Instruction No. 14/2019 of September 6: Chart of Accounts for Banking Financial Institutions

INSTRUCTION NO. 14/2019 of September 6
ASSUNTO: FINANCIAL SYSTEM
− Chart of Accounts for Banking Financial Institutions Given the need to standardize and harmonize the Chart of Accounts for Financial Institutions regarding accounting records, procedures, and recording criteria, rules for information disclosure to strengthen the consolidation of accounting information based on International Accounting Standards/International Financial Reporting Standards (IAS/IFRS), as well as the adoption of Value Added Tax (VAT) under Law No. 7/19 of April 24, in the activity of banking financial institutions supervised by the Bank of Angola; Considering the ongoing tax reform process, approved by the Executive Branch via Presidential Decree No. 258/17 of October 27 – which establishes actions to improve the country's current economic and social situation, including the need to replace the current Consumption Tax with Value Added Tax (VAT), ensuring through this measure a certain predictability and stability of fiscal revenue and transparency in its application; Given the need to harmonize and clarify the accounting recording methodology for active and passive operations for the calculation, settlement, and payment of the tax, among other accounting obligations for operations subject to Value Added Tax (VAT), under Law No. 7/19 of April 24, which approves the Value Added Tax Code; Considering that the aforementioned process will enable better analysis, performance evaluation, and control of activities carried out by financial institutions, comparability and transparency, high-quality financial reporting, as well as the continued development of a banking sector in an efficient and effective manner; Under the combined provisions of Article 21 and Article 51, both of Law No. 16/10 of July 15 - Bank of Angola Law, Article 93 of Law No. 12/15 of June 17 - Framework Law for Financial Institutions, and Articles 4 and 5 of Notice No. 05/2019 of August 30, regarding the accounting standardization process of the banking system. I HEREBY DETERMINE:

1. Objective and Scope
   1.1. This Instruction establishes the Chart of Accounts for Banking Financial Institutions, hereinafter abbreviated as PCIFB, which applies to Banking Financial Institutions under the supervision of the Bank of Angola and establishes the procedures to be observed in the accounting recording of active and passive operations subject to Value Added Tax (VAT).
2. Creation of Sub-accounts
   2.1 For accounting recording purposes of active and passive operations related to Value Added Tax, the following sub-accounts are created:
   2.1.1 Asset: 1.80.20.40 - Value Added Tax;
   2.1.2 Liability: 2.80.20.40 - Value Added Tax; and
   2.1.3 Income Statement: 5.10.10.40.10.10 - Taxes and Fees not levied on Income.
   2.2 Without prejudice to the provisions of paragraph 2 of this Instruction, Banking Financial Institutions may create other control sub-accounts in their internal trial balances, segregating them according to the nature of active and/or passive operations, for VAT accounting recording purposes.

CONTINUATION OF INSTRUCTION NO. 14/2019 Page 2 of 4
2.3 This PCIFB is mandatory, and no alterations are permitted, particularly regarding the nomenclature, code, and content of accounts, without express authorization from the Bank of Angola.
3. Chart of Accounts
The Chart of Accounts for Banking Financial Institutions, as attached and forming an integral part of this Instruction, is structured as follows:
a) Index – contains the PCIFB structure, namely: (i) basic rules; (ii) list of accounts; (iii) function of accounts; (iv) accounting schemes; and (v) accounting documents. b) Basic Rules – specifies general rules, objectives, records, accounting principles, valuation and accounting allocation criteria, standardized list of accounts, information reporting, and general provisions. c) List of Accounts – specifies the accounts that institutions must consider for accounting recording of operations carried out by them (assets, liabilities, non-controlling interests, equity, income statement, off-balance sheet accounts, auxiliary accounts or tables, including sub-accounts and their respective specification codes. d) Function of Accounts and Accounting Schemes – guide PCIFB users in selecting the most appropriate account for the accounting act and event, as well as facilitate the recording process and automation of accounting procedures in electronic systems. e) Accounting Documents – models for the standardized and adequate publication of accounting information by financial institutions, enabling comparability among various institutions across different periods, as well as comprehension and analysis of information by external users of financial statements. f) Creation of Sub-accounts and Specification Codes – for accounting recording purposes of active and passive operations of Value Added Tax, containing the following elements: (i) assets, (ii) liabilities, and (iii) income statement.

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4. Doubts and Omissions
Doubts and omissions resulting from the interpretation and application of this Instruction shall be clarified by the Bank of Angola.
5. Repeal
Instruction No. 12/09 of December 21 and all regulations contrary to the provisions of this Instruction are hereby repealed.
6. Entry into Force
This Instruction enters into force on the date of its publication.
PUBLISH.
Luanda, September 6, 2019.
THE GOVERNOR
JOSÉ DE LIMA MASSANO

PLANO DE CONTAS DAS INSTITUIÇÕES FINANCEIRAS BANCÁRIAS

Presentation 1
Basic Rules 2
General Rules 2-0
Objective 2-0-10
Recording 2-0-20
Accounting principles 2-0-30
Valuation and accounting allocation criteria 2-0-40 Standardized list of accounts 2-0-50 Information reporting 2-0-60 General provisions 2-0-70 List of Accounts 3 Assets 3-1 Cash and balances 3-1-10 Investments in central banks and other credit institutions 3-1-20 Securities and marketable securities 3-1-30 Hedging derivatives with positive fair value 3-1-40 Credits in the payment system 3-1-50 Foreign exchange operations 3-1-60 Credit to customers 3-1-70 Commercial and industrial clients 3-1-75 Other assets 3-1-80 Commercial and industrial inventories and advances to suppliers 3-1-85 Other fixed assets 3-1-90 Liabilities 3-2 Customer resources and other loans 3-2-10 Resources from central banks and other credit institutions 3-2-20 Liabilities represented by securities 3-2-30 Financial liabilities at fair value through profit or loss 3-2-35 Hedging derivatives with negative fair value 3-2-40 Obligations in the payment system 3-2-50 Non-current liabilities held for sale 3-2-55 Foreign exchange operations 3-2-60 Financial liabilities associated with transferred assets 3-2-65 Subordinated liabilities 3-2-70 Customer advances 3-2-75 Other liabilities 3-2-80 Commercial and industrial suppliers 3-2-85 Provisions 3-2-90 Technical provisions 3-2-95 Non-controlling interests 3-3 Share capital 3-3-10 INDEX CHART OF ACCOUNTS FOR BANKING FINANCIAL INSTITUTIONS - PCIFB

Reserves 3-3-30
Other equity instruments 3-3-40
Retained earnings 3-3-50
(-) Advance dividends 3-3-60
Result of changes in accounting policies 3-3-70 (-) Treasury shares or own quotas 3-3-80 Equity 3-4 Share capital 3-4-10 Reserves 3-4-30 Other equity instruments 3-4-35 Retained earnings 3-4-50 (-) Advance dividends 3-4-60 Result of changes in accounting policies 3-4-70 (-) Treasury shares or own quotas 3-4-80 Income Statement 3-5 Income before taxes from continuing operations and non-controlling interests 3-5-10 Income from discontinued and/or discontinued operations 3-5-20 Charges on current income 3-5-30 Non-controlling interests 3-5-80 Income determination 3-5-90 Off-balance sheet accounts 3-9 Control accounts 3-9-10 Other off-balance sheet accounts 3-9-20 Debtors and creditors for off-balance sheet liabilities 3-9-99 Auxiliary accounts 3-10 Value specification codes 3-10-01 Maturity and delay period codes 3-10-02 Risk level codes 3-10-03 Currency codes 3-10-04 Indexer codes 3-10-05 Institutional sector codes 3-10-06 Foreign exchange residence codes 3-10-07 Financial instrument and operation type codes 3-10-08 Economic Activities Codes (CAE) 3-10-09 Guarantee type codes 3-10-10 Categories of derivative financial instruments codes 3-10-11 Negotiability conditions codes 3-10-12 Resource earmarking codes 3-10-13 Operation recording location codes 3-10-14 Goods and rights used as collateral codes 3-10-15 Country codes 3-10-16 Province and municipality codes 3-10-17 Interest cash flow periodicity codes 3-10-18 Principal cash flow periodicity codes 3-10-19 Credit risk classification stages codes 3-10-20 Function of Accounts 4 Assets 4-1 Cash and balances 4-1-10 Investments in central banks and other credit institutions 4-1-20 Securities and marketable securities 4-1-30 Hedging derivatives with positive fair value 4-1-40 Credits in the payment system 4-1-50 Foreign exchange operations 4-1-60 Credit to customers 4-1-70 Commercial and industrial clients 4-1-75 Other assets 4-1-80 Commercial and industrial inventories and advances to suppliers 4-1-85 Other fixed assets 4-1-90 Liabilities 4-2 Customer resources and other loans 4-2-10 Resources from central banks and other credit institutions 4-2-20 Liabilities represented by securities 4-2-30 Financial liabilities at fair value through profit or loss 4-2-35 Hedging derivatives with negative fair value 4-2-40 Obligations in the payment system 4-2-50 Non-current liabilities held for sale 4-2-55 Foreign exchange operations 4-2-60 Financial liabilities associated with transferred assets 4-2-65 Subordinated liabilities 4-2-70 Customer advances 4-2-75 Other liabilities 4-2-80 Commercial and industrial suppliers 4-2-85 Provisions 4-2-90 Technical provisions 4-2-95 Non-controlling interests 4-3 Share capital 4-3-10 Reserves 4-3-30 Other equity instruments 4-3-40 Retained earnings 4-3-50 (-) Advance dividends 4-3-60 Result of changes in accounting policies 4-3-70 (-) Treasury shares or own quotas 4-3-80 Equity 4-4 Share capital 4-4-10 Reserves 4-4-30 Other equity instruments 4-4-35 Retained earnings 4-4-50 (-)
Advance dividends 4-4-60 Result of changes in accounting policies 4-4-70 (-) Treasury shares or own quotas 4-4-80 Income Statement 4-5 Income before taxes from continuing operations and non-controlling interests 4-5-10 Income from discontinued and/or discontinued operations 4-5-20 Charges on current income 4-5-30 Non-controlling interests 4-5-80 Income determination 4-5-90 Off-balance sheet accounts 4-9 Control accounts 4-9-10 Other off-balance sheet accounts 4-9-20 Debtors and creditors for off-balance sheet liabilities 4-9-99 Auxiliary accounts 4-10 Value specification codes 4-10-01 Maturity and delay period codes 4-10-02 Risk level codes 4-10-03 Currency codes 4-10-04 Indexer codes 4-10-05 Institutional sector codes 4-10-06 Foreign exchange residence codes 4-10-07 Financial instrument and operation type codes 4-10-08 Economic Activities Codes (CAE) 4-10-09 Guarantee type codes 4-10-10 Categories of derivative financial instruments codes 4-10-11 Negotiability conditions codes 4-10-12 Resource earmarking codes 4-10-13 Operation recording location codes 4-10-14 Goods and rights used as collateral codes 4-10-15 Country codes 4-10-16 Province and municipality codes 4-10-17 Interest cash flow periodicity codes 4-10-18 Principal cash flow periodicity codes 4-10-19 Credit risk classification stages codes 4-10-20 Accounting Schemes 5 Assets 5-1 Investments in central banks and other credit institutions 5-1-20 Securities and marketable securities 5-1-30 Hedging derivatives with positive fair value 5-1-40 Foreign exchange operations 5-1-60 Credit to customers 5-1-70 Other assets 5-1-80 Other fixed assets 5-1-90 Liabilities 5-2 Customer resources and other loans 5-2-10 Resources from central banks and other credit institutions 5-2-20 Liabilities represented by securities 5-2-30 Obligations in the payment system 5-2-50 Subordinated liabilities 5-2-70 Other liabilities 5-2-80 Provisions 5-2-90 Equity 5-4 Share capital 5-4-10 Reserves 5-4-30 Income Statement 5-5 Income determination 5-5-90 Accounting Documents 6 Models for publication 6-10 Balance Sheet 6-10-10 Income Statement 6-10-20 Statement of Comprehensive Income 6-10-30 Statement of Cash Flows 6-10-40 Statement of Changes in Equity 6-10-50 Trial Balance 6-10-60

1. The transition from the Chart of Accounts for Financial Institutions (CONTIF) to the Chart of Accounts for Banking Financial Institutions (PCIFB) stems from the Bank of Angola's (BNA) intention to improve the PCIFB with the objective of revitalizing the Angolan Financial System (AFS) through (i) compliance with recommendations from international financial institutions, namely the International Monetary Fund and the World Bank, (ii) enhancing the comparability and transparency of the financial performance of Banking Financial Institutions ("Institutions") supervised by the BNA on a global scale, and (iii) continuously improving information provided to users of financial statements, thereby keeping pace with the growing sophistication of operations.

2. To achieve these objectives, the BNA determined the full adoption of the requirements and principles established in International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) issued by the International Accounting Standards Board (IASB) by Institutions, through the publication of the PCIFB, which will enable the standardization of accounting records, systematization of procedures and recording criteria, as well as the establishment of rules for information disclosure. Furthermore, the PCIFB aims to rationalize and standardize account usage, enabling monitoring of the AFS, particularly regarding the analysis, performance evaluation, and control of activities carried out by Institutions under BNA supervision.

3. The full adoption of requirements and principles established in IAS/IFRS resulted in the identification of a set of more relevant matters for banking activity and/or where greater divergences were found between CONTIF and IAS/IFRS, namely (i) the first-time adoption of IFRS, (ii) the impairment loss model for the credit portfolio, based on the expected loss concept, recently introduced by International Financial Reporting Standard 9 – Financial Instruments, which replaced International Accounting Standard 39 – Financial Instruments: Recognition and Measurement, (iii) disclosures related to financial instruments required by International Financial Reporting Standard 7 – Financial Instruments: Disclosures, (iv) recognition and measurement of securities and marketable securities, (v) the effective interest rate method for recognizing income and expenses, (vi) employee benefits, and (vii) leases.
   PRESENTATION
   CHART OF ACCOUNTS FOR BANKING FINANCIAL INSTITUTIONS - PCIFB

4. Additionally, the conceptual structure of the PCIFB aims to simplify and reduce the amount of information to be provided by Institutions in a segmented manner. The PCIFB is flexible and allows theoretically unlimited alterations and expansions, which will facilitate the inclusion, alteration, or exclusion of any type of information, constituting an important advantage considering that IAS/IFRS are constantly updated. This immunity to obsolescence and the simplification of information to be submitted by Institutions were relevant aspects for the BNA's decision-making in the transition to the PCIFB.

5. In terms of structure, the PCIFB is divided into six (6) parts, namely:
   a) Index and presentation; b) Basic rules; c) List of accounts; d) Functions of accounts; e) Accounting schemes; and f) Accounting documents.

6. The basic rules contain the generic principles and criteria under which the PCIFB is embodied and founded.

7. The list of accounts specifies the accounts that Institutions must consider for accounting recording of operations carried out by them. The accounts defined by the BNA in the list of accounts were designed based on the requirements and accounting principles established in IAS/IFRS. The list of accounts is subdivided into basic accounts and auxiliary accounts.

8. The functions of accounts and accounting schemes serve a didactic purpose to guide PCIFB users in selecting the most appropriate account for the accounting act and event, as well as facilitate the recording process and automation of accounting procedures in electronic systems.

9. Financial statement models for publication purposes guarantee an adequate standard of information disclosure by Institutions, enabling comparability among various Institutions across different periods, as well as comprehension and analysis of information by external users of Institutions, reaching a broad spectrum of financial statement users.

10. The PCIFB does not dispense Institutions from consulting IAS/IFRS. Whenever divergences occur between the PCIFB and IAS/IFRS, standards issued by the IASB shall prevail.

11. Finally, the BNA hopes that, with the implementation of the PCIFB, it will contribute to organizational improvement, enhance risk management, provide productivity gains in Institutions, empower banking staff in the face of continuous transformations in the international financial market, and promote international best practices in the financial system so that it becomes a reference of excellence in this matter.

• OBJECTIVE

1. The Chart of Accounts for Banking Financial Institutions (PCIFB) aims to standardize accounting records, systematize procedures and recording criteria, establish rules for information disclosure, all in consonance with principles established in International Accounting Standards/International Financial Reporting Standards (IAS/IFRS) issued by the International Accounting Standards Board (IASB), as well as rationalize and standardize account usage, enabling monitoring of the financial system, particularly regarding the analysis, performance evaluation, and control of activities carried out by Banking Financial Institutions (Institutions) under the supervision of the Bank of Angola (BNA).
2. The conceptual structure of the PCIFB aims to simplify and reduce the amount of information to be provided by Institutions in a segmented manner. The plan is flexible and allows theoretically unlimited alterations and expansions, which will facilitate the inclusion, alteration, or exclusion of any type of information.
3. The standards and procedures consolidated in this chart of accounts manual are mandatory for all Institutions under BNA supervision, in addition to those that may be defined in the future.
4. The Adjusted CONTIF does not dispense Institutions from consulting IAS/IFRS. Whenever divergences occur between the PCIFB and IAS/IFRS, standards issued by the IASB shall prevail.

• RECORDING

1. Accounting recording must be complete, maintained permanently for all administrative acts and facts capable of modifying, immediately or not, the entity's financial composition.

2. Recording must be carried out using valid vouchers that allow full understanding and validity of the administrative acts and facts practiced, noting that in the case of electronic transactions, proof must be provided through listings or magnetic files of the records.
   BASIC RULES
   CHART OF ACCOUNTS FOR BANKING FINANCIAL INSTITUTIONS - PCIFB

3. Supporting documents for operations subject to recording integrate, for all purposes, accounting movements and must be archived sequentially, or in a dedicated archive according to their nature.

4. Recording that does not comply with the standards established in this Chart of Accounts or that is maintained beyond a period of 8 (eight) days subsequent to the closing of each month, as well as the provision of inaccurate information or the lack or delay of accounting reconciliations, subject the Banking Financial Institution, its administrators, and other responsible members to the penalties provided for in current legislation.

5. A Banking Financial Institution that centralizes accounting must observe the maintenance of bookkeeping records in a single branch in the location indicated by the Banking Financial Institution.

6. A Banking Financial Institution that centralizes accounting must maintain at the origin premises copies of accounting records of respective movements, as well as financial statements and other documents provided for in this Chart of Accounts, allowing archiving in electronic or microfilm form.

7. A Banking Financial Institution that does not centralize accounting must possess for its headquarters and each branch the accounting recording books provided for in current legislation.

8. In addition to legal provisions and specific regulatory requirements for recording, the Banking Financial Institution must observe general accounting principles with particular attention to the following aspects:
   a) adopt uniform methods and criteria over time, with relevant modifications being evidenced in notes to accounts and quantifying their effects on financial statements, when applicable, considering principles established in IAS 8 – Accounting Policies, Changes in Accounting Estimates and Errors; b) record revenues and costs in the period in which they occur and not on the date of actual receipt or disbursement, in observance of