Resolution CMN No. 4516 — Establishes accounting criteria applicable to institutions in out-of-court liquidation

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 August 24, 2016, 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,

R E S O L V E S:

Art. 1 Financial institutions and other institutions authorized to operate by the Central Bank of Brazil in out-of-court liquidation must use, in their bookkeeping, the criteria established in this Resolution and its complementary regulation, and, when not conflicting with these, the general criteria provided for in the Accounting Plan of the Institutions of the National Financial System (Cosif).

Sole Paragraph. The provisions of this Resolution do not apply to consortium administrators, which must observe the regulation issued by the Central Bank of Brazil, in the exercise of its legal powers.

Art. 2 The institutions mentioned in Article 1 must prepare opening financial statements for the out-of-court liquidation regime as of the date of its decree.

Art. 3 In preparing the opening financial statements and the other statements prepared during the maintenance of the out-of-court liquidation regime, the institutions mentioned in Article 1 must observe the following accounting criteria:

I - assets must be measured at the lower of:

a) the net book value, considered as the value by which the asset is recorded, minus any provisions for losses and its respective accumulated depreciation or amortization; or

b) the estimated net realizable value, considered as the market sale value, minus the estimated value of expenses necessary for the alienation of the asset;

II - values recorded in assets related to intangible assets, prepaid expenses that are not recoverable, and assets whose economic basis depends on the existence of future positive results, must be written off immediately after the decree of the out-of-court liquidation regime, with the corresponding entry to the appropriate Equity account;

III - due liabilities must be recorded at the updated value of the obligation to be settled, pro rata temporis, up to the date of the opening financial statements, observing the respective contractual conditions;

IV - in the financial statements subsequent to the opening financial statements, due liabilities must be updated by the indices provided for in the legislation applicable to the out-of-court liquidation regime, maintaining a distinct control of the updates;

V - passive provisions, including those related to contingencies, must be constituted and updated, in order to represent the best estimate of the probable future disbursement value, considering the discontinuity situation of the institution; and

VI - in the opening financial statements, income statement accounts must be closed, with the corresponding entry to the appropriate Equity account.

§ 1 Fixed assets registered in the asset section that continue to be used by the entity during the out-of-court liquidation regime must be subjected to an impairment test starting from the social year following the decree of the regime.

§ 2 In the case of provisions associated with judicial or extrajudicial deposits, the provisioned amount must correspond, at a minimum, to the value of the respective deposits.

§ 3 The provisions of § 2 do not apply when there is a liability registered in a specific account for the full value of the deposit related to the constituted obligation.

Art. 4 In cases where the accounting of the entity in out-of-court liquidation does not offer conditions of security and reliability for the adequate verification of its patrimonial, economic, and financial situation, the liquidator must prepare the special opening financial statements of the liquidation based on a general inventory of assets, rights, and obligations.

Art. 5 The institutions mentioned in Article 1 are exempted from:

I - the preparation, submission, and disclosure of consolidated financial statements of the financial and prudential conglomerates; and

II - the publication of monthly balance sheets.

Art. 6 The Central Bank of Brazil may, without prejudice to other applicable measures, determine the new preparation and submission of the financial statements referred to in this Resolution, with the necessary corrections, for the adequate expression of the economic and financial reality of the entity.

Art. 7 The Central Bank of Brazil will regulate the complementary procedures necessary for the preparation, submission, and disclosure of the financial statements referred to in this Resolution, and may, in particular, provide for the deadline, form, and conditions.

Art. 8 The procedures established by this Resolution must be applied:

I - prospectively, from January 1, 2017, for institutions that are already in the out-of-court liquidation regime on the date of publication of this Resolution; and

II - from the date of the decree of the out-of-court liquidation regime in other situations.

Art. 9 This Resolution enters into force on the date of its publication.

Ilan Goldfajn
President of the Central Bank of Brazil