Notice No. 05/2019 of August 30 on the Financial System: Accounting Standardization and Harmonization for the Angolan Banking Sector

PUBLICADO NO DIÁRIO DA REPÚBLICA, I SÉRIE, N. º 113, DE 30 DE AGOSTO DE 2019 NOTICE NO. 05/2019 SUBJECT: FINANCIAL SYSTEM - Accounting Standardization and Harmonization Process for the Angolan Banking Sector Given the need to standardize and harmonize accounting in the Angolan Banking Sector, in accordance with International Accounting Standards and Financial Reporting Standards (IAS/IFRS) issued by the International Accounting Standards Board (IASB), with a view to strengthening the credibility of the national financial system; Considering the entry into force of IFRS 9 – Financial Instruments, replacing IAS 39, and the need to adapt related regulations, aiming to unify accounting records, systematize recording procedures and criteria, establish rules for information disclosure, as well as rationalize and standardize account usage, thereby enabling oversight of the financial system, particularly regarding the analysis, performance evaluation, and control of activities carried out by financial institutions supervised by the Banco Nacional de Angola. In these terms, and under the combined provisions of paragraph f) of Article 21 and Article 51, both of Law No. 16/10 of July 15 – Law of the Banco Nacional de Angola, and Article 93 of Law No. 12/15 of June 17 – Framework Law on Financial Institutions, I HEREBY DETERMINE:

Article 1. (Subject Matter) The present Notice establishes the general principles to be observed, within the framework of the Accounting Standardization and Harmonization Process by the Angolan Banking Sector.

Article 2. (Scope) The present Notice applies to Banking Financial Institutions, hereinafter abbreviated as Institutions, under the terms and conditions provided in the Framework Law on Financial Institutions.

Article 3. (General Principles)

1. Institutions must adopt IAS/IFRS as issued by the International Accounting Standards Board (IASB).
2. The adoption of IAS/IFRS must be made by reference, and therefore it is not necessary to reproduce IAS/IFRS in the regulations issued by the Banco Nacional de Angola, nor to carry out any endorsement process of IAS/IFRS by the Banco Nacional de Angola.
3. Future new standards, interpretations, and amendments to IAS/IFRS issued by the IASB must be adopted by Institutions, in accordance with what is defined by them in the respective standard or interpretation, including their effective dates.
4. Institutions must not adopt IAS/IFRS and/or interpretations issued by the IASB in advance before their respective effective dates.

Article 4. (Chart of Accounts) The list of accounts, account functions, auxiliary tables, accounting schemes, and accounting documents that make up the Chart of Accounts of Financial Institutions are defined by the Banco Nacional de Angola through specific regulations.

Article 5. (Preparation)

1. Institutions must prepare their balance sheets on an individual and consolidated basis, where applicable, in accordance with the list of accounts established in the Chart of Accounts of Banking Financial Institutions.
2. Without prejudice to the foregoing, Institutions must prepare financial statements, supplemented by explanatory notes necessary for a complete clarification of their financial position, performance, and cash flows, namely: a) Balance sheet on an individual basis; b) Balance sheet on a consolidated basis, where applicable; c) Income statement on an individual basis; d) Income statement on a consolidated basis, where applicable; e) Statement of comprehensive income on an individual basis; f) Statement of comprehensive income on a consolidated basis, where applicable; g) Statement of changes in equity on an individual basis; h) Statement of changes in equity on a consolidated basis, where applicable; i) Statement of cash flows on an individual basis; and, j) Statement of cash flows on a consolidated basis, where applicable.

Article 6. (Publication)

1. Institutions must publish their balance sheets quarterly on an individual and consolidated basis, where applicable.
2. Institutions must publish their financial statements semi-annually, as indicated in paragraph 2 of Article 5 of this Notice, with the requirement for Institutions whose total assets on an individual basis at the end of the preceding financial year exceed Kz 400,000,000,000.00 (four hundred billion Kwanzas), and they must apply the requirements established in International Accounting Standard 34 – Interim Financial Reporting, hereinafter abbreviated as IAS 34.
3. Institutions must publish their financial statements annually, as provided for in paragraph 2 of Article 5 of this Notice.
4. For the preparation and disclosure of semi-annual financial statements in accordance with paragraph 2 of this article, Institutions may opt between publishing (i) a complete set of financial statements, as established in International Accounting Standard 1 – Presentation of Financial Statements, hereinafter abbreviated as IAS 1, or (ii) a set of condensed financial statements, as established in IAS 34.
5. Semi-annual and annual financial statements must be published accompanied by the respective Management Report on business activities and key administrative events of the period, explanatory notes to the financial statements, external audit opinion, and Supervisory Board opinion, prepared in the manner prescribed by specific regulations.
6. Institutions must submit their financial statements to the Banking Supervision Department of the Banco Nacional de Angola immediately after publication.

Article 7. (Deadlines)

1. Balance sheets on an individual and consolidated basis, where applicable, must be published within 45 (forty-five) days after the end of the respective quarter.
2. The publication of financial statements must comply with the following deadlines: a) Semi-annually, by September 30 of the relevant year; and, b) Annually, by April 30 of the following year.

Article 8. (Method of Publication)

1. Quarterly balance sheets on an individual and consolidated basis, where applicable, must be published on their websites, or alternatively in a class entity's information and disclosure bulletin, without access restrictions and free of charge, or in a widely circulated newspaper.
2. The publication of financial statements must be carried out as follows: a) Semi-annual financial statements must be published in a widely circulated newspaper or on their websites, without access restrictions and free of charge; and, b) Annual financial statements must be published in the Official Gazette and in a widely circulated newspaper or on their websites, without access restrictions and free of charge.

Article 9. (Monetary Unit and Comparability)

1. Financial statements must be published with values expressed in thousands of national currency units.
2. Unless IAS/IFRS otherwise permit or require, Institutions must disclose comparative information for the prior period for all items reported in the semi-annual and annual financial statements of the current period.
3. Institutions must include comparative data for narrative and descriptive information, if relevant to the understanding of the financial statements of the current period.

Article 10. (Subsequent Significant Events After Approval) Whenever, between the approval date of semi-annual or annual financial statements and their publication date, a significant event occurs that modifies or may modify the financial position and/or substantially influences future performance and/or cash flows of the Institution, such event must be disclosed with appropriate clarifications in the explanatory notes to the financial statements.

Article 11. (Restatement of Financial Statements)

1. The Banco Nacional de Angola may determine, without prejudice to other measures provided by law, the restatement of financial statements with necessary corrections to ensure adequate representation of the Institution's economic and financial reality.
2. In case of disclosure of incorrect or incomplete data, a new publication must be provided through the same channels and highlights, in accordance with the requirements established in International Accounting Standard 8 – Accounting Policies, Changes in Accounting Estimates and Errors.

Article 12. (Aggregation) When completing the publication forms, the value of each generic aggregation (exemplarily, various debtors and creditors, other assets and liabilities, and other values and obligations) that exceeds one-tenth of the value of its respective group or class of accounts must be presented in detail in the explanatory notes to the financial statements, with necessary clarifications for understanding the nature of that accounting aggregation.

Article 13. (Notes to Financial Statements) Semi-annual and annual financial statements must be published accompanied by notes to the financial statements, which must consider the disclosure requirements provided in IAS/IFRS and/or regulations issued by the Banco Nacional de Angola.

Article 14. (Instructions) Without prejudice to any interpretations of IAS/IFRS and without dispensing with consulting them, the Banco Nacional de Angola may issue specific regulations containing instructions it considers necessary for compliance with this Notice.

Article 15. (Transitional Provision) Institutions must comply with the provisions of this Notice within 180 (one hundred and eighty) days after its publication.

Article 16. (Final Provisions)

1. This Notice does not dispense with the need to consult IAS/IFRS.
2. Whenever discrepancies arise between this Notice and IAS/IFRS, the standards issued by the International Accounting Standards Board shall prevail.

Article 17. (Penalties) Non-compliance with the provisions established in this Notice constitutes an offense punishable under Law No. 12/15 of June 17, Framework Law on Financial Institutions.

Article 18. (Doubts and Omissions) Doubts and omissions resulting from the interpretation and application of this Notice are resolved by the Banco Nacional de Angola.

Article 19. (Repeal) Notice No. 15/2007 of September 28, Article 9 of Notice No. 08/2012 of March 30, Notice No. 06/2016 of June 22, Instructional No. 12/2009 of December 21, Instructional No. 02/2010 of April 1, Directive No. 04/DSI/2011, and Directive No. 01/DSI/2013 are hereby repealed, along with all legislation contrary to the provisions of this Notice.

Article 20. (Entry into Force) The present Notice enters into force on the date of its publication.

PUBLISH. Luanda, August 23, 2019. THE GOVERNOR JOSÉ DE LIMA MASSANO