CVM INSTRUCTION NO. 285, OF JULY 31, 1998.

Amends Article 14 of CVM Instruction No. 247, of March 27, 1996, which provides for the evaluation of investments in affiliated and controlled companies and for the procedures for preparing and disclosing consolidated financial statements.

THE PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION – CVM makes it known that the Collegiate Board, in a meeting held on this date, and based on the provisions of letter “c” of item III of Article 248 of Law No. 6,404, of December 15, 1976, and item IV of § 1º of Article 22 of Law No. 6,385, of December 7, 1976, HAS RESOLVED to issue the following Instruction:

Art. 1º § 2º of Article 14 of CVM Instruction No. 247, of March 27, 1996, shall be effective with the following wording:

“§ 2º Goodwill or discount resulting from the difference between the value paid in the acquisition of the investment and the market value of the assets and liabilities of the affiliated or controlled company, referred to in the previous paragraph, shall be amortized as follows:

a) goodwill or discount resulting from expected future results – within the period, extent, and proportion of the projected results, or by write-off upon disposal or obsolescence of the investment, with the projected results subject to annual verification, in order to revise the criteria used for amortization or to record a full write-off of the goodwill; and

b) goodwill resulting from the acquisition of the right to exploration, concession, or permission delegated by the Public Power – within the estimated or contracted period of use, validity, or loss of economic substance, or by write-off upon disposal or obsolescence of the investment.”

Art. 2º § 3º of Article 14 of CVM Instruction No. 247, of March 27, 1996, shall be effective with the following wording:

“§ 3º The maximum period for amortization of the goodwill provided for in letter “a” of the previous paragraph may not exceed ten years.”

Art. 3º This Instruction enters into force on the date of its publication in the Official Gazette of the Union.

Signed original by

FRANCISCO DA COSTA E SILVA
President