CVM Instruction No. 191 of July 15, 1992

CVM INSTRUCTION NO. 191, OF JULY 15, 1992.

Amends and consolidates CVM Instructions No. 64, of May 19, 1987, No. 138, of January 16, 1991, and No. 146, of June 13, 1991; establishes the Accounting Monetary Unit; provides for procedures for the preparation and disclosure of accounting statements in constant purchasing power currency, for full compliance with Fundamental Accounting Principles; and takes other measures.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION - CVM, makes public that the Collegiate Body, in a session held on this date, based on Articles 133, paragraph 3, 176, "caput" and its paragraphs 1 and 4, 177, paragraph 3, and 249, sole paragraph, of LAW NO. 6,404, of December 15, 1976, and on Articles 11, "caput" and items I to IV, and 22, sole paragraph, items I, II, IV and VII, of LAW NO. 6,385, of December 7, 1976, and having in view, furthermore, the provisions of the pronouncement attached to CVM DELIBERATION NO. 29, of February 5, 1986 and CVM INSTRUCTION NO. 2, of May 4, 1978,

RESOLVED:

OF THE ACCOUNTING MONETARY UNIT

Art. 1. The Accounting Monetary Unit - UMC - is hereby established, as the reference unit to be used by open companies for the preparation of accounting statements in constant purchasing power currency.

OF THE DUTY TO INFORM IN CONSTANT PURCHASING POWER CURRENCY

Art. 2. Open companies shall prepare and disclose accounting statements in constant purchasing power currency with full compliance with Fundamental Accounting Principles.

§1. The accounting statements in constant purchasing power currency shall be disclosed with their values expressed in national currency, using, for this purpose, the parity existing between the UMC and the national currency at the end of the period.

§2. The values relating to the accounting statements in constant purchasing power currency of the previous period shall be presented, for comparison purposes, in the currency of the end of the period being closed.

§3. The provisions of this article apply to consolidated accounting statements in constant purchasing power currency.

Art. 3. Open companies may use, for compliance with the provisions of the preceding article, the following alternatives:

I - the daily variation of the value of the UMC;

II - the monthly average variation of the value of the UMC;

III - a mixed criterion of the previous alternatives, without prejudice to the quality of information and with the adjustments required so that the revenues and expenses representative of the operations carried out by open companies are adequately reflected.

Sole paragraph. The Head of the Department of Accounting and Audit Affairs of the CVM may, by Declaratory Act, authorize the use of the monthly variation of the value of the UMC or limit the use of the previous alternatives, according to the level of the inflation rate.

OF THE BALANCE SHEET IN CONSTANT PURCHASING POWER CURRENCY

Art. 4. For the purposes of this Instruction, monetary items are considered to be the asset elements composed of cash and rights and obligations realizable or payable in currency, regardless of whether they are subject to post-fixed variations or include pre-fixed interest or corrections.

Sole paragraph. Deposits for tax incentives and compulsory loans shall also be classified as monetary items, while in the form of credits.

Art. 5. Active and passive monetary items, resulting from pre-fixed operations, shall be translated to present value, based on the average nominal interest rate disclosed daily by the National Association of Investment Banks - ANBID.

§1. In the case of a pre-fixed financial operation involving a financial institution, the adjustment to present value may be carried out based on the interest rate effectively contracted, when the effect on the result does not present a relevant difference compared to that produced by the application of the interest rate provided in the "caput" of this article, observing the convention of conservatism.

§2. The quantification of the adjustment to present value shall be carried out on an exponential "pro rata die" basis, from the origin of each transaction.

§3. The calculation may be carried out on a basis different from that provided in the preceding paragraph, when the difference verified is not relevant.

§4. The provisions of this article apply to all operations, including those that do not have an active or passive balance at the end of each month.

Art. 6. For the purposes of this Instruction, non-monetary items are considered to be:

I - the elements of permanent assets and shareholders' equity;

II - inventories and storerooms;

III - prepaid expenses and results of future exercises;

IV - temporary investments in gold and shares; and

V - other rights and obligations to be settled in goods and/or services.

Art. 7. Non-monetary items shall be recorded at their present value on the date of their acquisition or formation, in the manner provided in the "caput" and paragraphs of Art. 5.

Art. 8. Non-monetary items, including active and passive provisions, shall be controlled in quantities of UMC, from the date of their formation or acquisition.

OF THE STATEMENT OF RESULTS IN CONSTANT PURCHASING POWER CURRENCY

Art. 9. Gains and losses generated by monetary items and adjustments to present value of credits and obligations shall be appropriated to the result accounts to which they are linked.

§1. Gains and losses linked to monetary items that generate nominal financial expenses or revenues shall be considered as reducers of the respective nominal financial expenses or revenues, producing, as a net balance, real financial expenses or revenues.

§2. The gains and losses referred to in the "caput" of this article shall be considered as other operating expenses or revenues, when not identifiable to other result accounts.

§3. The reversals of adjustments to present value of credits and obligations, carried out in the manner of Articles 5 and 7, shall be appropriated as nominal financial revenues or expenses, being applicable to them the provisions of paragraph 1 of this article.

Art. 10. Revenues and expenses generated by non-monetary items valued at market prices shall be adjusted to represent the real variations in the quotations of those items, based on the UMC.

OF THE STATEMENT OF SOURCES AND APPLICATIONS OF RESOURCES AND THE STATEMENT OF CHANGES IN SHAREHOLDERS' EQUITY IN CONSTANT PURCHASING POWER CURRENCY

Art. 11. The statement of sources and applications of resources and the statement of changes in shareholders' equity in constant purchasing power currency shall be prepared in a manner consistent with the content of this Instruction.

OF THE EXPLANATORY NOTES AND THE MANAGEMENT REPORT

Art. 12. The values contained in the explanatory notes of the accounting statements in constant purchasing power currency and in the management report shall be presented in the manner of this Instruction.

Art. 13. The explanatory notes shall highlight:

I - the alternative adopted, according to the provisions of Art. 3 and paragraph 3 of Art. 5; and

II - relevant gains and losses, generated by monetary items not linked to specific result accounts.

GENERAL PROVISIONS

Art. 14. Open companies may disclose only the set of accounting statements in constant purchasing power currency or highlight them with greater emphasis.

Art. 15. The accounting statements in constant purchasing power currency and respective explanatory notes shall be subject to the opinion of independent auditors.

Art. 16. Open companies shall keep in good order, for a period of 03 (three) years, and by any adequate means, the custody of the working papers and calculation memos relating to the preparation of the accounting statements in constant purchasing power currency to which this Instruction refers.

Sole paragraph. Non-compliance with the provisions of the "caput" of this article shall be considered a serious offense, entailing the application of the penalties provided for in items I to IV of Art. 11 of LAW NO. 6,385, of December 7, 1976.

Art. 17. The set of accounting statements in constant purchasing power currency shall be disclosed in accordance with the provisions of the "caput" and paragraph 3 of Art. 133 of LAW NO. 6,404, of December 15, 1976, and CVM INSTRUCTION NO. 2, of May 4, 1978.

TRANSITIONAL AND FINAL PROVISIONS

Art. 18. The monetary expression of the Accounting Monetary Unit - UMC, from January 1, 1992, shall be equal to the monetary expression of the Daily Fiscal Reference Unit - Daily UFIR, or index that may replace it.

Art. 19. The following may be postponed to the fiscal year beginning after December 1992:

I - the calculation of the adjustment to present value on all transactions, provided for in paragraph 4 of Art. 5; and

II - the appropriation of the reversals of adjustments to present value of credits and obligations, in the manner provided for in paragraph 3 of Art. 9.

Sole paragraph. The adoption of the alternatives provided for in this article shall not imply the re-preparation of the accounting statements relating to the fiscal year that includes the month of December 1992.

Art. 20. Upon the initial adoption of the criteria provided for in Articles 5, 7 and 8, open companies shall make the necessary adjustments to their opening balance sheets, in constant purchasing power currency, net of the tax effects resulting therefrom, disclosing the fact and the values involved in an explanatory note to the statements.

Sole paragraph. The adjustment referred to in the "caput" of this article shall be optional for open companies that carried out the adjustment to present value of credits and obligations, based on a rate different from that provided in the "caput" of Art. 5.

Art. 21. Open companies shall not be exempt from disclosing the accounting statements in corporate form, whose net profit or loss of the period, obtained in the accounting statements in corporate form and in constant purchasing power currency, are different.

Sole paragraph. The effects of tax charges on intertemporal differences, resulting from differentiated asset valuations, in the form of credit for advance payment or provision for deferred tax charges, shall be considered in the accounting statements in constant purchasing power currency.

Art. 22. This Instruction enters into force on the date of its publication, applying to accounting statements relating to fiscal years ending on or after September 1, 1992, with CVM Instructions No. 64, of May 19, 1987, No. 138, of January 16, 1991, and No. 146, of June 13, 1991, and other provisions to the contrary, being revoked.

Sole paragraph. The norms that refer to the matter treated herein are adapted to this Instruction.

Original signed by
ROBERTO FALDINI
President