Resolution CMN No. 3823 — Procedures for Recognition, Measurement, and Disclosure of Provisions, Passive Contingencies, and Active Contingencies

RESOLUTION NO. 3823

Dispenses with procedures applicable in the recognition, measurement, and disclosure of provisions, passive contingencies, and active contingencies.

The Central Bank of Brazil, in accordance with Article 9 of Law No. 4,595, of December 31, 1964, makes public that the National Monetary Council, in a session held on December 16, 2009, based on Article 4, items VIII and XII, of the aforementioned law, and considering the provisions of Article 61 of Law No. 11,941, of May 27, 2009,

RESOLVES:

Art. 1 Financial institutions and other institutions authorized to operate by the Central Bank of Brazil must observe Technical Pronouncement CPC 25, issued by the Accounting Pronouncements Committee (CPC), in the recognition, measurement, and disclosure of provisions, passive contingencies, and active contingencies.

§ 1 The CPC pronouncements cited in the text of CPC 25, while not endorsed by a specific act of the National Monetary Council, cannot be applied.

§ 2 The provisions of this resolution do not apply to consortium administrators, which will follow the norms issued by the Central Bank of Brazil in the exercise of its legal competence.

Art. 2 The institutions referred to in Article 1 must keep at the disposal of the Central Bank of Brazil, for a period of five years, all documentation and details used in the recognition, measurement, and disclosure of provisions, passive contingencies, and active contingencies.

Art. 3 If impropriety or inconsistency is found in the processes of classification, disclosure, and accounting registration of provisions, passive contingencies, and active contingencies, the Central Bank of Brazil may determine the necessary adjustments, with the consequent accounting recognition of the effects in the financial statements.

Art. 4 This resolution enters into force on the date of its publication, producing effects from January 1, 2010.

Art. 5 Resolution No. 3,535, of January 31, 2008, is revoked, effective from January 1, 2010.

Brasília, December 16, 2009.

Henrique de Campos Meirelles
President