Sole paragraph. The equity method in controlled societies relative to the quarter that includes the month of March 1990 must be carried out based on a balance sheet or trial balance of the same date, with the lag of up to 60 days provided for in item XIV “in fine” of CVM Instruction No. 01, of April 27, 1978, not prevailing.

Art. 6th In determining the quarterly result, provisions must be established for income tax, including for the state surcharge and social contribution attributable to this result. The administrators' participations provided for in item VI of article 187 of Law No. 6,404/76 must not be computed, when the provision to meet the statutorily mandatory minimum dividend has not been established. The withholding income tax provided for in Law No. 7,713/88 must be provisioned.

Art. 7th Subsequent events that have or may have relevant effects on the company's equity and results, including those of its controlled and/or affiliated companies, as a result of the measures included in the economic stabilization plan, must be subject to provisioning and/or inclusion in sheet 5/ITR, named “explanatory notes”, with the clarifications necessary to understand their possible reflections.

Art. 8th The quarterly information of publicly held companies subsequent to those that include the month of March 1990 will be subject to review by independent auditors in a limited manner, according to the methodology provided for in Technical Communication CT – IBRACON-No 3/89, of June 19, 1989, of the Brazilian Institute of Accountants.

Sole paragraph. The quarterly information of publicly held companies that include the month of March 1990 will be subject to review by independent auditors in a special manner, according to the methodology provided for in a Technical Communication to be issued jointly by the Federal Council of Accountancy and by the Brazilian Institute of Accountants, which make specific reference to this Instruction.

Art. 9th The quarterly information will be forwarded by publicly held companies according to the procedures provided for in article 13 of CVM Instruction No. 60/87, accompanied by the report of independent auditors, within the following deadlines:

a) 1st quarter of 1990 (or quarter that includes the month of March 1990): until June 7, 1990; b) first and second subsequent quarters to the item above: until 50 (fifty) days from the end of the quarter; c) subsequent quarters: until 45 (forty-five) days from the end of the quarter.

Art. 10. The National Fiscal Treasury Bond-BTNF is maintained as the monetary standard for the preparation of ITRs in currency with constant purchasing power, for full compliance with the principle of the "monetary common denominator", according to the procedures prescribed by the CVM and considering that the conversion must be made into cruzeiros.

Art 11. Publicly held companies that are institutions authorized to operate by the Central Bank of Brazil may use, for the preparation of ITRs that include the month of March 1990, the data required by BACEN Circular No. 1667, of April 11, 1990.

Art. 12. This Instruction enters into force on the date of its publication, revoking the provisions to the contrary.

Original signed by
ARY OSWALDO MATTOS FILHO
President