CVM Resolution No. 199 of February 9, 2024

The PRESIDENT OF THE SECURITIES AND EXCHANGE COMMISSION – CVM makes public that the Collegiate Board, in a meeting held on February 7, 2024, 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, APPROVED the following Resolution:

Art. 1. It is made mandatory for publicly-held companies to use the Technical Pronouncements CPC 09 (R1) – Statement of Added Value, issued by the Accounting Pronouncements Committee – CPC, as per Annex “A” to this Resolution.

Art. 2. CVM Resolution No. 117, of June 3, 2022, is revoked, on the date this Resolution enters into force.

Art. 3. This Resolution enters into force on March 1, 2024, applying to fiscal years starting on or after January 1, 2024.

Sole Paragraph. For entities that have contracts within the scope of Technical Pronouncement CPC 50, early adoption of Technical Pronouncement CPC 09 (R1) is permitted.

Signed electronically by
JOÃO PEDRO BARROSO DO NASCIMENTO
President

Summary Item
OBJECTIVE 1 – 2
SCOPE AND PRESENTATION 3 – 8
DEFINITIONS 9
CHARACTERISTICS OF DVA INFORMATION
WEALTH CREATION 10 – 14
WEALTH DISTRIBUTION 15
SPECIAL CASES – SOME EXAMPLES 16 – 27
FINANCIAL INTERMEDIATION ACTIVITY (BANKING)
WEALTH CREATION 28 – 29
WEALTH DISTRIBUTION 30
INSURANCE AND REINSURANCE ACTIVITY
WEALTH CREATION 31 – 32
WEALTH DISTRIBUTION 33
MODELS
ORIGIN AND CONCEPTUAL REASONS FOR THE PREPARATION AND DISCLOSURE OF THE DVA

Objective

The objective of this Technical Pronouncement is to establish criteria for the preparation and presentation of the Statement of Added Value (DVA), which is related to economic information, as well as the interface with the communication of environmental, social, and governance (ESG) elements, and aims to highlight the wealth created by the entity and its distribution, during a certain period.
Its preparation must take into account Pronouncement CPC 00 (R2) entitled Conceptual Framework for Financial Reporting, and its data, for the most part, are obtained mainly from the Statement of Profit or Loss. Items that make up the Statement of Comprehensive Income will only affect the DVA if and when they are reclassified to the Statement of Profit or Loss.

Scope and Presentation

COMISSÃO DE VALORES MOBILIÁRIOS
Rua Sete de Setembro, 111/2-5º e 23-34º Andares, Centro, Rio de Janeiro/RJ – CEP: 20050-901 – Brasil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2º, 3º e 4º Andares, Bela Vista, São Paulo/ SP – CEP: 01333-010 – Brasil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4º Andar, Brasília/DF – CEP: 70712-900 – Brasil -Tel.: (61) 3327-2030/2031 www.cvm.gov.br RESOLUÇÃO CVM Nº 199, DE 9 DE FEVEREIRO DE 2024
3. The entity must prepare the DVA and present it as an integral part of its financial statements disclosed at the end of each fiscal year.
4. The preparation of the consolidated DVA must be based on the consolidated financial statements and evidence the participation of non-controlling partners as per the model annexed.
5. The DVA must provide users of the financial statements with information regarding the wealth created by the entity in a certain period and the manner in which such wealth was distributed.
6. The distribution of created wealth must be detailed, at a minimum, as follows:
(a) personnel and charges;
(b) taxes, fees, and contributions;
(c) interest and rents;
(d) interest on equity (JCP), dividends, and retained earnings/profits or losses of the period.
7. Commercial (trading and industrial) entities and service providers must use Model I, applicable to companies in general, while for specific activities, such as financial intermediation activities (banking financial institutions) and insurance and reinsurance, the specific models (II and III) included in this Pronouncement must be used.
8. The minimum items of the model for commercial entities (companies in general) are presented below, and the model itself is at the end of this Pronouncement.

Definitions
9. The terms below are used in this Pronouncement with the following meanings:

Added Value represents the wealth created by the company, generally measured by the difference between the value of sales and inputs acquired from third parties. It also includes the added value received in transfer, that is, produced by third parties and transferred to the entity.

Revenue from sale of goods, products, and services represents the values recognized in accounting under this title under the accrual basis and included in the Statement of Profit or Loss.

Other revenues represent values that originate, mainly, from write-offs due to alienation of non-current assets, such as results on the sale of fixed assets, investments, and other transactions included in the statement of profit or loss that do not constitute recognition of transfer to the entity of wealth created by other entities. It includes measurement adjustments (positive and negative) of non-monetary assets (fair value, net realizable value, etc.), such as biological assets, inventories, investment properties, etc. In this way, the “other revenues” item may present a negative sign and must be maintained as such.

Inputs acquired from third parties represent values related to the purchases of raw materials, merchandise, materials, energy, services, etc. that have been transformed into period expenses. While they remain in inventories, they do not constitute the formation of created and distributed wealth.

Depreciation, amortization, and depletion represent values recognized in the period result and normally used to reconcile the cash flow from operating activities with the net result of the period.

Added value received in transfer represents wealth that has not been created by the entity itself, but by third parties, and is transferred to it, such as financial revenues, equity method results, dividends, rent, royalties, etc. It must be highlighted, including to avoid double-counting in certain aggregations.

Characteristics of DVA Information
10. The DVA is based on macroeconomic concepts, seeking to present, eliminating values that represent double-counting, the portion of contribution that the entity has in the formation of Gross Domestic Product (GDP). This statement presents how much value the entity adds to inputs acquired from third parties that are sold or consumed during a certain period.
11. However, there are temporal differences between the accounting and economic models in calculating added value. Economics, for GDP calculation, is based on production, while accounting uses the accounting concept of revenue realization, that is, it is based on the accrual accounting basis. Since the moments of production realization and sales are normally different, the values calculated for wealth creation through concepts originating from Economics and those from Accounting are naturally different in each period. These differences will be smaller the smaller the differences between the beginning and ending inventories for the considered period. In other words, assuming the non-existence of beginning and ending inventories, the values found using economic and accounting concepts will converge.
12. For investors and other users, this statement provides knowledge of economic and social nature information and offers the possibility of better evaluation of the entity's activities within the society in which it is inserted. The decision of a community (Municipality, State, and the Federation itself) to receive investment may have in this statement an instrument of extreme utility and with information that, for example, the statement of results alone is not capable of offering.
13. The DVA prepared by segment (type of customers, activities, products, geographic area, and others) can represent even more valuable information in aiding the formulation of predictions.

Wealth Creation
Wealth created by the entity itself
14. The DVA, in its first part, must present in detail the wealth created by the entity. The main components of created wealth are presented below:

Revenues
Revenue from contract with customer – includes values of taxes levied on these revenues (for example, ICMS, IPI, PIS, and COFINS), that is, it corresponds to gross inflow or gross billing, even when in the Statement of Profit or Loss such taxes are outside the computation of these revenues.

Other revenues – similarly to the previous item, includes taxes levied on these revenues, when applicable.

Estimated losses with doubtful credit collection – Provision/Reversal – includes values related to the provision and reversal of these estimated losses.

Inputs acquired from third parties
Cost of products, merchandise, and services sold – includes values of raw materials acquired from third parties and contained in the cost of products sold, merchandise, and services sold acquired from third parties; does not include expenses with own personnel.

Materials, energy, third-party services, and others – includes values related to expenses originating from the use of these goods, utilities, and services acquired from third parties.

In the values of costs of products and merchandise sold, materials, services, energy, etc. consumed, taxes included at the time of purchases (for example, ICMS, IPI, PIS, and COFINS), recoverable or not, must be considered. This procedure is different from the practices used in the Statement of Profit or Loss.

Loss and recovery of asset values – Values recognized in the period result must be included, both in the provision and reversal of estimates of losses due to asset impairment, as per the application of CPC 01 – Impairment of Assets (if in the period the net value is positive, it must be added).

Depreciation, amortization, and depletion – includes the expense or cost accounted for in the period.

Added value received in transfer
Equity method result – the equity method result may represent revenue or expense; if expense, it must be considered as a reduction or negative value.

Financial revenues – includes all financial revenues, including fair value variations of recognized financial asset instruments recognized in the Statement of Profit or Loss and active exchange variations, regardless of their origin.

Other received transfers – includes dividends related to investments evaluated at cost, rents (except when it is the entity's object), franchise rights, etc.

Wealth Distribution
15. The second part of the DVA must present in detail how the wealth obtained by the entity was distributed. The main components of this distribution are presented below:

Personnel – values appropriated to cost and period result in the form of:

Direct remuneration – represented by values related to salaries, 13th salary, administrative fees (including payments based on shares), vacation, commissions, overtime, employee participation in results, etc.
Benefits – represented by values related to medical assistance, food, transportation, retirement plans, etc.
FGTS – represented by values due to employees.

Taxes, fees, and contributions – values related to income tax, social contribution on profit, contributions to INSS (including here the values of Work Accident Insurance and the “S” System) that are the employer's burden, as well as other taxes and contributions to which the company is subject. For compensable taxes, such as ICMS, IPI, PIS, and COFINS, only the values due or already collected must be considered, and they represent the difference between taxes and contributions levied on revenues and the respective values levied on items considered as “inputs acquired from third parties”.

Federal – includes taxes due to the Union, including those that are passed on in whole or in part to States, Municipalities, Autarchies, etc., such as: IRPJ, CSLL, IPI, CIDE, PIS, COFINS. It also includes the employer's union contribution.
State – includes taxes due to States, including those that are passed on in whole or in part to Municipalities, Autarchies, etc., such as ICMS and IPVA.
Municipal – includes taxes due to Municipalities, including those that are passed on in whole or in part to Autarchies, or any other entities, such as ISS and IPTU.

Remuneration of third-party capital – values paid or credited to external capital financiers.

Interest – includes financial expenses, including passive exchange variations, related to any types of loans and financing from financial institutions, group companies, or other forms of obtaining resources. It includes values that have been capitalized in the period (see item 22A).
Rents – includes rents (not recognized according to the criteria established in items 22 to 49 of CPC 06 (R2)) credited to third parties, including those added to assets.
Others – includes other remunerations that constitute transfer of wealth to third parties, even if originated in intellectual capital, such as royalties, franchise, copyrights, etc.

Remuneration of own capital – values related to remuneration attributed to partners and shareholders. The total of this group must be equal to the net result of the period, reported in the Statement of Profit or Loss.

Interest on equity (JCP) and dividends – includes values paid or credited to partners and shareholders for the result of the period, except for JCP values transferred to profit reserve accounts. Only values distributed based on the result of the own period must be included, disregarding dividends distributed based on accumulated profits from previous periods, as they have already been treated as “retained earnings” in the period in which they were generated.
Retained earnings and losses of the period – includes values related to period profit destined to reserves, including JCP when it has this treatment; in cases of loss, this value must be included with a negative sign.
Amounts destined to partners and shareholders in the form of Interest on Own Capital – JCP, regardless of whether they are registered as liability (JCP to pay) or as profit reserve, must have the same treatment given to dividends regarding the period to which they must be imputed.

Special Cases – Some Examples
Depreciation of revalued items or items evaluated at fair value.
16. The revaluation of assets and the evaluation of assets at their fair value cause changes in the company's equity structure and, therefore, normally require the accounting recording of their tax effects.
17. The company's results are affected whenever the respective revalued or fair value assets are realized. When the realization of a certain asset occurs through the normal process of depreciation, consequently, the DVA is also affected. Thus, at the moment of realization of the revaluation or fair value evaluation, this value must be included as “other revenues” in the DVA, as well as the respective taxes are recognized in the own line of taxes, fees, and contributions.

Adjustments of previous periods
18. Adjustments of previous periods, resulting from effects caused by error attributable to a previous period or the change of accounting criteria that had been used by the entity, must be adapted in the DVA relative to the oldest period presented for comparison purposes, as well as other comparative values presented, as if the new accounting practice were always in use or the error were corrected.

Assets built by the company for own use
19. The construction of assets within the company itself for its own use is a common procedure. In this construction, various production factors are used, including the hiring of external resources (for example, materials and outsourced labor) and the use of internal factors such as labor, with the consequent costs that this hiring and use provoke. For the preparation of the DVA, this construction is equivalent to production sold to the company itself, and therefore its full accounting value must be considered as revenue. Own labor allocated is considered as distribution of this created wealth, and any capitalized interest and taxes also receive this same treatment. Expenses with third-party services and materials are appropriated as inputs.
20. As such assets enter into operation, the generation of results from these assets receives treatment identical to results generated by any other asset acquired from third parties; therefore, their depreciation must also receive equal treatment.
21. To avoid the dismemberment of depreciation expenses, in the preparation of the DVA, among the components that served as the basis for the respective recording of the internally constructed asset (various materials, labor, taxes, rents, and interest), the values spent in this construction must, in the construction period, be treated as Revenues related to the construction of own assets. Similarly, the components of its cost must be allocated in the DVA following their respective natures.

The procedure referred to recognizing the values expensed in the period as other revenues, in addition to approximating the economic concept of added value, avoids additional complex controls, which can be costly, throughout the economic useful life of the asset.

Capitalized Interest

22A. Capitalized interest in the construction of assets must be recorded in the DVA as interest, in the group of remuneration of third-party capital. However, the timing of recognizing capitalized interest in the DVA depends on the asset being constructed. In the case of assets constructed by the company for its own use, both revenue and incurred costs must be recognized during construction (see items 19 to 22) and, therefore, interest must be reflected in the DVA at the moment they are capitalized in the construction asset. In the case of long-maturity inventories, on the other hand, the interest capitalized to them must be evidenced in the DVA as remuneration of third-party capital at the moment the respective inventories are written off, which does not necessarily correspond to the same period in which the interest was capitalized.

Distribution of profits related to previous fiscal years

The DVA is structured to be prepared from the Statement of Result of the period. Thus, there is a close link between these two statements and this link must serve to support consistency between them. But it also has an interface with the column of Accumulated Profits or Losses of the Statement of Changes in Equity, in the part where movements in the account relate to the distribution of the result of the period determined in the specific statement.
The entity is free, within legal limits, to distribute its accumulated profits, whether they originate from the current fiscal year or from previous fiscal years. However, due to the link referred to in the previous item, the dividends that make up the wealth distributed by the entity must be restricted exclusively to the portion related to the results of the current period. Dividends distributed related to profits from previous periods are not considered, as they already appeared as retained profits in those respective periods, which is why retained profits are considered as wealth distributed to owners.

Tax substitution

Brazilian legislation, through specific legal provisions, allows the transfer of tax liability to a third party, provided it is linked to the tax event. This transfer of responsibility, which can be total or partial and has as its main purpose the guarantee of tax collection, is carried out in two ways: progressive and regressive.
Progressive tax substitution occurs with the advance payment of the tax that will only be due in the following operation. From the perspective of the substituted taxpayer (usually manufacturer or importer), the value of the "advance tax" must be included in gross revenue and then presented as a deduction from this revenue to arrive at gross revenue.
In the case of regressive tax substitution, for example, when the merchant carries out an operation with a rural producer and is responsible for tax collection, two situations may occur: in

Financial intermediation activity (banking)
Wealth formation

The main components in the formation of wealth in this activity are presented below:
Financial intermediation revenues – includes revenues from credit operations, leasing, exchange results, securities and other instruments, and others.
Service provision revenue – includes revenues related to the collection of fees for service provision.
Estimated losses with doubtful collection credits – Constitution/Reversal – includes values related to the constitution and write-off of these estimated losses.
Other revenues – includes taxes levied on these revenues, when applicable. Includes values related to market value adjustments of investments (if in the period the net value is positive, it must be added).
In banking activity, by convention, it is assumed that financial intermediation expenses must be part of the net wealth formation and not its distribution.
Financial intermediation expenses – includes expenses with funding operations, loans, transfers, leasing, and others.
Inputs acquired from third parties
Materials, energy, and others – includes values related to expenses originating from acquisitions and payments to third parties.
Third-party services – includes personnel expenses that are not own.
Loss and Recovery of asset values – Values recognized in the period result must be included, both in the constitution and in the reversal of estimates of losses due to asset impairment, according to the application of CPC 01 – Reduction to Recoverable Value of Assets (if in the period the net value is positive, it must be added). Depreciation, amortization, and exhaustion – includes the expense accounted for in the period. Value added received in transfer Equity method result – the equity result can represent revenue or expense, with the latter being considered as a reduction or negative value.

The second part of the DVA must present in detail how the wealth obtained by the entity was distributed. The main components of this distribution are presented below:
Personnel – values appropriated to cost and to the result of the period in the form of:

Direct remuneration – values related to salaries, 13th salary, board of directors' fees, vacation, commissions, overtime, employee participation in results, etc.
Benefits – values related to medical assistance, food, transportation, retirement plans, etc.
FGTS – values due to employees and that are due to employees.
Taxes, fees, and contributions – values related to income tax, social contribution on profit, contributions to INSS (including here the values of Work Accident Insurance and the "S" System) that are the employer's burden, as well as other taxes and contributions to which the entity is subject.
Federal – includes taxes due to the Union, including those that are passed on in whole or in part to States, Municipalities, Autonomous Agencies, etc., such as: IRPJ, CSLL, etc. Also includes the union contribution.
State – includes taxes due to States, including those that are passed on in whole or in part to Municipalities, Autonomous Agencies, etc., such as IPVA.
Municipal – includes taxes due to Municipalities, including those that are passed on in whole or in part to Autonomous Agencies or any other entities, such as ISS and IPTU.
Remuneration of third-party capital - values paid or credited to external capital financiers.
Rents – rent values (not recognized according to the criteria established in items 22 to 49 of CPC 06) credited to third parties, including those added to assets.
Others – values of remunerations that constitute the transfer of wealth to third parties, even if originating from intellectual capital, such as royalties, franchise, copyright, etc.
Remuneration of own capital - values related to remuneration attributed to partners and shareholders.
Interest on own capital (JCP) and dividends – includes values paid or credited to partners and shareholders due to the result of the period, except for the values of JCP transferred to the profit reserve account. Only values distributed based on the result of the current period must be included, disregarding dividends distributed based on accumulated profits from previous fiscal years, as they have already been treated as "retained profits" in the fiscal year in which they were generated.
Retained profits and losses of the period – includes values related to the period's profit destined for reserves, including JCP when it has this treatment; in cases of loss, this value must be included with a negative sign.
Amounts destined for partners and shareholders in the form of JCP, regardless of whether they are registered as a liability (JCP payable) or as a profit reserve, must have the same treatment given to dividends regarding the period to which they must be imputed.

The main components in the formation of wealth in these activities are presented below:
Revenues from issued insurance and reinsurance operations – In the case of insurers, it includes revenues from the sale of policies and revenues related to pension plans, already net of accepted and ceded coinsurance operations and returned or canceled premiums. It also includes retrocession revenues and revenues from recovery operations with salvaged goods and reimbursement. In the case of reinsurers, it includes revenue from issued reinsurance, already net of returned or canceled premiums. It also includes retrocession revenues and revenues from recovery operations with salvaged goods and reimbursement. Other revenues – includes taxes levied on these revenues, when applicable. Estimated losses with doubtful collection credits – Constitution/Reversal – includes values related to the constitution/write-off of these estimated losses.
In insurance and reinsurance activities, retained claims and benefit and surrender expenses, which represent the total of net indemnities to be paid to policyholders, must be deducted from revenues.
Expenses with issued insurance and reinsurance operations – values of indemnities that are the responsibility of the period (regardless of whether they were notified or not). Involves both insurance products and pension products (in the latter, the value of benefits granted and surrenders effected from that period is considered). In the case of reinsurers, it involves expenses with indemnities that are the responsibility of the period of issued reinsurance. Inputs acquired from third parties Materials, energy, and others – value of materials and energy consumed, general and administrative expenses, and all those that do not have specific treatment, acquired from third parties. Third-party services, net commissions – value of resources due to third parties for service provision, in addition to commissions due to brokers. Marketing expenses – value of marketing expenses (basically, commissions) for the accrual regime according to the validity of each insurance policy. Loss and recovery of asset values – Values recognized in the period result must be included, both in the constitution and in the reversal of estimates of losses due to asset impairment, according to the application of CPC 01 – Reduction to Recoverable Value of Assets (if in the period the net value is positive, it must be added). Depreciation, amortization, and exhaustion – includes the expense accounted for in the period.

The second part of the DVA must present in detail how the wealth obtained by the entity was distributed. The main components of this distribution are presented below:
Personnel – values appropriated to cost and to the result of the period in the form of:

Direct remuneration – values related to salaries, 13th salary, board of directors' fees, vacation, commissions, overtime, employee participation in results, etc.
Benefits – values related to medical assistance, food, transportation, retirement plans, etc.
FGTS – values due to employees and that are due to employees.
Taxes, fees, and contributions – values related to income tax, social contribution on profit, contributions to INSS (including here the values of Work Accident Insurance and the "S" System) that represent the employer's burden, as well as other taxes and contributions to which the entity is subject.
Federal – includes taxes due to the Union, including those that are passed on in whole or in part to States, Municipalities, Autonomous Agencies, etc., such as: IRPJ, CSLL, etc. Also includes the union contribution.
State – includes taxes due to States, including those that are passed on in whole or in part to Municipalities, Autonomous Agencies, etc., such as IPVA.
Municipal – includes taxes due to Municipalities, including those that are passed on in whole or in part to Autonomous Agencies or any other entities, such as ISS and IPTU.
Remuneration of third-party capital – values credited to external capital financiers.
Interest – includes financial expenses related to any type of loan and financing with financial institutions, group companies, or other forms of obtaining resources. Includes values that have been activated in the period.
Rents – includes rents (not recognized according to the criteria established in items 22 to 49 of CPC 06 (R2)) credited to third parties, including those added to assets.
Others – includes other remunerations that constitute the transfer of wealth to third parties, even if originating from intellectual capital, such as royalties, franchise, copyright,

Interest on own capital (JCP) and dividends – includes values paid or credited to partners and shareholders due to the result of the period, except for the values of JCP transferred to the profit reserve account. Only values distributed based on the result of the current period must be included, disregarding dividends distributed based on accumulated profits from previous fiscal years, as they have already been treated as "retained profits" in the fiscal year in which they were generated.
Retained profits and losses of the period – includes values related to the period's profit destined for reserves, including JCP when it has this treatment; in cases of loss, this value must be included with a negative sign.
Amounts destined for partners and shareholders in the form of JCP, regardless of whether they are treated as a liability (JCP payable) or as a profit reserve, must have the same treatment given to dividends regarding the period to which they must be imputed.

TRANSITIONAL PROVISIONS

This pronouncement replaces CPC 09 – Statement of Added Value – approved by the Accounting Pronouncements Committee on October 30, 2008.

M O D E L S

Model I - Statement of Added Value – GENERAL COMPANIES DESCRIPTION In 20X1 In 20X0 1 – REVENUES 1.1) Revenue from contract with customer 1.2) Other revenues 1.3) Revenues related to the construction of own assets 1.4) Estimated losses with doubtful collection credits – Reversal / (Constitution) 2 - INPUTS ACQUIRED FROM THIRD PARTIES (includes the values of taxes – ICMS, IPI, PIS and COFINS) 2.1) Costs of products, merchandise, and services sold 2.2) Materials, energy, third-party services, and others 2.3) Loss / Recovery of asset values 2.4) Others (specify) 3 - GROSS ADDED VALUE (1-2) 4 - DEPRECIATION, AMORTIZATION, AND EXHAUSTION 5 - NET ADDED VALUE PRODUCED BY THE ENTITY (3-4) 6 - ADDED VALUE RECEIVED IN TRANSFER 6.1) Equity method result 6.2) Financial revenues 6.3) Other received transfers 7 - TOTAL ADDED VALUE TO DISTRIBUTE (5+6) 8 - DISTRIBUTION OF ADDED VALUE (*)

COMISSÃO DE VALORES MOBILIÁRIOS
Rua Sete de Setembro, 111/2-5º e 23-34º Andares, Centro, Rio de Janeiro/RJ – CEP: 20050-901 – Brasil - Tel.: (21) 3554-8686 Rua Cincinato Braga, 340/2º, 3º e 4º Andares, Bela Vista, São Paulo/ SP – CEP: 01333-010 – Brasil - Tel.: (11) 2146-2000 SCN Q.02 – Bl. A – Ed. Corporate Financial Center, S.404/4º Andar, Brasília/DF – CEP: 70712-900 – Brasil -Tel.: (61) 3327-2030/2031 www.cvm.gov.br RESOLUÇÃO CVM Nº 199, DE 9 DE FEVEREIRO DE 2024 Model II - Statement of Added Value - Banking Financial Institutions DESCRIPTION In 20X1 In 20X0 1 – REVENUES 1.1) Financial Intermediation 1.2) Service Provision 1.3) Estimated losses with doubtful collection credits – Reversal / (Constitution) 1.4) Others 2 – FINANCIAL INTERMEDIATION EXPENSES 3 - INPUTS ACQUIRED FROM THIRD PARTIES 3.1) Materials, energy, and others 3.2) Third-party services 3.3) Loss / Recovery of asset values 3.4) Others (specify) 4 - GROSS ADDED VALUE (1-2-3) 5 – DEPRECIATION, AMORTIZATION, AND EXHAUSTION 6 - NET ADDED VALUE PRODUCED BY THE ENTITY (4-5) 7 - ADDED VALUE RECEIVED IN TRANSFER 7.1) Equity method result 7.2) Other received transfers 8 - TOTAL ADDED VALUE TO DISTRIBUTE (6+7) 9 - DISTRIBUTION OF ADDED VALUE (*) 9.1) Personnel
9.1.1 – Direct remuneration
9.1.2 – Benefits

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

CVM RESOLUTION NO. 199, OF FEBRUARY 9, 2024

9.1.3 – F.G.T.S.
9.2) Taxes, fees, and contributions
9.2.1 – Federal
9.2.2 – State
9.2.3 – Municipal
9.3) Remuneration of third-party capital
9.3.1 – Rent
9.3.2 – Others
9.4) Remuneration of Own Capital
9.4.1 – Interest on Own Capital
9.4.2 – Dividends
9.4.3 – Retained earnings / Period loss
9.4.4 – Non-controlling interests' participation in retained earnings (only for consolidation)
(*) The total of item 9 must be exactly equal to item 8.

CVM RESOLUTION NO. 199, OF FEBRUARY 9, 2024

Model III - Statement of Added Value – INSURERS AND REINSURERS (model – adapted to CPC 50 – Insurance Contracts)

DESCRIPTION | In 20X1 | In 20X0
1 – REVENUES
1.1) Revenues from issued insurance and reinsurance operations 1.2) Others 1.3) Estimated losses on doubtful debt collection – Reversal / (Provision) 2 – EXPENSES 2.1) Expenses from issued insurance and reinsurance operations 2.2) Others 3 – INPUTS ACQUIRED FROM THIRD PARTIES 3.1) Materials, energy, and others 3.2) Third-party services, net commissions 3.3) Marketing expenses 3.4) Loss / Recovery of asset values 4 – GROSS ADDED VALUE (1-2-3) 5 – DEPRECIATION, AMORTIZATION, AND DEPLETION 6 – NET ADDED VALUE PRODUCED BY THE ENTITY (4-5) 7 – ADDED VALUE RECEIVED/TRANSFERRED IN TRANSFER 7.1) Financial revenues 7.2) Equity method results 7.3) Results from reinsurance operations retained 7.4) Other received transfers 8 – TOTAL ADDED VALUE TO BE DISTRIBUTED (6+7) 9 – DISTRIBUTION OF ADDED VALUE (*)

CVM RESOLUTION NO. 199, OF FEBRUARY 9, 2024

9.1) Personnel
9.1.1 – Direct remuneration
9.1.2 – Benefits
9.1.3 – F.G.T.S.
9.2) Taxes, fees, and contributions
9.2.1 – Federal
9.2.2 – State
9.2.3 – Municipal
9.3) Remuneration of third-party capital
9.3.1 – Interest
9.3.2 – Rent
9.3.3 – Others
9.4) Remuneration of Own Capital
9.4.1 – Interest on Own Capital
9.4.2 – Dividends
9.4.3 – Retained earnings / Period loss
9.4.4 – Non-controlling interests' participation in retained earnings (only for consolidation)
(*) The total of item 9 must be exactly equal to item 8.

CVM RESOLUTION NO. 199, OF FEBRUARY 9, 2024

ORIGINS AND CONCEPTUAL REASONS FOR THE PREPARATION AND DISCLOSURE OF THE STATEMENT OF ADDED VALUE

Summary Item

INTRODUCTION 1 – 4
ASSUMPTIONS FOR THE PREPARATION OF THE DVA 5 – 18
Concept of Added Value and Its Destination 5 – 10 Differences between Economic Criteria and Accounting Criteria 11 – 15 Income Statement is the fundamental basis for the preparation of the DVA 16 – 18
MODELS 19 – 43
General Model 21 – 38
Model for Financial Institutions 39 – 41
Model for Insurers and Reinsurers 42 – 43
BASES FOR CONCLUSIONS 44 – 46
UTILITY OF THE DVA AND ITS RELATIONSHIP WITH ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) INFORMATION 47 – 52
HISTORY OF THE DVA IN1 – IN13

INTRODUCTION

Technical Pronouncement CPC 09 – Statement of Added Value (DVA), in its first version, was issued by this CPC on 10/30/2008. At that time, Law No. 11.638/07 had been approved, which amended art. 176 of the Corporations Law (6.404/76) and began to require, from 2008 onwards, for public companies, the preparation and disclosure of the DVA.
Thus, the objective of CPC 09 was, and continues to be, to establish criteria for the preparation and disclosure of the Statement of Added Value (DVA), which aims to evidence the wealth created by the entity and its distribution, during a certain period.
Notwithstanding all the efforts that have been and continue to be made in Brazil to align the Brazilian accounting standard with international standards, the DVA stands out as a Statement required in our local environment, but outside the scope of IFRS (as highlighted in item 14 of IAS 1 1). For this reason, CPC 09 has no equivalent in international standards.
Given the local particularities of the DVA, this CPC understood it to be necessary to present to preparers, auditors, and users of financial statements the origins and conceptual reasons for the preparation and disclosure of the DVA, highlighting the fundamental assumptions used in the preparation of the DVA, as well as the bases for conclusions and the utility of the DVA and its relationship with environmental, social, and governance (ESG) information. At the end, context is presented for the emergence of the DVA in Brazil.

1 14. Many entities also present, outside the financial statements, reports and statements such as environmental reports and value added statements, particularly in industries in which environmental factors are significant and when employees are regarded as an important user group. Reports and statements presented outside financial statements are outside the scope of IFRS.

ASSUMPTIONS FOR THE PREPARATION OF THE DVA
Concept of Added Value and Its Destination
5. According to economic literature, added value, or value added, is a practical and operational way to measure the Gross Domestic Product (GDP) of an economy. Added value is the gross value of production minus the consumption of intermediate products, that is, it represents the value that was added to these intermediate products (raw materials, for example) at each production stage. GDP, on the other hand, can be defined as the market value of all final goods and services produced in an economy during a period. Therefore, to calculate the GDP of a country, only the market values of final goods and services must be summed. However, many goods are produced in stages. Since GDP should include only final goods and services, intermediate goods should not be added to GDP, as there would be double counting.
6. For example, if the market value of breads produced by an economy is R$1,000, and within this value, the market value of flour is included, at R$400 (which in turn includes the market value of wheat, at R$250), then the GDP of this economy is R$1,000 (and not R$1,650, which would be the sum of the market value of all invoicing used in the production line of breads). However, an alternative and practical way to calculate the same GDP of R$1,000 would be through the sum of the values added at each stage of production. With this, the added value of the wheat producer would be R$250, the added value of the flour producer would be R$150, and finally, the added value of the bread producer would be R$600.
7. From this simple example, it is possible to note a strong connection between the concepts of GDP and the economy's added value with the accounting information of any entity. Through accounting records, it is possible to evaluate what was the added value produced in a certain period by this entity, being this a portion of the GDP, that is, the added value represents the contribution of this entity to the formation of national wealth.
8. Another way to measure the economic activity of a country is through the perspective of National Income. According to Mankiw (2015) 2, National Income aims to measure how much all individuals who make up the economy earned, and this measure is approximately equal to Net National Product, which corresponds to GDP minus the depreciation of fixed capital. The depreciation of fixed capital represents a production cost for the total product of the economy.
9. National Income can be subdivided by the nature of income: wages (due to employees), interest (due to creditors), rent (due to owners of goods), and profits (due to owners of companies). Thus, the concept of National Income demonstrates how income is distributed to the owners of the factors of production. There is also the income generated by companies and distributed to the government, in the form of taxes.
10. Based on these economic concepts, it is possible to construct, from the Income Statement, the calculation of a company's added value, as well as its destination, to employees, creditors, owners, and the government. However, accounting criteria diverge, to some extent, from economic criteria. Items 11 to 15 present and discuss these differences.

Differences between Economic Criteria and Accounting Criteria
11. The DVA uses accounting data as the basis for its preparation; thus, it follows the accounting standards being used for the production of these data. Thus, naturally, there will be differences between the economic concept of added value versus the accounting concept, which does not constitute an impediment to the use of the added value concept used by accounting, since this is calculated based on consistent accounting practices and real company data, in addition to being auditable, consequently bringing greater reliability to this information.
12. For example, GDP considers the market value of goods and services produced in the economy. However, the added value calculated by accounting criteria uses the Income Statement as a basis, and this follows the Accrual Basis, thus considering that wealth was generated by the entity only when the goods and services were, in general, sold, that is, transferred to third parties. However, for certain goods valued at fair value as they are produced (sugarcane, for example), this difference does not exist.
13. Another difference between GDP under the economic approach and what would be the result of the sum of the Added Value produced by all entities in the Brazilian market is that GDP considers only the wealth generated within the country itself (hence, it is called "internal" product), while the added value calculated from the Income Statement considers all company revenues, including those obtained outside the country, which would be closer to the concept of Gross National Product (GNP).
14. Regarding depreciation (as well as amortization, depletion, and other forms of consumption of long-term assets), by economic criterion, it is not part of GDP, being precisely an item that is subtracted from GDP to obtain Net Internal Product (NIP). By accounting criterion, however, depreciation represents the consumption of long-term assets, taken to the result by estimates, according to the use of such assets; thus, it represents an input acquired from third parties, just like inventories. Therefore, the depreciation expense taken to the result reduces the net wealth produced by the entity, following the Accrual Basis.
15. There are other differences between the economic and accounting criteria, but since the fundamental objective of the DVA is not to generate macroeconomic nature information, but rather microeconomic in nature, these differences do not invalidate the utility of the information provided by the DVA, which are discussed in items 48 to 53.

Income Statement is the fundamental basis for the preparation of the DVA
16. As discussed in items IN 6 to IN 13, the DVA began to be prepared in Brazil in the 90s. At that time, there were no specific accounting standards for the preparation and disclosure of the DVA and there were no requirements (as there are today) regarding its disclosure by Public Companies. There was also no preparation and disclosure of the Comprehensive Income Statement (CIS), which only began to be practiced from 2010 onwards, with the adoption of IFRS in Brazil. Thus, the use of the Income Statement as the source of data became a practical and reliable way to operationalize the preparation of the DVA, since the preparation of the Income Statement follows consistent accounting principles and standards. However, it is emphasized that the elements of the Income Statement are presented with their values net of indirect taxes and gross of direct taxes, while the elements of the calculation of the added value of the DVA are presented gross of both direct and indirect taxes.
17. According to items 7.16 and 7.17 of CPC 00 Conceptual Framework for Financial Reporting, revenues and expenses can be classified in the Income Statement or as components of Other Comprehensive Income (OCI), being presented in the CIS. The Income Statement is the main source of information about the financial performance of the entity. However, some very specific types of revenues and expenses can be included in the CIS, at the discretion of the standard-setting bodies.
18. Considering that the Income Statement is considered the main source of information about the financial performance of an entity, and that items of revenues and expenses classified as OCI are, often, reclassified from the CIS to the Income Statement, if this results in relevant information (item 7.19 of CPC 00 Conceptual Framework for Financial Reporting); thus, notwithstanding the existence of the CIS, the Income Statement remains as the fundamental basis for the preparation of the DVA.

MODELS
19. Technical Pronouncement CPC 09 (R1) presents 3 models for the disclosure of the DVA: a general model, applicable to all companies, except financial institutions, insurance, and pension; and two specific models, one for financial institutions and another for insurance and pension institutions.
20. In the 3 models, there is a common characteristic: there are two blocks of data derived from the Income Statement, the first of which comprises elements of the formation of added value and the second presents to whom the added value demonstrated in the first block was destined, following the logic presented in items 5 to 10.

General Model
Formation of Added Value – groups 1 to 7 of the General Model
21. In the general model, group 1 of the model, intended for revenues, must contain the entity's main revenues, and any other revenues that may represent the production of wealth. It is highlighted that the values of these revenues must be presented in a gross manner, that is, before taxes on such revenues, since taxes are considered in the second block, as they represent a destination of wealth to the government. Thus, the value of group 1.1 of the model must normally be higher than the value presented as Revenue in the Income Statement, which is presented net of indirect taxes.
22. Added to revenues, in group 1 of the model, are the adjustments (positive and negative) of measurement of non-monetary assets (fair value, net realizable value, etc.), such as biological assets, inventories, investment properties, etc. These revenues (which can be negative, if the adjustment is a consequence of a reduction in the value of the corresponding asset) must be included in the DVA since, in addition to maintaining coherence with the information derived from the Income Statement, they approximate the accounting concept of wealth to the economic concept. In the same way, the results obtained on the sale of non-current assets are added.
23. Still in the first group of the model, intended for revenues, it is worth highlighting the need for recognition of revenues related to the construction of own assets (see items 19 to 22 of CPC 09 R1). This procedure is adopted since, in addition to approximating the economic concept of added value, it avoids additional complex controls throughout the useful life of the asset.
24. In group 2, which presents inputs acquired from third parties, values related to the acquisitions of raw materials, merchandise, materials, energy, services, etc., all acquired from third parties, that have been transformed into period expenses, must be included. Special attention should be paid to not directly use the value of Cost of Goods Sold (COGS), Cost of Products Sold (CPS), or Cost of Services Rendered (CSR) from the Income Statement, mainly for 2 reasons, described below.
25. The first reason is that wages, rent, depreciation, and other items that are classified in the DVA in other groups.
26. The second reason is that the values of inputs acquired from third parties allocated in the cost lines of the Income Statement are, in this statement, presented by values net of recoverable taxes. However, for the DVA, as happens with the revenue item (see item 21), inputs must also be presented in a gross manner, that is, before taxes on such presentation of the cost lines of the Income Statement is based on the presentation of the Income Statement by function, which implies that there may be different natures of costs allocated to these lines, such as inputs. This procedure serves so that the destination of wealth to the government made through these taxes is presented by the value of the tax effectively incident on the added value generated by the entity.
27. Group 1 (revenues) subtracted from group 2 (inputs acquired from third parties) results in group 3: gross added value, that is, the concept correlated to GDP/GNP, calculated at the entity level. In other words, with the exception of the differences between economic and accounting criteria (see items 11 to 15), this value represents the entity's contribution to the formation of GDP.
28. Subsequently, in group 4, values from the Income Statement related to depreciation, amortization, and depletion are deducted. As previously discussed (item 14), this group represents the long-term consumption of inputs acquired from third parties (tangible assets, intangible assets, and natural resources that gave rise to this consumption). Therefore, the depreciation, amortization, and depletion expense taken to the result reduces the wealth produced by the entity, following the Accrual Basis. After all, part of the new product is to replace wealth created previously that has now lost productive capacity, and not simply wealth added to what already existed before.
29. By subtracting from group 3 (gross added value) group 4 (depreciation, amortization, and depletion), we have group 5: net added value produced by the entity, that is, the concept correlated to NIP, calculated at the entity level. Analogously to group 3, with the exception of the differences between economic and accounting criteria (see items 11 to 15), this value represents the entity's contribution to the formation of NIP.
30. However, since the information for the preparation of the DVA is extracted from the Income Statement, and with the

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CVM RESOLUTION NO. 199, OF FEBRUARY 9, 2024

objective of maintaining consistency between these statements, Group 6 of the model was inserted:
added value received in transfer, composed mainly of results from equity participations and financial revenues. These items do not represent a genuine formation of wealth by the entity itself; however, they end up contributing to the allocation of added value to the various interested parties in the wealth of the entity reporting the DVA.

It is worth highlighting that measurement adjustments to fair value (positive or negative) arising from financial assets have the nature of financial results, and, for this reason, they are classified in the DVA as Added Value Received in Transfer, unlike adjustments arising from the measurement of non-monetary assets, which are linked to the real economy, and therefore, value increases are classified in the DVA as effective entry of wealth (as well as decreases representing an effective reduction in wealth).
Thus, adding Group 5 (net added value) to Group 6 (added value received in transfer), one obtains the total added value to be distributed.

Distribution of Added Value – Group 8 of the General Model

Group 8 of the model presents the distribution of added value, that is, using the concept of National Income, this group demonstrates how income is distributed to the owners of the factors of production (employees, external financiers, and owners), as well as income distributed to the government. For this reason, Group 8 of the model is subdivided into 4 subgroups, discussed in items 34 to 37 below.
In subgroup 8.1 of the model – Personnel – the added value destined for personnel in the form of direct remuneration, benefits, and FGTS – Guarantee Fund for Length of Service is presented. It is important to highlight that taxes levied on the payroll (such as, for example, the amount due by the employer to INSS – National Institute of Social Security) and which are the responsibility of the entity must be presented as added value destined to the government, as they do not represent taxes of the employee, but rather of the entity itself reporting.
In subgroup 8.2 of the model – Taxes, Fees, and Contributions – the added value destined to the government is presented, segregating it into Federal, State, and Municipal. As discussed in item 26, recoverable taxes (Tax on Industrialized Products – IPI, Tax on Circulation of Goods and Services - ICMS, Social Integration Program – PIS, and Contribution for the Financing of Social Security – COFINS) must be presented by the values levied on sales minus the values levied on inputs acquired from third parties.
In subgroup 8.3 of the model – Remuneration of Third-Party Capital – the values of interest, rents, and other remunerations that represent a transfer of wealth to third parties are presented. Regarding interest, it is important to mention that any financial expenses related to loans and financing with financial institutions, as well as group companies or other forms of obtaining resources, must be included. Regarding rents, the criteria established in items 22 to 49 of CPC 06 (R2) must be observed, according to which leases are recognized at the beginning of the contract as an asset (right of use) and a liability (obligation to pay the counter-performance), and, therefore, the total cost of the rent is broken down in the Income Statement into depreciation expense of the asset and interest expense of the liability over the duration of the contract. Consequently, in the DVA, the depreciation expense (amortization of the right of use)

CVM RESOLUTION NO. 199, OF FEBRUARY 9, 2024

must be allocated to Group 4 of the model and the interest expense, in this subgroup 8.3, being classified as interest, and not rent.

In subgroup 8.4 of the model – Remuneration of Own Capital – interest on own capital and dividends are presented, as well as retained earnings (or loss of the period) and the participation of non-controlling shareholders in retained earnings (only for the consolidated DVA).
It is emphasized that, in the DVA, the distribution of profits to shareholders (in the form of interest on own capital and dividends) must be composed ONLY of profits from the period of presentation, to avoid double counting with respect to previous periods. This is because, if the entity decides to distribute profits based on profits from previous periods, such profits will already have been, in previous periods, included in the DVA as remuneration of own capital, in the line of retained earnings. This segregation can, in some cases, represent a challenge to preparers of the DVA, as the distributed value is not always declared with respect to which accounting period it refers. In any case, it becomes necessary to exercise judgment so that adequate segregation is made.
As the DVA is prepared consistently with the Income Statement, the total of Group 8 must be equal to the total of Group 7. This means that, when preparing the DVA, the reporting entity must classify the revenues and expenses of its Income Statement in Block 1 (Groups 1 to 7 of the model – formation of added value) or in Block 2 (Group 8 of the model – distribution of added value).

Model for Financial Institutions

Financial Institutions play a fundamental role in the economy, acting in Financial Intermediation and promoting the growth of the money supply and liquidity.
However, according to economic concepts, GDP is determined by production, so, following this logic, such entities would not create wealth, except for the services they provide.
On the other hand, following the logic of preparing the DVA from the Income Statement for companies in general, it is possible to construct the DVA of Financial Institutions. To do so, it is assumed that the wealth created by these institutions comes mainly from the result of financial intermediation (revenues minus financial expenses) – as if it were a commission revenue for intermediation.
Therefore, the presentation model of the DVA of Financial Institutions contains two important adaptations in relation to the general model. The first of these is to transfer financial revenues, from the group of added value received in transfer to Group 1, of revenues. In addition, financial expenses are transferred from the distribution (subgroup 9.3 in the institutions model) to the formation of added value, in Group 2. With this, the gross added value of these institutions is formed by revenues (including those from financial intermediation) minus financial intermediation expenses and inputs acquired from third parties, such as materials, electricity, third-party services, among others. And in the distribution of added value, there will be no distribution in the form of financial expenses.

Model for Insurance and Reinsurance Companies

The third DVA model is adapted to Insurance and Reinsurance Institutions. For these entities, the adaptations in relation to the general model are more technical and terminological, adapting the account names to the reality of the operations of such entities.

CVM RESOLUTION NO. 199, OF FEBRUARY 9, 2024

With such adaptations, the gross added value is formed by the revenues of these entities minus the expenses with insurance and reinsurance operations issued and minus the inputs acquired from third parties. The result with reinsurance operations held is also included in the added value received in transfer.

BASES FOR CONCLUSIONS

Measurement adjustments of non-monetary assets (fair value, net realizable value, etc.), such as biological assets, inventories, investment properties, etc., are recognized in the period result and, therefore, must be recognized in the DVA. This Committee understands that this variation, positive or negative, refers to the wealth generated by the entity through its activities and, therefore, must be included in Group 1 as Other Revenues. There are some defenders that the negative variation should not be considered in Group 1, due to its negative characteristic. But, this committee understands that, in the same way that net financial revenues of inflationary effects can result in negative values, and represent negative financial revenues, the negative value variation can also be considered as a negative wealth generated. Also in other revenues there is controversy regarding the classification of the result from the alienation of non-current assets, which could have the sales value classified as wealth generated and the written-down cost value as inputs acquired from third parties. This committee understands that, in the same way that measurement adjustments of non-monetary assets must be considered as revenue, the result from the alienation of non-current assets must be considered as wealth generated by the entity, even if negative.
Depreciation, amortization, and depletion, as mentioned by Santos 3, is one of the most controversial classifications around the world. If we consider that depreciation is the constitution of a fund for the replacement of the assets that gave rise to it, it should be classified as an element that constitutes added value. If we consider that depreciable assets are fixed capital and depreciation is a mere amortization of its cost over time, it should not appear in the DVA. Finally, if we consider that depreciation is the consumption of the asset for the entity's revenue generation process, such as the consumption of other inputs acquired from third parties, it should have the same treatment as these inputs.
This committee understands that, in line with what IFRS prescribes, depreciation is the consumption of an asset and that, therefore, it should have a treatment similar to that of other inputs acquired from third parties. However, it opted to present it separately from other inputs, due to its peculiarity regarding the duration of its consumption, which is different from other inputs acquired from third parties.
Regarding the distribution of generated wealth to personnel, there is a possible controversy regarding the classification of liberal professionals and individual companies, whether they should be considered as distribution to personnel or as inputs acquired from third parties. If it is considered that liberal professionals and individual companies can have a strong link with the reporting entity, having the same work essence as an employee hired under the CLT 4 regime, this value should be considered as distribution to personnel. If it is considered that these liberal professionals and
3 Santos, A. dos. (2007) Demonstração do Valor Adicionado: Como elaborar e analisar a DVA. São Paulo, Atlas.
4 Consolidation of Labor Laws.

CVM RESOLUTION NO. 199, OF FEBRUARY 9, 2024

individual companies are third parties to the entity, the best classification in the DVA is as inputs acquired from third parties. This committee understands that, in most cases, the best classification will be as inputs acquired from third parties, however, it recommends that the essence over form should always be considered in the preparation of the DVA by companies.

USEFULNESS OF THE DVA AND ITS RELATIONSHIP WITH ENVIRONMENTAL, SOCIAL, AND GOVERNANCE (ESG) INFORMATION

From the DVA, analyses can be made on the wealth generated by entities and its distribution to different stakeholders that are not possible to be analyzed by other accounting statements.
Through the vertical analysis of the DVA, the percentage of distribution of wealth to employees, government, creditors, and owners can be extracted. By combining this vertical analysis with horizontal analysis, it is possible to verify the behavior of this distribution over time. This analysis can also be useful by aggregating entities from the same sector, enabling an analysis of the sectoral behavior of this distribution. For example, distribution to the government is an important indicator of the entity's tax burden, and its behavior can be compared over time and between different sectors. Similarly, it is possible to compare between different entities and sectors how much of the entity's wealth is destined for its collaborators, its owners, and third parties.
The analysis of the DVA can also be carried out by combining its information with market variables, to verify how the company's wealth generation capacity and its distribution behave in different economic environments. It is also possible to combine it with internal company variables, such as, for example, number of employees, revenues, total assets, and equity, to extract indicators of labor productivity and sales, volume of capital applied in wealth generation, and ratio between capital remuneration and financing of total assets 5.
The DVA is aligned with the generation of ESG information and, more broadly, sustainability information, as it brings quantitative measures of the wealth generated by the entity and how its distribution behaves.
In addition to bringing an important wealth of information, the DVA can be easily assured, that is, it is verifiable and demonstrates with transparency the company's behavior with different stakeholders.
The Global Reporting Initiative (GRI) plays an important international role in the generation of sustainability information standards and one of the indicators constant in the GRI 201 performance standard is the direct economic value generated and distributed (GRI 201-1). This is because added value and its distribution represents an important economic information of the entity and its relationship with society. This reinforces the importance of the DVA, which is a much broader statement than GRI 201-1 and which has importance in the world market.

5 See: Santos, A. dos, op. cit.

HISTORY OF THE DVA

BEGINNINGS OF THE DVA IN EUROPE

IN1. The first appearances of the DVA in corporate reports are dated from the second half of the 1970s, in England. At that time, according to Morley (1979) 6, approximately 25 of the 100 largest companies were voluntarily disclosing the DVA in their annual reports.

IN2. According to Meek & Gray (1988) 7, in 1975, the accounting standards issuing body in the United Kingdom (Accounting Standards Steering Committee – ASSC) recommended that British companies publish the DVA, in a document titled “The Corporate Reporting”. In the reasons for such a recommendation, the ASSC justifies that the simplest and most immediate way to insert profits in a more adequate perspective, considering the company from the collective effort of capital and labor (managers and other employees), is through the disclosure of the DVA. While profits are an essential part of any economy, this is only part of the added value of a company. In addition to profit, there is added value distributed to employees, creditors, and the government. The interdependence between these elements is more evident in the DVA. Therefore, the DVA would be a complementary statement to the Statement of Profit or Loss.

IN3. Meek & Gray (1988) 8, when suggesting the disclosure of the DVA for the US market, argue that a company's activities affect much more than just the owners (focus of the Income Statement), after all, businesses create wealth, employ people, remunerate investors and creditors for providing risk capital, and finally pay taxes. In this sense, the DVA could provide supplementary information to other financial statements, redirecting attention to broader implications of corporate activity.

IN4. Evraert & Riahi‐Belkaoui (1998) 9 also document in the 70s an increase in the use of the DVA in the United Kingdom, France, and Germany, as well as the recommendation, by the American Accounting Association Committee in 1991, of mandatory disclosure of the DVA in the American market.

IN5. Despite such records, neither the FASB nor the IASB adopted mandatory disclosure of the DVA. In item 14 of IAS 1, the IASB records the existence of the DVA, allowing its disclosure, but keeping it outside the scope of IFRS.

EMERGENCE OF THE DVA IN BRAZIL

IN6. In Brazil, the first references to the DVA began in the 1990s. In 1992, the Securities and Exchange Commission - CVM, through CVM Orientation Opinion No. 24/1992 10, encouraged the disclosure of the DVA as a complementary statement. In the second half of this decade, FIPECAFI 11 elaborated and published the first model for preparing the DVA, which began to be used for the construction of the Corporate Excellence Ranking, published in the Revista Exame Melhores & Maiores.

IN7. In 1999, the seminal work in Brazil on the DVA was published, titled “DVA – An Instrument for Measuring the Generation and Distribution of Wealth in Companies”12. This work became one of the main references for subsequent research as well as for accounting practice.

IN8. On January 19, 2000, the CVM sent to the Chamber of Deputies the Draft Law for the reform of Law No. 6.404/76, from work carried out by the Advisory Commission on Accounting Standards 13. In the same year, the CVM published CVM/SNC/SEP Circular Letter No. 1/2000, suggesting the use of the model elaborated by FIPECAFI.

IN9. The proposal for the reform of Law No. 6.404/76 was converted into Bill No. 3.741/2000, published on November 10 of that year 14. In the aforementioned project, it was proposed to include the DVA (item V of art. 176) as part of the mandatory financial statements to be prepared and published by Joint Stock Companies.

IN10. In 2002, ANEEL (National Electric Energy Agency) began to require companies in the electric sector to prepare and publish the DVA, following the model elaborated by FIPECAFI.

IN11. In 2004, the CVM, in its Circular Letter CVM/SNC/SEP No. 1/2004 15, reinforced the importance and usefulness of the DVA and, considering that open companies were increasingly adhering to the disclosure of the DVA, presented in this document a simplified model of DVA (based on the FIPECAFI model), with instructions for its completion.

IN12. After several years of proceedings and debates, Bill No. 3.741/2000 was finally converted into Law No. 11.638/2007, on December 28 of that year. However, unlike what was provided for in the original project, the preparation and publication of the DVA was restricted only to open companies.

IN13. After the publication of Technical Pronouncement CPC 09 – Statement of Added Value (DVA) in 2008, open companies began to prepare and disclose the DVA. However, this CPC noted, over these years, that there are still difficulties in understanding both the requirements of CPC 09 and the information generated from the DVA itself. Thus, it was decided to present to the market an explanatory document, with the objective of improving the quality of accounting information presented in the DVA and, consequently, increasing its usefulness to its users.

6 Morley, M. F. (1979). The Value Added Statement in Britain. The Accounting Review, 54(3), 618–629. http://www.jstor.org/stable/245988 7 Meek, G., & Gray, S. (1988). The value added statement: an innovation for US companies. Accounting Horizons, 2(2), 73-81.
8 Meek & Gray, op. cit.
9 Evraert, S., & Riahi‐Belkaoui, A. (1998). Usefulness of value added reporting: a review and synthesis of the literature. Managerial Finance, 24(11), 1–15. https://doi.org/10.1108/03074359810765679 10 https://conteudo.cvm.gov.br/export/sites/cvm/legislacao/pareceres-orientacao/anexos/pare024.pdf

CVM RESOLUTION NO. 199, OF FEBRUARY 9, 2024

11 Accounting, Actuarial and Financial Research Institute Foundation (FIPECAFI) 12 Free docent thesis by Prof. Ariovaldo dos Santos, from the University of São Paulo (USP).
13http://imagem.camara.gov.br/MostraIntegraImagem.asp?strSiglaProp=MSC&intProp=1657&intAnoProp=2000&int ParteProp=1#/14http://imagem.camara.gov.br/Imagem/d/pdf/DCD10NOV2000.pdf, p. 56003.
15https://conteudo.cvm.gov.br/export/sites/cvm/legislacao/oficios-circulares/snc-sep/anexos/oc-snc-sep-0104.pdf

CVM Resolution No. 199 of February 9, 2024

Lineage: In force

Timeline