CVM Resolution No. 157 of June 23, 2022

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL (CVM) Seven of September Street, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – ZIP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Cincinato Braga Street, 340/2nd, 3rd and 4th Floors, Bela Vista, São Paulo/ SP – ZIP: 01333-010 – Brazil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Corporate Financial Center Building, S.404/4th Floor, Brasília/DF – ZIP: 70712-900 – Brazil - Tel.: (61) 3327-2030/2031 www.gov.br/cvm

CVM RESOLUTION NO. 157, OF JUNE 23, 2022

Establishes the procedures to be observed for the preparation and disclosure of accounting statements in constant purchasing power currency, when prepared by public companies, to meet the fundamental qualitative characteristics of relevance and faithful representation of useful financial information, as provided in the Conceptual Framework for Financial Reporting.

The PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION OF BRAZIL - CVM makes it known that the Board, in a meeting held on June 15, 2022, based on §§ 3 and 5 of art. 177 of Law No. 6,404, of December 15, 1976, combined with items II and IV of § 1 of art. 22 of Law No. 6,385, of December 7, 1976, as well as arts. 5 and 14 of Decree No. 10,139, of November 28, 2019,

APPROVED the following Resolution:

CHAPTER I – OF THE OBJECTIVE

Art. 1 This Resolution establishes complementary operational procedures to be observed by public companies in the preparation of accounting statements in constant purchasing power currency, when the criteria established in Technical Pronouncement CPC 42 are met, observing applicable legislation.

Sole Paragraph. The public company that opts to prepare and disclose, on a supplementary informational basis, accounting statements in constant purchasing power currency, must observe the procedures provided for in this Resolution.

CHAPTER II – OF THE ACCOUNTING MONETARY UNIT

Art. 2 The Accounting Monetary Unit - UMC - must be adopted as the reference unit to be used by public companies for the preparation of accounting statements in constant purchasing power currency.

Sole Paragraph. The UMC must be established based on the general price index that reflects the average variation in prices of products and services in the economy, as defined by the administration of the public company, and the criteria and justification adopted for the choice of the index must be disclosed.

CHAPTER III – INFORMATION IN CONSTANT PURCHASING POWER CURRENCY

Art. 3 In the preparation of accounting statements in constant purchasing power currency, public companies must observe the procedures provided for in this Resolution.

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

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

Art. 4 Public companies may use, to comply with the provisions of the previous article, the following alternatives:

I - the daily variation of the value of the UMC; II - the average monthly 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 public companies are adequately reflected.

Sole Paragraph. For the use of the alternatives set forth in the caput, the administration of the public company must exercise judgment, based on the inflationary level of the economy, the materiality of the resulting impact on the accounting statements, and the assumptions of relevance and faithful representation of the accounting information to be reported.

CHAPTER IV – OF THE BALANCE SHEET IN CONSTANT PURCHASING POWER CURRENCY

Art. 5 For the purposes of this Resolution, monetary items are considered to be equity 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.

Art. 6 Monetary assets and liabilities, resulting from pre-fixed operations, must be translated to present value, based on Technical Pronouncement CPC 12.

Art. 7 Non-monetary items must be recorded at their present value on the date of their acquisition or formation, according to the provisions of Technical Pronouncement CPC 12.

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

CHAPTER V – OF THE INCOME STATEMENT IN CONSTANT PURCHASING POWER CURRENCY

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

§1 Gains and losses linked to monetary items that generate nominal financial expenses or revenues must 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 must be considered as other operating expenses or revenues, when not identifiable to other income accounts.

§3 The reversals of adjustments to present value of credits and obligations, carried out in the manner of Articles 6 and 7, must be appropriated as nominal financial revenues or expenses, and the provisions of paragraph 1 of this article apply to them.

Art. 10 Revenues and expenses generated by non-monetary items measured at fair value must be adjusted to represent the real variations in the quotes of those items, based on the UMC.

CHAPTER VI – OF THE STATEMENT OF CASH FLOWS, CHANGES IN EQUITY AND ADDED VALUE IN CONSTANT PURCHASING POWER CURRENCY

Art. 11 The statement of cash flows, changes in equity, and added value in constant purchasing power currency must be prepared consistently with the content of this Resolution, and must be presented in constant purchasing power currency at the end of the reporting period.

CHAPTER VII – FINAL PROVISIONS

Art. 12. From the effectiveness of this Resolution, the following are revoked:

I – CVM Instruction No. 191, of July 15, 1992; and II – the Explanatory Note to CVM Instruction No. 191.

Art. 13. This Resolution enters into force on August 1, 2022.

Signed electronically by
Marcelo Barbosa
President