RegAlert

Rule · CVM · 25 Jun 1992

CVM Instruction No. 189 of June 25, 1992 (Revoked)

securities

CVM Instruction No. 189 mandates that revaluation reserve balances existing as of December 31, 1991, be transferred to accumulated profits or losses for monetary correction related to the IPC relative to the BTNF, and to a specific capital reserve account for special monetary correction. It requires that all taxes and contributions incident on the revaluation reserve be fully provisioned using a specific corrective account, regardless of the realization period of the corresponding assets, with any remaining taxes debited from accumulated profits or losses if the reserve is used for capital incorporation. The net value of the realized revaluation reserve must be transferred to accumulated profits or losses, and these effects must be reflected in the balance sheet of the investor or controlling company using the equity method. The instruction entered into force on the date of publication and revoked Articles 10 and 11 of CVM Instruction No. 167, Articles 2 and 3 of CVM Instruction No. 176, Item 70 of the IBRACON Pronouncement, and other conflicting provisions.

BrazilComissão de Valores Mobiliários

CVM INSTRUCTION NO. 189, OF JUNE 25, 1992
Establishes the accounting treatment to be given to the revaluation reserve, including taxes and contributions levied thereon, in consonance with the effects of Law No. 8,200, of June 28, 1991.

The BOARD OF DIRECTORS OF THE SECURITIES AND EXCHANGE COMMISSION makes public that, in a meeting held on this date, based on items I, II, IV, and VII of the sole paragraph of Article 22 of Law No. 6,385, of December 7, 1976, in the "caput" and paragraph 3 of Article 177 of Law No. 6,404, of December 15, 1976, and in Article 48 of Decree No. 332, of November 4, 1991,

HAS RESOLVED:

Article 1. The amounts recorded in the revaluation reserve shall be transferred to accumulated profits or losses when referring to the supplementary monetary correction of the IPC in relation to the BTNF, provided for in Article 3 of LAW NO. 8,200, of June 28, 1991, and to the specific account of capital reserve when corresponding to the special monetary correction, provided for in Article 2 of the same Law, through the use of specific corrective accounts of the revaluation reserve.

Sole paragraph. The transfers provided for in the "caput" of this article shall refer to the revaluation reserves existing on December 31, 1991.

Article 2. The value concerning taxes and contributions levied on the revaluation reserve shall be fully provisioned, through the use of a corrective account of the accounted revaluation reserve, regardless of the period provided for the realization of the corresponding assets.

Sole paragraph. Any remaining taxes and contributions in equity, in the case of a revaluation reserve used for incorporation into share capital or for any other purpose, shall be provisioned by debiting accumulated profits or losses.

Article 3. The net value of the realized revaluation reserve shall be transferred to accumulated profits or losses, regardless of the date of its constitution.

Article 4. The effects of the application of the provisions in the preceding articles shall be reproduced in the balance sheet of the investor or controlling company, when the equity method is applicable, directly in their respective equity accounts.

Article 5. This Instruction shall enter into force on the date of its publication, with Articles 10 and 11 of CVM Instruction No. 167, of December 17, 1991, Articles 2 and 3 of CVM Instruction No. 176, of February 6, 1992, Item No. 70 of the IBRACON Pronouncement, annexed to CVM Deliberation No. 27, of February 5, 1986, and other provisions to the contrary, being revoked.

Signed original by
ROBERTO FALDINI
President

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Annotations and obligations
5 obligations · 3 definitions
  • Obligation 5
  • Definition / condition 3
  • background, boilerplate

Lineage: Amended

Law No. 6,385 of December 7, 19…1976Law No. 6,385 of December 7, 1976 – securities market; creates the Securities and Exchange Commission (1976-12-07)Act No. 332 dated 1991-11-04Act No. 332 dated 1991-11-04Law No. 6404 dated 1976-12-15Law No. 6404 dated 1976-12-15Law No. 8200 dated 1991-06-28Law No. 8200 dated 1991-06-28CVM Instruction No. 167 of Dece…1991CVM Instruction No. 167 of December 17, 1991 (Repealed) (1991-12-17)CVM Instruction No. 176 of Febr…1992CVM Instruction No. 176 of February 6, 1992 (1992-02-06)Decision No. 27 dated 1986-02-05Decision No. 27 dated 1986-02-05CVM Instruction No. 189 ofJune 25, 1992 (Revoked)1992-06-25 · this documentCVM Instruction No. 189 of June 25, 1992 (Revoked) (1992-06-25)Explanatory Note to CVM Instruc…1992Explanatory Note to CVM Instruction No. 189 of June 25, 1992 (1992-06-25)CVM Instruction No. 197 of Janu…1993CVM Instruction No. 197 of January 19, 1993 (1993-01-19)
amendssupersedesissued underrefers toproposed or not in RegAlertarrows run from the older text to the one that changes it

Timeline

Amended 1 time · last 1993-01-19

This document supersedes: CVM Instruction No. 176 of February 6, 1992, CVM Instruction No. 167 of December 17, 1991 (Repealed)

What changed in the obligations

Against CVM Instruction No. 176 of February 6, 1992 (1992-02-06)

3 new obligations · 8 not carried over

2 obligations are the same in both texts.

New in this text (3)
  • Any remaining taxes and contributions in equity, in the case of a revaluation reserve used for incorporation into share capital or for any other purpose, shall be provisioned by debiting accumulated profits or losses. in this text
  • Article 3. The net value of the realized revaluation reserve shall be transferred to accumulated profits or losses, regardless of the date of its constitution. in this text
  • Article 4. The effects of the application of the provisions in the preceding articles shall be reproduced in the balance sheet of the investor or controlling company, when the equity method is applicable, directly in their respective equity accounts. in this text
Not carried over (8)
  • In an explanatory note, the balance of the asset resulting from the special monetary correction, cited in the "caput" of this article, to be recognized in future fiscal years and which will not be deductible for tax purposes, shall be highlighted. in the old text
  • Art. 2º The application by the open company, until May 31, 1992, of the provisions of Art. 10 and paragraphs of CVM Instruction No. 167/91 is optional. in the old text
  • The open company that adopts the option not to transfer the amounts registered in the revaluation reserve to the specific capital reserve and/or accumulated profits or loss accounts, shall highlight in an explanatory note: II - the period foreseen for the realization of these charges, when possible its estimate; and in the old text
  • The open company that adopts the option not to transfer the amounts registered in the revaluation reserve to the specific capital reserve and/or accumulated profits or loss accounts, shall highlight in an explanatory note: III - comparatively to these charges, the value of the tax credit resulting from the debtor balance of the complementary monetary correction of IPC x BTNF, registered in the lo… in the old text
  • Art. 4º The forwarding of information, as provided for in paragraph 2º of Art. 12 of CVM Instruction No. 167/91, is no longer mandatory, with the open company deciding on its preparation and disclosure. in the old text
  • §1º - These statements are exempt from the opinion of the independent auditor. in the old text
  • §2º - If the open company discloses this information without the opinion of the independent auditor, it must adopt the expression "NOT AUDITED" in bold. in the old text
  • Art. 5º The disclosure provided for in item "c" of Art. 13 of CVM Instruction No. 167/91 is optional for the open company. in the old text

Against CVM Instruction No. 167 of December 17, 1991 (Repealed) (1991-12-17)

1 new obligation · 23 not carried over

3 obligations are the same in both texts.

New in this text (1)
  • Any remaining taxes and contributions in equity, in the case of a revaluation reserve used for incorporation into share capital or for any other purpose, shall be provisioned by debiting accumulated profits or losses. in this text
Not carried over (23)
  • Art. 1. Public companies shall recognize the effect of monetary correction provided for in Article 3 of Law No. 8,200, of June 28, 1991, directly in accumulated profits or losses and: I - if the effect results in a monetary correction credit balance, the value shall be accounted for net of the resulting tax charges, which shall be recorded as long-term current liabilities; or in the old text
  • Art. 1. Public companies shall recognize the effect of monetary correction provided for in Article 3 of Law No. 8,200, of June 28, 1991, directly in accumulated profits or losses and: II - if the effect results in a monetary correction debit balance, the value of the resulting tax credit shall not be recognized, except in cases where there is guarantee for its realization, based on an obligatio… in the old text
  • Art. 3. The tax effect on values accounted for as depreciation, amortization, depletion and other forms of asset realization expense, related to the complementary correction of IPC X BTNF, in the base periods of 1991 and 1992, shall be registered in long-term realizable assets when there is evidence of future realization, as provided for in paragraphs 1 and 2 of Article 39 of Decree No. 332, of… in the old text
  • Art. 4. A public company that holds investments evaluated by the equity method shall, after the monetary update provided for in Article 1, apply the equity method, based on the net equity of affiliated and/or controlled companies, after adjustment for the effects of said complementary monetary correction, with a corresponding entry in accumulated profits or losses, after amortizing any goodwill… in the old text
  • Art. 5. If the company has already adopted the IPC in 1990 or another index other than BTNF, it shall give the treatment provided for in Articles 1 to 4, insofar as applicable, to any differences resulting from the application of Decree No. 332, of November 4, 1991. in the old text
  • Art. 6. The option to apply or not apply the special monetary correction provided for in Article 2 of Law No. 8,200, of June 28, 1991, and regulated in Chapter III of Decree No. 332, of November 4, 1991, must be exercised by public companies in light of Fundamental Accounting Principles, observin… I - the retroactive calculation must respect the date of formation of assets, admitting, subject t… in the old text
  • Art. 6. The option to apply or not apply the special monetary correction provided for in Article 2 of Law No. 8,200, of June 28, 1991, and regulated in Chapter III of Decree No. 332, of November 4, 1991, must be exercised by public companies in light of Fundamental Accounting Principles, observin… II - this monetary correction shall not apply to investments evaluated by the equity method, lease… in the old text
  • Art. 6. The option to apply or not apply the special monetary correction provided for in Article 2 of Law No. 8,200, of June 28, 1991, and regulated in Chapter III of Decree No. 332, of November 4, 1991, must be exercised by public companies in light of Fundamental Accounting Principles, observin… III - upon recognition of this special correction, the criteria previously adopted for appropriati… in the old text
  • Art. 6. The option to apply or not apply the special monetary correction provided for in Article 2 of Law No. 8,200, of June 28, 1991, and regulated in Chapter III of Decree No. 332, of November 4, 1991, must be exercised by public companies in light of Fundamental Accounting Principles, observin… V - this special correction shall be recognized in the investor or parent company that evaluates p… in the old text
  • Art. 6. The option to apply or not apply the special monetary correction provided for in Article 2 of Law No. 8,200, of June 28, 1991, and regulated in Chapter III of Decree No. 332, of November 4, 1991, must be exercised by public companies in light of Fundamental Accounting Principles, observin… The remaining value shall be registered in the account referred to in the previous item; in the old text
  • Art. 6. The option to apply or not apply the special monetary correction provided for in Article 2 of Law No. 8,200, of June 28, 1991, and regulated in Chapter III of Decree No. 332, of November 4, 1991, must be exercised by public companies in light of Fundamental Accounting Principles, observin… VI - this special correction shall be registered until December 31, 1991, referring to January 31,… in the old text
  • Art. 7. The Independent Auditor is responsible for evaluating the criteria and reasons of management regarding the need to recognize or not the special monetary correction and to opine on the adequacy of the financial statements in light of Fundamental Accounting Principles. in the old text
  • Art. 8. Assets that received, during the construction phase, the debit of nominal financial charges from liabilities, net of active correction, regardless of whether the registration was made in deferred expenses, shall not be subject to the corrections provided for in Articles 2 and 3 of Law No. 8200, of June 28, 1991. in the old text
  • Art. 9. Whenever calculations reveal relevant effects on results, dividends, equity or other comparison bases, the company shall observe the provisions of CVM Instruction No. 31, of February 8, 1984, which deals with the disclosure and use of information on material acts or facts, regardless of whether formal financial statements are completed. in the old text
  • Companies that have used the revaluation reserve for an increase in share capital or amortization of losses shall disclose in explanatory notes the balance that would remain and the destination that would have been given to it in the application of this rule, including with regard to incident taxes. in the old text
  • The disclosure of comparative financial statements shall be made by adjusting the statements with full monetary correction of the previous period, contemplating the calculated effects of the application of Articles 2 and 3 of Law No. 8200, of June 28, 1991, regulated by Decree No. 332, of November 4, 1991, in consonance with this norm. in the old text
  • §1. Public companies may disclose the statement of results of the fiscal year and the statement of sources and applications of resources without comparison with those of the previous fiscal year. in the old text
  • §2. Companies with securities admitted to trading on Stock Exchanges shall send such comparative statements to the CVM and to said Exchanges by June 30, 1992. in the old text
  • The following shall also be subject to complementary disclosure in explanatory notes: a) general procedures adopted and the amounts accounted for of the complementary correction of IPC X BTNF and special monetary correction in the main asset accounts; in the old text
  • The following shall also be subject to complementary disclosure in explanatory notes: b) justification of the option chosen regarding the special monetary correction in light of Fundamental Accounting Principles; in the old text
  • The following shall also be subject to complementary disclosure in explanatory notes: c) net operating revenue and net result of the fiscal year of 1990 that would have been determined if the INPC had been used throughout the retroaction period provided for in Article 6 of this Instruction; in the old text
  • The requirements for accounting for values representing the corrections provided for in Articles 2 and 3 of Law No. 8,200, of June 28, 1991, may be met by auxiliary records, when integrated into the accounting system of the public company. in the old text
  • For the preparation of accounting statements in constant purchasing power currency, the company may adopt, at its option, provided that consistently throughout each fiscal year, for recording its transactions, in addition to the alternatives provided for in Article 2 of CVM Instruction No. 146, of June 13, 1991, the following: adopt the monthly variation of FAP for non-monetary items provided for… in the old text

“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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