Notice No. 13/2005 of the Bank of Portugal

Notices of the Bank of Portugal Notice No. 13/2005

In Notice No. 1/2005 of the Bank of Portugal, the accounting regime for institutions not covered by Article 4 of Regulation (EC) No 1606/2005 of the European Parliament and of the Council of 19 July was established.

For situations not subject to the explicit requirement of the aforementioned regulation, it was justified to establish a transitional regime during the year 2005 for better adaptation to the new accounting framework.

Considering the need to establish a common transitional regime for the Central Credit Union of Mutual Agricultural Credit, as well as for the mutual agricultural credit unions of SICAM, adapted to their specificities.

The Bank of Portugal, using the competence conferred upon it by paragraph 1 of Article 115 of the General Regime of Credit Institutions and Financial Companies, determines the following:

1. Paragraph 1 of paragraph 5 and paragraph 6 of Notice No. 1/2005 of the Bank of Portugal, published in the Diário da República, 1st series-B, No. 41, of February 28, 2005, shall have the following wording:

"5. - 1 - Transitionally, during the financial year starting on January 1, 2005, institutions not covered by paragraph 6 may prepare their financial statements as follows: a) On an individual basis, in accordance with the standards contained in Instruction No. 4/96 [PCSB (4/96)]; b) On a consolidated basis, with the exception of situations covered by Article 4 of Regulation (EC) No 1606/2002 of the European Parliament and of the Council, in accordance with:

1. Paragraph 2 of this notice (NIC); or
2. The specific standards established, jointly, in paragraphs 2 and 3 of this notice - which shall henceforth be designated as Adjusted Accounting Standards (NCA); or
3. The standards contained in Instructions Nos. 4/96 and 71/96 [in this case, with observance of the provision in sub-paragraph a) of this same point]. ...

6. The accounting of economic savings banks, with the exception of the Montepio Geral Economic Savings Bank and the Economic Savings Bank of the Angra do Heroísmo Charity, of exchange agencies and of companies administering group purchases, continues to be governed by the standards contained in Instructions Nos. 4/96 and 71/96."

7. A paragraph 5-A is added to Notice No. 1/2005 of the Bank of Portugal, with the following wording:

"5-A - 1 - Until December 31, 2006, the Central Credit Union of Mutual Agricultural Credit as well as the mutual agricultural credit unions of SICAM may prepare their financial statements, on an individual basis, in accordance with the standards contained in Instruction No. 4/96 [PCSB (4/96)]. 2 - Until December 31, 2006, the Central Credit Union of Mutual Agricultural Credit may prepare its financial statements, on a consolidated basis, in accordance with the standards contained in Instructions Nos. 4/96 and 71/96. If it opts for this regime, the Central Credit Union of Mutual Agricultural Credit must, additionally, report to the Bank of Portugal the recalculation of its financial statements, with reference to December 31, 2005 and to the closing dates of each of the four quarters of 2006, in accordance with the NCA. 3 - Transitionally, during the financial year starting on January 1, 2007, the Central Credit Union of Mutual Agricultural Credit may choose between preparing its consolidated financial statements in accordance with paragraph 2 of this notice (NIC) or in accordance with the specific standards established, jointly, in paragraphs 2 and 3 of this notice (NCA). If it opts to prepare its consolidated financial statements in accordance with the NCA, the Central Credit Union of Mutual Agricultural Credit must, additionally, report to the Bank of Portugal the recalculation of its financial statements, with reference to December 31, 2007, in accordance with the NIC."

3. This notice enters into force on December 30, 2005.

Lisbon, December 22, 2005. - The Governor, Vítor Constâncio.