CVM Resolution No. 28 of April 16, 2021

SECURITY AND EXCHANGE COMMISSION OF BRAZIL (CVM) Seven of September Street, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – CEP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Cincinato Braga Street, 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. 28, OF APRIL 16, 2021
Approves the Technical Pronouncement CPC for Entities in Liquidation.

The PRESIDENT OF THE SECURITY AND EXCHANGE COMMISSION OF BRAZIL – CVM makes public that the Board, in a meeting held on April 14, 2021, 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 makes mandatory for open-capital companies the Technical Pronouncement CPC for Entities in Liquidation, issued by the Accounting Pronouncements Committee - CPC, annexed to this Resolution.

Art. 2. This Resolution enters into force on June 1, 2021, with early adoption permitted.

Signed electronically by
MARCELO BARBOSA
President

CVM RESOLUTION NO. 28, OF APRIL 16, 2021
ACCOUNTING PRONOUNCEMENTS COMMITTEE
TECHNICAL PRONOUNCEMENT CPC FOR ENTITIES IN LIQUIDATION

Table of Contents Item
INTRODUCTION
OBJECTIVE 1
SCOPE 2 – 6
DEFINITIONS 7 – 20
RECOGNITION AND MEASUREMENT 21 – 34
DISCLOSURE 39 – 54
ADOPTION DATE OF THIS PRONOUNCEMENT 55 – 56
EFFECTIVE DATE 57
Appendix – Examples

INTRODUCTION
Entities in liquidation have special characteristics and needs, so that the bases for preparing their financial statements must be distinct from those applicable to entities as going concerns.

The accounting pronouncements issued by the Accounting Pronouncements Committee (CPC) and the IFRS, issued by the IASB, are primarily oriented towards Entities that operate under the going concern assumption, notwithstanding they make explicit references that, in situations where the statements are not prepared under the going concern assumption, the fact must be disclosed along with the new preparation bases.

In this sense, Technical Pronouncement CPC 26 – Presentation of Financial Statements, in its paragraph 29, specifically states that “financial statements must be prepared under the going concern assumption, unless management intends to liquidate the entity or cease its operations, or has no realistic alternative but to discontinue its activities. (...) When financial statements are not prepared under the going concern assumption, this fact must be disclosed, along with the bases on which the financial statements were prepared and the reason why the going concern assumption of the entity is not made.” (n.a.)

There is also reference in the same sense in Technical Pronouncement CPC 00 (R2) – Conceptual Framework for Financial Reporting, which in its item 3.9, states: “it is presumed that the entity does not have the intention or need to enter into liquidation or cease trading. If there is this intention or need, the financial statements may have to be prepared on a different basis. If so, the financial statements describe the basis used.” (n.a.)

Thus, both the Conceptual Framework and CPC 26 determine that, if the going concern assumption is no longer present, other bases for accounting for economic events may be used. However, these are the only mentions regarding criteria for recognition, measurement, and disclosure of asset elements applicable to entities in liquidation present in the normative framework of the IASB and CPC.

In Brazil, there is only a specific standard issued by the Central Bank for entities in liquidation, applicable only to entities regulated by it. For other entities, there is no accounting standard applicable when in a liquidation situation, whether forced or voluntary.

Thus, what came to the knowledge of the Federal Council of Accounting and the CPC is that there would be a diversity of practices among Entities that enter into a regime of non-continuity of normal activities, especially those in the liquidation process and, more specifically, those in the bankruptcy process.

In this sense, in order to fill this regulatory gap, and above all to try to obtain a desired uniformity in the application of accounting practices, it was deemed necessary to give a response to this particular issue, through a specific standard for entities in liquidation, which indicates the bases by which their financial statements must be prepared.

In this context, the Federal Council of Accounting began studies on the subject and, subsequently, invited the CPC to join these efforts.

Following guidance contained in IAS 8 / Technical Pronouncement CPC 23 - Accounting Policies, Changes in Accounting Estimates and Errors, which mentions, in its paragraph 12, that, when exercising judgments for the development of accounting policies in the absence of a standard applicable to specific situations, the entity may also “consider the most recent technical positions assumed by other accounting standard-setting bodies that use a conceptual framework similar to that of the CPC (...) or still, other accounting literature and generally accepted practices of the sector” (n.a.). However, such policies must not conflict with existing regulatory requirements and the definitions contained in the Conceptual Framework.

Therefore, considering the absence of a specific standard issued by the IASB for the preparation of this Pronouncement, some concepts from the specific standard issued by the FASB (Presentation of Financial Statements – Topic 205 – Liquidation Basis of Accounting), the US standard-setting body, were taken as a starting point.

Within this context, this Pronouncement presents criteria for recognition, measurement, and disclosure of asset elements, preparation of financial statements by entities in liquidation, and additional disclosures. Since it is applicable in situations where the going concern assumption does not exist, criteria for recognition of assets and liabilities and their measurement bases are, for the most part, distinct from those applicable to entities as going concerns. Likewise, the required financial statements are also different from those prepared under the going concern assumption.

Thus, the declaration of conformity to this Pronouncement makes it clear to users of the information that the financial statements are not being prepared based on standards for entities as going concerns, but rather with distinct bases of recognition and measurement, applicable exclusively for entities in liquidation.

The concept that the accounting guidelines applicable to entities as going concerns should not be applied to those entities in liquidation is present in the most used book of Accounting Theory1. In Brazil, the main author of Accounting Theory2 also follows the same line. The FASB does not give the right of choice, but obliges entities in liquidation to follow a specific standard, with accounting bases distinct from those applied to entities as going concerns. Finally, the CVM itself endorsed the Basic Conceptual Structure of IBRACON, which was in force from 1986 until the adoption of international standards in Brazil, where the concept that the accounting procedures of entities in liquidation must be distinct from those as going concerns was also included.

Thus, this Pronouncement is based on the specific standard issued by the FASB and complemented by items contained in IFRS/CPC standards in order to try to achieve a desired uniformity regarding Entities in Liquidation.

For this reason, the understanding of the CPC is that, with this, a new standard is being introduced regarding the current accounting practices adopted in Brazil, applicable to entities in operational continuity, but harmonious, as is the case, for example, with CPC-PME, which is a standard distinct from the full CPC/IFRS, but also harmonized with this high-quality standard and internationally recognized.

Furthermore, in line with the Conceptual Framework and CPC 26, the Pronouncement maintains the requirement to disclose the non-existence of the going concern assumption, as well as the bases adopted for the preparation of the financial statements of entities in liquidation.

1 Hendriksen, E. S. Van Breda, M. F. Accounting Theory. São Paulo: Atlas, 1999.
2 Iudícibus, S. Accounting Theory. 11th ed. São Paulo: Atlas, 2015.

OBJECTIVE

This Pronouncement establishes specific accounting criteria and procedures for an entity in liquidation.

SCOPE
2. This Pronouncement must be adopted by any entity in liquidation, whether voluntary liquidation, liquidation by a regulatory entity, extrajudicial liquidation, judicial liquidation, self-bankruptcy, bankruptcy, civil insolvency, and any other form of liquidation that law or regulation may define, regardless of which standard was being followed by the entity before entering the liquidation process. If any transaction or economic event does not have specific guidance in this Pronouncement regarding the accounting treatment to be adopted, the guidance must be obtained from the accounting standards applicable to the company as a going concern.
3. This Pronouncement does not apply to an entity in judicial or extrajudicial recovery process, which must continue to prepare accounting records according to the Norms to which it was subject before the start of the recovery and must also meet the requirements of specific regulation on the process in which it is found.
4. This Pronouncement does not apply in its entirety to an entity subject to its own regulatory body that has specific criteria and procedures for this situation.
5. This Pronouncement does not apply to entities whose liquidation is provided for in their constitutive documents. For these entities, even if the liquidation process is already occurring, the accounting pronouncements applicable to entities as going concerns must be adopted for the preparation of their financial statements until the cessation of activities and entry into an effective liquidation process.
6. The entity must prepare and disclose its financial statements according to this Pronouncement, from the moment it starts the liquidation process, regardless of the reporting period to which it is subject, monthly or annually, according to the specificity of the entity.

DEFINITIONS
7. Liquidation is the process by which the entity converts its assets into cash or other assets and settles its obligations with creditors and distributes to holders of residual interests any remaining balance, aiming at its extinction. Liquidation can be compulsory or voluntary, whereby:

(a) the extinction of the entity as a result of merger, incorporation, or spin-off does not qualify as liquidation; (b) an entity with a probability of losing the condition of normal continuity of its business, or even a significant reduction in its activities, does not yet qualify as in liquidation.

Entity in liquidation is the entity that is in the process of liquidation, provided that its liquidation is not provided for in its constitutive documents. For the entity to be in the process of liquidation, one or more of the following criteria must be observed:
(a) A plan for the liquidation of the entity has been approved by person(s) with authority to make such a plan effective and the occurrence of one or both of the following factors is considered remote:
i. The execution of the liquidation plan will be interrupted by third parties (for example, those with rights as partners, shareholders, or unitholders); and
ii. The entity will cease to be in liquidation.
(b) A liquidation plan has been imposed by third parties (for example, involuntary bankruptcy) and the possibility that the entity will cease to be in liquidation is considered remote.
Start date of liquidation is the date on which the fact(s) that transform the entity into an entity in liquidation is/are completed, at which point the provisions of this Pronouncement become applicable.
Net assets represent the difference between the assets and liabilities of the entity in liquidation as recognized and measured based on the provisions of this Pronouncement. Net assets can be positive, showing a balance to be distributed to holders of corporate rights at the end of liquidation, or negative, indicating the insufficiency of resources to pay creditors.
Statement of Net Assets of entity in liquidation is the financial statement that presents the assets and liabilities of the entity, as well as its positive or negative net assets.
Statement of Changes in Net Assets of entity in liquidation is the financial statement that presents the changes in the assets and liabilities of the entity, as well as its net assets.
Statement of Cash Flows of entity in liquidation is the financial statement prepared by the direct method that evidences cash inflows from the sales of assets, cash outflows for the settlement of liabilities, cash outflows for the payment of liquidation expenses, and other cash inflows and outflows.
Statement of Liquidation Currency is the statement that evidences the percentage relationship between assets and liabilities by class of assets.
Fair value is the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date.
Liquidation value is the expected net value from the realization of the asset. Generally, it refers to the estimated selling price of an asset minus the expenses necessary to effect the sale, whereby:
(a) the liquidation value of non-monetary assets, for the purposes of this Pronouncement, refers to the net amount that the entity expects to realize from the sale of the asset under the normal conditions of an entity in liquidation, which includes the possibility of forced sale; (b) in calculating the liquidation value of non-monetary assets, any estimated expenses to place the asset in saleable conditions must be deducted, in addition to the sales expenses themselves (taxes, commissions, delivery, etc.); (c) selling prices must take into account the market conditions existing at the date of preparation of the statements provided for in this Pronouncement; considerations regarding possible modifications of these prices, up or down, expected for the future, must be the subject of a specific explanatory note; (d) in cases where there is no intention to sell a non-monetary asset, but its delivery to settle a specific liability, the liquidation value, for the purposes of this Pronouncement, will be the value of the liability to be settled, duly measured based on the criteria indicated in this Pronouncement, considering the same deductions provided for in items (b) and (c) above; and (e) the liquidation value of monetary assets, for the purposes of this Pronouncement, refers to the amount expected to be received in cash, minus any estimated expenses for negotiation and collection.
Determined liabilities are those identified objectively, based on formal accounting records, from verifiable evidence or documents presented by creditors and that can be measured reliably. They are commonly referred to as “liquid liabilities” in the language used in bankrupt companies.
Provisions are uncertain debts, arising from past events, that depend on a future event to reach the target value. They differ from the provisions contained in Technical Pronouncement CPC 25 – Provisions, Contingent Liabilities and Contingent Assets only in their recognition criterion, as set out in item 25. They are commonly referred to as “illiquid liabilities” in the language used in bankrupt companies.
Contingent liabilities are Provisions, as defined in this Pronouncement, whose probability of occurrence is remote or that cannot be measured on a reliable basis, as well as liabilities that depend on a future event that serves as their generating fact. They differ from the contingent liabilities contained in Technical Pronouncement CPC 25 – Provisions, Contingent Liabilities and Contingent Assets only in their recognition criterion, as set out in item 27.
Opening Statement of Net Assets (fresh-start), for the purposes of this Pronouncement, is the first statement of net assets in liquidation, obtained from the last balance sheet prepared under the going concern assumption. In the impossibility of obtaining this balance sheet, this statement will consist of the inventory of assets and liabilities measured according to this Pronouncement, on the date of the start of the liquidation process.

RECOGNITION AND MEASUREMENT
21. Assets must be recognized when there is reasonable assurance that sale or realization will occur for payment of liabilities. Assets that do not present reasonable assurance regarding their sale or realization must be disclosed in explanatory notes.

Entities in liquidation must prepare their financial statements under the assumption of non-continuity of operations. For this reason, assets must be measured following the following order of criteria:
(a) liquidation value;
(b) fair value less costs to sell, until a measurement of the liquidation value becomes available (fair value metrics must be those contained in Technical Pronouncement CPC 46 – Fair Value Measurement); and (c) historical cost, considering any impairment losses, minus estimated expenses for realization, in exceptional situations, while the previous alternatives are not available.
When assets are not measured at liquidation value, the justifications for adopting another criterion must be disclosed in the explanatory notes.

SECURITY AND EXCHANGE COMMISSION OF BRAZIL (CVM)

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CVM RESOLUTION NO. 28, OF APRIL 16, 2021

Net liabilities shall be measured at their formal and legally owed values. Provisions shall be measured based on the best estimate of the outflow of resources required to settle the present obligation at the date of the Statement of Net Assets.
Provisions, unlike what is required by Technical Pronouncement CPC 25 – Provisions, Contingent Liabilities and Contingent Assets, shall be recognized in the Statement of Net Assets when the probability of an outflow of assets for their settlement is considered possible or probable.
In bankruptcy proceedings, a judicial determination may be necessary for the recognition of net liabilities and provisions.
Contingent Liabilities shall not be recognized in the Statement of Net Assets, but, unlike what is required by Technical Pronouncement CPC 25 – Provisions, Contingent Liabilities and Contingent Assets, they shall always be disclosed in the explanatory notes, regardless of whether they are provisions without the possibility of objective measurement, provisions whose outflow of resources for their settlement is considered remote, or liabilities dependent on future events with some possibility of occurrence.
The entity in liquidation must recognize as a liability all costs and expenses, net of any revenues, that it expects to incur until the end of its liquidation, including legal and administrative expenses. If there is no reasonable basis for this estimate, the fact must be disclosed in an explanatory note.
Potential asset and liability elements that were not recognized on the date of entry into liquidation due to error, omission, fraud, or by virtue of a valid accounting standard previously in effect before entry into liquidation (such as in the case of certain intangible assets) must be recognized according to the conditions established in this Pronouncement.
On the date of the start of the liquidation process, the entity must prepare a statement from the inventory of known and measurable assets and liabilities (Opening Statement of Net Assets). If it is not possible for all assets and liabilities to be valued in accordance with this Pronouncement, this fact must be clearly disclosed in the explanatory notes, and adjustments must be made as soon as the situation allows.
Reductions in liabilities shall not be recognized based on the expectation of future negotiation results, but only when there is legal certainty that the outflow of assets for their settlement will be lower than the value originally recognized.
Unless in circumstances where there are contrary legal and/or regulatory requirements, the entity may adopt special bookkeeping that includes all records, histories, and dates of events to prepare the accounting statements required by this Pronouncement. The bookkeeping may be prepared according to the model presented in the Appendix of this Standard.
In the case of an entity in liquidation that has authorization from a competent body to continue operating, partially or totally, it must, nevertheless, observe the provisions of this Pronouncement.
In the rare case that the entity returns to the hypothesis of operational continuity, the entity must prepare its new accounting statements based on the continuity assumption following the guidelines of CPC 37 – Initial Adoption of International Accounting Standards. These new statements must have as their initial date the one on which the entity ceases to be classified as an entity in liquidation.

DISCLOSURE

The statements required for entities in liquidation are: Statement of Net Assets, Statement of Changes in Net Assets, Statement of Cash Flows, and, in cases of bankruptcy and others when necessary, the Statement of Liquidation Currency, complemented by the Explanatory Notes.
The Statement of Liquidation Currency shall be disclosed, evidencing the percentage relationship between net assets and net liabilities, considering the order of preference established by legal provisions. All allocations made must be disclosed throughout the liquidation process in a cumulative manner.
The costs necessary to bring the asset to the condition of sale and the sales expenses themselves must be evidenced in an explanatory note, deducting them from the estimated sale value of the asset to which they refer.
In some situations, such as in the case of bankruptcies, the costs and expenses necessary to bring the asset to the condition of sale and the sales expenses must be recognized as liabilities, by virtue of specific legislation. Only in these cases where specific legislation exists, such costs and expenses may be recognized as a liability of the entity and not as reducers of the asset. In these circumstances, it must be evidenced in an explanatory note that the value of the asset is not recognized by the liquidation value net of such costs and expenses.
Assets and liabilities must be evidenced in the order provided for in specific legislation or regulation, when applicable. In the case of voluntary liquidation or where there is no legal or regulatory provision for the order of disclosure of assets and/or liabilities, assets must be evidenced in decreasing order of liquidity and liabilities must be evidenced in decreasing order of exigibility.
The Statement of Changes in Net Assets of an entity in liquidation must evidence, among other items, the costs incurred and expected related to the liquidation process, the reversals of values previously provided for, the variations in the valuation of assets and liabilities, and the variations in net assets.
When there is a legal requirement, such as in the case of bankruptcy, or even interest, without regulatory requirement to demonstrate liabilities according to their legal definitions, such classifications must be made, whenever possible, without prejudice to the presentation of their respective economic natures and classifications contained in this Pronouncement. The Appendix of this Pronouncement brings suggestions on how such evidences can be carried out.
The Statement of Cash Flows of an Entity in Liquidation must follow the structure determined in this Pronouncement and does not coincide with the statement provided in Technical Pronouncement CPC 03 – Statement of Cash Flows and must present, among other items, the inflows from the realization of assets and the settlements of liabilities always by the direct method.
The entity in liquidation must expressly mention that it is in this situation in its accounting statements. When this Pronouncement is applied for the preparation of accounting statements, the explanatory notes must contain a declaration of conformity that all requirements of this Pronouncement are being fully complied with. In the case of effective and proven impossibility of compliance, the fact and the estimated effect must be disclosed in a specific explanatory note.
The plan for the liquidation of the entity must be disclosed in the explanatory notes, including each of the following points:
(a) the manner in which it expects to dispose of its assets; (b) the form by which it plans to settle its liabilities; (c) a schedule, at least annual, for the realization of its assets and settlement of its liabilities; and (d) the date on which the entity expects to complete the liquidation.
In the explanatory note of the operational context, relevant aspects of the current stage of the execution of the liquidation plan must also be disclosed.
The criteria for the valuation of assets and liabilities of the entity in liquidation must be disclosed in the explanatory notes, as well as the methodology and information sources used to measure assets at their liquidation values. The criteria for recording and measuring liabilities must also be disclosed, observing the concepts of materiality and relevance.
When assets or liabilities cannot be valued in accordance with this Pronouncement, the reason for this impossibility must be clearly evidenced in an explanatory note. If there are only indications of these values, but not sufficient for their accounting recognition, they must also be disclosed in the explanatory notes with the appropriate clarifications of the reasons for this impossibility, range of value, probability of realization, and other information deemed necessary for the perception of the equity position and its changes by management and external users, mainly creditors.
The assets and liabilities registered up to the date of the start of the liquidation process and not identified or ratified in the liquidation process, as well as those not registered up to that date and incorporated subsequently, must be disclosed. In the case of impossibility of compliance with this item, the fact must be disclosed in an explanatory note.
In cases where there is regular accounting bookkeeping before the date of the start of the liquidation process, the Opening Statement of Net Assets must contain a comparative column with the accounting balances existing before that date.
All accounting disclosure provisions contained in other Technical Pronouncements of the CPC that do not contradict this Pronouncement apply.

ADOPTION DATE OF THIS PRONOUNCEMENT

The liquidation-based records contained in this Pronouncement, as well as the accounting statements required herein, must be applied prospectively, from the date of the start of the liquidation process. The Opening Statement of Net Assets must be prepared using this date as the basis for the necessary surveys for its realization.
In the case of entities already in the liquidation process, the records contained in this Pronouncement, as well as the accounting statements required herein, must be applied from the first presentation of the Statement of Net Assets prepared from the effectiveness of this Pronouncement. This first presentation must comply with the period provided for in item 6.

EFFECTIVENESS

This Pronouncement enters into force from the determination of each regulatory body.

APPENDIX
(This Appendix is an integral part of this Pronouncement.)

SPECIAL BOOKKEEPING

A.1. The bookkeeping may be executed according to the current norms for the use of the Daily and Ledger Books, or according to the option described in item 32, taking into account the following model, which, in addition to evidencing individualized records, allows the individual movement of each accounting account moved to be visualized. This simplified model allows the visualization, at the same time, of what would be obtained from the Daily and Ledger Books:

Date (a)	Description (b)	Maintenance Expenses (c)	D/C (d)	Land in Municipality X (c)	D/C (d)	Banks Judicial Account (c)	D/C (d)	Obligation resulting from liquidation (c)	D/C (d)	Sum D/C (e)
01/05/X0	Initial Balance	-	-	-	-	-	-	-	-	0.00
01/05/X0	Sale of land lot in Municipality X	-	10,000.00 C	10,000.00 D	-	-	-	0.00	-	-
01/05/X0	Payment of maintenance expenses	500.00 D	-	500.00 C	-	-	-	0.00	-	-
31/5/X0	Recognition of maintenance expense	50.00 D	-	-	-	-	-	50.00 C	-	-
Total for May/X0		550.00 D	10,000.00 C	9,500.00 D	50.00 C	0.00	-	-	-	-

Where:
a. Date of transaction b. Transaction history
c. Accounting account moved
d. Nature of the accounting entry: debit or credit e. Verification of double-entry bookkeeping

ACCOUNTING STATEMENTS

A.2. The Accounting Statements described in the body of this Standard, items 11 and 12, may be prepared taking into account the models below. There is no intention that any model be exhaustive and capable of predicting all possible economic realities, and therefore, it must be adopted with the due adaptations.

A) General Model for Entities in Liquidation – Initial Moment of Liquidation

Opening Statement of Net Assets - DAL

	Continuity Closing	Adjustments Not Cash for DAL	Opening DAL
ASSETS
Cash and Eq. Cash	12,500	0	12,500
Financial Applications	5,000	0	5,000
Accounts Receivable	52,000	(12,000)	40,000
Inventories	86,000	18,000	104,000
Taxes to Compensate	65,000	(45,000)	20,000
Judicial Deposits	89,000	0	89,000
Fixed Assets
Vehicles	168,000	12,000	180,000
Real Estate	650,000	120,000	770,000
Intangible
Patent	0	10,000	10,000
Software	35,000	(35,000)	0
Total Assets	1,162,500	68,000	1,230,500
LIABILITIES
Net Liabilities
Deferred Revenues	53,000	0	53,000
Liquidation Expenses	0	120,000	120,000
Salaries and Charges	269,000	0	269,000
Tax Obligations	348,000	0	348,000
Suppliers	289,000	0	289,000
Loans	689,000	0	689,000
Provisions
Labor Provisions	12,000	13,000	25,000
Tax Provisions	0	153,000	153,000
Civil Provisions	0	89,000	89,000
Total Liabilities	1,660,000	375,000	2,035,000
Net Assets	(497,500)	(307,000)	(804,500)

A.3. The bases of measurement for the adjustments presented must be indicated in the respective explanatory notes.

A.4. The Opening Statement of Net Assets represents the first statement of the period in which the entity begins to adopt this Pronouncement. The model above presents in the first column the last balance sheet as produced by the norms applicable to entities in continuity. Subsequently, the necessary adjustments for the obtaining of the opening balances of the liquidation are presented, including the recognition of provisions according to the criteria of this Pronouncement and the identification of assets not previously recognized. Finally, the last column represents the initial balances of assets and liabilities already recognized based on the criteria required by this Pronouncement.

A.5. Together with the Opening Statement of Net Assets, the following model of the Statement of Changes in Net Assets may be disclosed:

Statement of Changes in Net Assets

	Opening DAL
Sale of Assets and Services
Sales Inventories	0
COGS	0
Sales Vehicles	0
Cost of Sale of Vehicles	0
Sales Real Estate	0
Cost of Sale of Real Estate	0
Sales Brand	0
Cost of Sale of Brand	0
Sale of Services
Adjustment Liquidation Value
Accounts Receivable 1	(12,000)
Inventories 2	18,000
Taxes to Compensate 3	(45,000)
Vehicles 2	12,000
Real Estate 2	120,000
Patent 4	10,000
Software 5	(35,000)
Adjustment Net Liabilities
Suppliers 6	0
Loans 6	0
Adjustment Provisions
Labor 7	(13,000)
Tax 7	(153,000)
Civil 7	(89,000)
Period Expenses
Period Salaries	0
Taxes	0
Liquidation Expenses	(120,000)
Financial Loss
Loan Interest	0
Financial Applications Interest	0
Variation in Net Assets	(307,000)

1 – Write-off of receivables that are not expected to be received by the entity.
2 – Adjustment to liquidation value of assets.
3 – Write-off of Taxes to Compensate that will not be realized by use or sale.
4 – Recognition and measurement of a patent capable of sale not previously recognized.
5 – Write-off of software usage right with no sale value.
6 – Adjustment as a result of negotiation with creditors.
7 – Recognition of possible and/or probable provisions not previously recognized.

A.6. At the time of the realization of the Opening Statement of Net Assets and the Opening Statement of Changes in Net Assets, there is no Statement of Cash Flows to be disclosed, as it is only an adjustment of accounting balances to reflect the change in recognition and measurement criteria for assets and liabilities that occurred by the adoption of this Pronouncement.

B) General Model for Entities in Liquidation – First Period of Liquidation

A.7. At the end of the first period of liquidation, the following statement models may be adopted:

Statement of Net Assets

	Opening DAL X1
ASSETS
Cash and Eq. Cash	12,500 14,150
Financial Applications	5,000 5,200
Accounts Receivable	40,000 110,000
Inventories	104,000 70,500
Taxes to Compensate	20,000 20,000
Judicial Deposits	89,000 85,000
Fixed Assets
Vehicles	180,000 124,000
Real Estate	770,000 325,000
Intangible
Patent	10,000 0
Software	0 0
Total Assets	1,230,500 753,850
LIABILITIES
Net Liabilities
Deferred Revenues	53,000 41,000
Liquidation Expenses	120,000 122,000
Salaries and Charges	269,000 161,000
Tax Obligations	348,000 288,000
Suppliers	289,000 184,000
Loans	689,000 531,000
Provisions
Labor Provisions	25,000 25,000
Tax Provisions	153,000 159,000
Civil Provisions	89,000 52,000
Total Liabilities	2,035,000 1,563,000
NET ASSETS	(804,500) (809,150)

Statement of Cash Flows

	Opening DAL X1
Realization of Assets	0 451,650
Sale of Services	2,500
Sale Inventory	0 32,000
Sale Vehicles	0 50,000
Sale Real Estate	0 350,000
Sale Brand	0 8,000
Rec Accounts Receivable	0 19,000
New Deposits	0 (10,000)
Financial Earnings	150
Financial Applications	0 0
Payment of Liabilities	0 (450,000)
Payment Deferred Revenues	0 (12,000)
Payment Salaries	0 (120,000)
Payment Labor Provision	0 (14,000)
Payment Taxes	0 (89,000)
Payment Suppliers	0 (85,000)
Payment Loan Repayments	0 (95,000)
Payment Civil Provision	0 (25,000)
Payment Liquidation Expenses	0 (10,000)
Cash Generated (Consumed)	0 1,650
Initial Cash Balance	12,500 12,500
Final Cash Balance	12,500 14,150

SECURITIES AND EXCHANGE COMMISSION OF BRAZIL (CVM) Seven of September Street, 111/2-5th and 23-34th Floors, Center, Rio de Janeiro/RJ – CEP: 20050-901 – Brazil - Tel.: (21) 3554-8686 Cincinato Braga Street, 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 Ed., S.404/4th Floor, Brasília/DF – CEP: 70712-900 – Brazil - Tel.: (61) 3327-2030/2031 www.cvm.gov.br

CVM RESOLUTION NO. 28, OF APRIL 16, 2021

Statement of Changes in Net Assets
DAL Opening X1

Sale of Assets and Services
Sales Inventories 0 35,000
COGS 0 (35,000)
Sales Vehicles 0 56,000
Cost of Sales of Vehicles 0 (56,000)
Sales Real Estate 0 430,000
Cost of Sales of Real Estate 0 (430,000)
Sales Brand 0 8,000
Cost of Sales of Brand 0 (8,000)
Sale of Services 4,000

Adjustment of Liquidation Value
Accounts Receivable 1 (12,000) (1,500)
Inventories 2 18,000 1,500
Taxes to Offset 3 (45,000) 0
Vehicles 2 12,000 0
Real Estate 2 120,000 (15,000)
Patent 4 10,000 (2,000)
Software 5 (35,000) 0

Adjustment of Net Liabilities
Suppliers 6 0 20,000
Loans 6 0 75,000

Adjustment of Provisions
Labor 7 (13,000) (14,000)
Tax 7 (153,000) (20,000)
Civil 7 (89,000) 12,000

Period Expenses
Period Salaries 0 (12,000)
Taxes 0 (29,000)
Liquidation Expenses (120,000) (12,000)

Financial Loss
Loan Interest 0 (12,000)
Financial Application Interest 0 350

Variation in Net Assets (307,000) (4,650)

CVM RESOLUTION NO. 28, OF APRIL 16, 2021

1 – Derecognition of receivables expected not to be received by the entity.
2 – Adjustment to liquidation value of assets.
3 – Derecognition of Taxes to Offset that will not be realized through use or sale.
4 – Recognition and measurement of a patent capable of sale not previously recognized.
5 – Derecognition of software use right with no sale value.
6 – Adjustment as a result of negotiation with creditors.
7 – Recognition of possible and/or probable provisions not previously recognized.

A.8. The models presented for the first period of liquidation must be repeated for subsequent periods.

C) Model for Entities in Bankruptcy

A.9. For entities that are in the process of bankruptcy and classified under Law No. 11,101/2005 (as amended or by any subsequent law that replaces it), their statements must present liabilities according to the order of liquidation provided by law. Thus, in order to comply with paragraph 37, assets and liabilities in the Statement of Net Assets must be segregated based on the legally required order, without failing to present their respective economic nature, and the model below may be used.

CVM RESOLUTION NO. 28, OF APRIL 16, 2021

Statement of Net Assets – Entity in Bankruptcy

ASSETS
Cash and Cash Equivalents
Financial Applications
Accounts Receivable
Inventories
Taxes to Offset
Judicial Deposits
Fixed Assets
Vehicles
Real Estate
Intangible
Patent
Software
Total Assets

LIABILITIES
Extra-judicial Liabilities - Art 84
Art. 84 - I – A - Essential expenses of the Estate (art. 150) Art. 84 - I – A - Balance of salaries due in the last 3 months (art. 151) Art. 84 - I – B – Financing granted in Judicial Recovery Art. 84 - I – C – Restitutions (article 86) Art. 84 - I – D – Remuneration to the Judicial Administrator and auxiliaries Art. 84 - I – D – Reimbursements to the Creditors Committee Art. 84 - I – D – Credits derived from labor legislation after bankruptcy Art. 84 - I – E – Obligations resulting from valid legal acts under art. 67 or after the declaration of bankruptcy. Art. 84 - II - Amounts Provided to the Bankrupt Estate by Creditors Art. 84 - III - Expenses with collection, administration, realization of assets, distribution of their proceeds and costs of the bankruptcy process. Art. 84 - IV - Judicial costs related to actions and executions in which the bankrupt estate was defeated. Art. 84 - V - Tax Credits - Generating Facts after the Declaration of Bankruptcy Federal Taxes State Taxes Municipal Taxes Art. 84 - V - Fines - Generating Facts after the Declaration of Bankruptcy Federal Tax Fines State Tax Fines Municipal Tax Fines Judicial Liabilities - Art. 83 Art. 83 - I - Labor Credits up to 150 minimum wages Art. 83 - II - Credits with Real Guarantee Art. 83 - III - Tax Credits Federal Taxes State Taxes Municipal Taxes Art. 83 - VI - Unsecured Credits

CVM RESOLUTION NO. 28, OF APRIL 16, 2021

Art. 83 - VII - Contractual Fines and Contractual Penalties Art. 83 - VIII - Subordinated Credits TOTAL LIABILITIES NET ASSETS

A.10. The model above is not intended to be exhaustive and present all possibilities of accounts and their aggregations. Other accounts and sub-accounts may be necessary for each distinct economic reality. Furthermore, in cases of changes in legal requirements, the necessary classifications must also be adjusted.

A.11. Alternatively, the Statement of Net Assets for companies in bankruptcy may be presented in a more synthetic manner, maintaining, at a minimum, the order of liquidation of liabilities.

Description of movement NE X1 X2 X3 Total

Initial balance of judicial accounts (in R$) 1,397,400 1,709,950
Inflows (in R$) 1,523,400 416,050 904,330 2,843,780
Sales of assets 1 1,510,000 400,000 886,000 2,796,000 Values from sales of real estate (auctions) 1.1 1,500,000 400,000 880,000 2,780,000 Sales of movable goods 1.2 10,000 - 6,000 16,000 Inflows from customer receipts 2 5,000 6,000 8,000 19,000 Financial earnings 3 1,100 1,550 2,030 4,680 Earnings from judicial accounts 3.1 1,000 1,500 2,000 4,500 Other financial earnings 3.2 100 50 30 180 Other inflows 4 7,000 8,000 8,000 23,000 Receipts of values from judicial executions
4.1 3,000 3,000 2,000 8,000
Receipts from debtors by agreements or executions 4.2 4,000 5,000 6,000 15,000 Unidentified inflows 5 300 500 300 1,100 Diverse inflows to identify 5.1 300 500 300 1,100
Outflows (in R$) 126,000 103,500 239,000 468,500
Extra-judicial Credits 6 76,000 23,500 105,000 204,500 Art. 84 - I – A - Essential expenses of the Estate (art.

6.1 5,000 6,000 6,000 17,000
Art. 84 - I – A - Balance of salaries due in the last 3 months (art. 151) 6.2 30,000 1,000 - 31,000 Art. 84 - I – B – Financing granted in Judicial Recovery 6.3 30,000 1,000 1,000 32,000 Art. 84 - I – C – Restitutions (article 86) 6.4 1,000 3,000 Art. 84 - I – D – Remuneration to the Judicial Administrator and auxiliaries 6.5 1,000 3,000 Art. 84 - I – D – Reimbursements to the Creditors Committee 6.6 1,000 3,000 Art. 84 - I – D – Credits derived from labor legislation after bankruptcy 6.7 1,000 3,000

CVM RESOLUTION NO. 28, OF APRIL 16, 2021

Art. 84 - I – E – Obligations resulting from valid legal acts under art. 67 or after the declaration of bankruptcy.
6.8 1,000 3,000
Art. 84 - II - Amounts Provided to the Bankrupt Estate by Creditors 6.9 1,000 3,000 Art. 84 - III - Expenses with collection, administration, realization of assets, distribution of their proceeds and costs of the bankruptcy process.
6.10 1,000 3,000
Art. 84 - IV - Judicial costs related to actions and executions in which the bankrupt estate was defeated. 6.11 1,000 3,000 Art. 84 - V - Tax Credits - Generating Facts after the Declaration of Bankruptcy Federal Taxes 6.12 1,000 2,500 30,000 33,500 State Taxes 6.13 1,000 2,500 30,000 33,500 Municipal Taxes 6.14 1,000 2,500 30,000 33,500 Judicial Credits 7 50,000 80,000 134,000 264,000 Art. 83 - I - Labor 7.1 50,000 150,000 Art. 83 - II - Real Guarantee 7.2 - - - - Art. 83 - III - Tax - Federal Union 7.3 - 30,000 - 30,000 Art. 83 - III - Tax - State 7.4 15,000 15,000 Art. 83 - III - Tax - Municipal 7.5 10,000 10,000 Art. 83 - VI - Unsecured 7.6 4,000 4,000 Art. 83 - VII - Fines and penalties 7.7 5,000 5,000 Art. 83 - VIII - Subordinated 7.8 50,000 50,000 Art. 83 - IX - interest accrued after the declaration of bankruptcy 7.9

Movements by account consolidations (in
R$) 8
Consolidations verified in statements 8.1
Inflows from consolidations 10,000 50,000 1,000,000 1,060,000 Outflows from consolidations -10,000 -50,000 -1,000,000 -1,060,000
Net cash variation (2 - 3 + 4) 9 1,397,400 312,550 665,330 2,375,280
Final balance (1 + 5) 10 1,397,400 1,709,950 2,375,280 2,375,280

A.12. The fact that a specific model for the Statement of Changes in Net Assets and the Statement of Changes in Net Assets – Complementary for entities in bankruptcy is not presented does not imply exemption from their presentation by these entities. The same general models presented for entities not in bankruptcy may be adopted for entities in bankruptcy. The same liability segregations used in the Statement of Net Assets presented earlier may be adopted in the preparation of the other statements.

A.13. The Statement of Cash Flows for entities in bankruptcy may follow the general model for entities not in bankruptcy or the following model:

CVM RESOLUTION NO. 28, OF APRIL 16, 2021

Description of movement
NE X1 X2 X3 Total

Initial balance of judicial accounts (in R$) 1,397,400 1,709,950
Inflows (in R$) 1,523,400 416,050 904,330 2,843,780
Sales of assets 1 1,510,000 400,000 886,000 2,796,000 Values from sales of real estate (auctions) 1.1 1,500,000 400,000 880,000 2,780,000 Sales of movable goods 1.2 10,000 - 6,000 16,000 Inflows from customer receipts 2 5,000 6,000 8,000 19,000 Financial earnings 3 1,100 1,550 2,030 4,680 Earnings from judicial accounts 3.1 1,000 1,500 2,000 4,500 Other financial earnings 3.2 100 50 30 180 Other inflows 4 7,000 8,000 8,000 23,000 Receipts of values from judicial executions
4.1 3,000 3,000 2,000 8,000
Receipts from debtors by agreements or executions 4.2 4,000 5,000 6,000 15,000 Unidentified inflows 5 300 500 300 1,100 Diverse inflows to identify 5.1 300 500 300 1,100
Outflows (in R$) 126,000 103,500 239,000 468,500
Extra-judicial Credits 6 76,000 23,500 105,000 204,500 Art. 84 - I – A - Essential expenses of the Estate (art.

6.1 5,000 6,000 6,000 17,000
Art. 84 - I – A - Balance of salaries due in the last 3 months (art. 151) 6.2 30,000 1,000 - 31,000 Art. 84 - I – B – Financing granted in Judicial Recovery 6.3 30,000 1,000 1,000 32,000 Art. 84 - I – C – Restitutions (article 86) 6.4 1,000 3,000 Art. 84 - I – D – Remuneration to the Judicial Administrator and auxiliaries 6.5 1,000 3,000 Art. 84 - I – D – Reimbursements to the Creditors Committee 6.6 1,000 3,000 Art. 84 - I – D – Credits derived from labor legislation after bankruptcy 6.7 1,000 3,000 Art. 84 - I – E – Obligations resulting from valid legal acts under art. 67 or after the declaration of bankruptcy.
6.8 1,000 3,000
Art. 84 - II - Amounts Provided to the Bankrupt Estate by Creditors 6.9 1,000 3,000 Art. 84 - III - Expenses with collection, administration, realization of assets, distribution of their proceeds and costs of the bankruptcy process.
6.10 1,000 3,000
Art. 84 - IV - Judicial costs related to actions and executions in which the bankrupt estate was defeated. 6.11 1,000 3,000 Art. 84 - V - Tax Credits - Generating Facts after the Declaration of Bankruptcy Federal Taxes 6.12 1,000 2,500 30,000 33,500 State Taxes 6.13 1,000 2,500 30,000 33,500 Municipal Taxes 6.14 1,000 2,500 30,000 33,500 Judicial Credits 7 50,000 80,000 134,000 264,000 Art. 83 - I - Labor 7.1 50,000 150,000

CVM RESOLUTION NO. 28, OF APRIL 16, 2021

Art. 83 - II - Real Guarantee 7.2 - - - -
Art. 83 - III - Tax - Federal Union 7.3 - 30,000 - 30,000 Art. 83 - III - Tax - State 7.4 15,000 15,000 Art. 83 - III - Tax - Municipal 7.5 10,000 10,000 Art. 83 - VI - Unsecured 7.6 4,000 4,000 Art. 83 - VII - Fines and penalties 7.7 5,000 5,000 Art. 83 - VIII - Subordinated 7.8 50,000 50,000 Art. 83 - IX - interest accrued after the declaration of bankruptcy 7.9

Movements by account consolidations (in
R$) 8
Consolidations verified in statements 8.1
Inflows from consolidations 10,000 50,000 1,000,000 1,060,000 Outflows from consolidations -10,000 -50,000 -1,000,000 -1,060,000
Net cash variation (2 - 3 + 4) 9 1,397,400 312,550 665,330 2,375,280
Final balance (1 + 5) 10 1,397,400 1,709,950 2,375,280 2,375,280

A.14. The model of Statement of Cash Flows above is also not intended to be exhaustive and present all possibilities of accounts and their aggregations. Adjustments may be necessary for each individual case.

CVM RESOLUTION NO. 28, OF APRIL 16, 2021

STATEMENT OF LIQUIDATION CURRENCY

A.15. The Statement of Liquidation Currency is not mandatory in all circumstances where there is liquidation. However, in some cases this statement is legally required or its disclosure is desired. Thus, the following model for the disclosure of the liquidation currency is suggested:

Description of liquidation variables 31.12.X1
Value in
R$
Liquidation
Currency
Asset balances in R$ after liquidation of liabilities Total assets in liquidation 9,200 Total liabilities in liquidation 13,100 (A) -3,900 Order of liquidation Extra-judicial Obligations 2,800 Art. 84 - I – A - Essential expenses of the Estate (art. 150) 100 100% 9,100 Art. 84 - I – A - Balance of salaries due in the last 3 months (art.
151) 100 100% 9,000
Art. 84 - I – B – Financing granted in Judicial Recovery 100 100% 8,900 Art. 84 - I – C – Restitutions (article 86) 200 100% 8,700 Art. 84 - I – D – Remuneration to the Judicial Administrator and auxiliaries 300 100% 8,400 Art. 84 - I – D – Reimbursements to the Creditors Committee 100 100% 8,300 Art. 84 - I – D – Credits derived from labor legislation after the bankruptcy 100 100% 8,200 Art. 84 - I – E – Obligations resulting from valid legal acts under art. 67 or after the declaration of bankruptcy. 100 100% 8,100 Art. 84 - II - Amounts Provided to the Bankrupt Estate by Creditors 100 100% 8,000 Art. 84 - III - Expenses with collection, administration, realization of assets, distribution of their proceeds and costs of the bankruptcy process. 100 100% 7,900 Art. 84 - IV - Judicial costs related to actions and executions in which the bankrupt estate was defeated. 500 100% 7,400 Federal Taxes 200 100% 7,200 State Taxes 300 100% 6,900 Municipal Taxes 500 100% 6,400 Judicial Obligations 14,000 Art. 83 - I - Labor 1,000 100% 5,400 Art. 83 - II - Real Guarantee 1,000 100% 4,400 Art. 83 - III - Tax - Federal Union 1,000 100% 3,400 Art. 83 - III - Tax - State 1,000 100% 2,400 Art. 83 - III - Tax - Municipal 1,000 100% 1,400 Art. 83 - VI - Unsecured 6,000 23% -4,600 Art. 83 - VII - Fines and penalties 1,000 0% -5,600 Art. 83 - VIII - Subordinated 1,000 0% -6,600 Art. 83 - IX - interest accrued after the declaration of bankruptcy 1,000 0% -7,600 (A) Due to being information with potential for misinterpretation, the general liquidation currency should not be disclosed, but rather those relative to each class of creditors, as

CVM RESOLUTION NO. 28, OF APRIL 16, 2021

it is not in cases of regulatory or judicial requirement. Ideally, only the individual liquidation currencies of each category should be disclosed.

SUGGESTED ADDITIONAL DISCLOSURE

A.16. Complementarily and voluntarily, the entity in liquidation may disclose the Statement of Changes in Net Assets – Complementary, in which the effects of changes in balances occurring due to cash flows and accruals are evidenced, line by line. The complementary demonstration below is a combination of the three statements presented earlier, but with the information contained in the Statement of Cash Flows and the Statement of Changes in Net Assets properly allocated to each line of the Statement of Net Assets.

CVM RESOLUTION NO. 28, OF APRIL 16, 2021

Statement of Changes in Net Assets - Complementary Variations in Assets and Liabilities

NET ASSETS DAL Opening
Cash Flows
Non-Cash
Adjustments
X1
Cash and Cash Equivalents 12,500 1,650 0 14,150 Financial Applications 5,000 0 200 5,200 Accounts Receivable 40,000 (19,000) 89,000 110,000 Inventories 104,000 (32,000) (1,500) 70,500 Taxes to Offset 20,000 20,000 Judicial Deposits 89,000 10,000 (14,000) 85,000 Fixed Assets 0 0 Vehicles 180,000 (50,000) (6,000) 124,000 Real Estate 770,000 (350,000) (95,000) 325,000 Intangible 0 0 Brand 10,000 (8,000) (2,000) 0 Software 0 Assets 1,230,500 (447,350) (29,300) 753,850

LIABILITIES
Net Liabilities
Deferred Revenue 53,000 0 (12,000) 41,000
Liquidation Expenses 120,000 (10,000) 12,000 122,000 Salaries and Charges 269,000 (120,000) 12,000 161,000 Tax Obligations 348,000 (89,000) 29,000 288,000 Suppliers 289,000 (85,000) (20,000) 184,000 Loans 689,000 (95,000) (63,000) 531,000 Provisions Labor Provisions 25,000 (14,000) 14,000 25,000 Tax Provisions 153,000 0 6,000 159,000 Civil Provisions 89,000 (25,000) (12,000) 52,000 Liabilities 2,035,000 (438,000) (34,000) 1,563,000 Net Assets (804,500) (9,350) 4,700 (809,150)

CVM Resolution No. 28 of April 16, 2021

Lineage: In force

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